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The assessed value of homes all over America have dropped like crazy. In 2009, local governments are going to be in terrible financial shape unless there is a political will to raise taxes. In some communities, they are talking about cutting the budget for schools, parks, police, fire, roads, etc, as much as 20%.
Because the assessed valuation of the homes has gone down so fast, would you agree to a large tax rate increase to keep city or county services up to 2008 levels?
Last edited by Oregon Transplant; 08-21-2008 at 05:47 AM..
This is the second shoe to drop. In California during the late 90's at the height of the dotcom boom, Grey Davis "negotiated" contracts with the Gov employees giving them generous pay and benefits as far as the eye could see. Then the bubble burst.
The Gov employees keep their stuff at the expense of California, the Grey Davis is out and replaced by Arnold.
Now it has happened again. Call it what you want, but the USA has created a class of people (Gov employees) who have enslaved all others (non Gov employees).
Funny note. I brought this up a few months back and I got flamed by this poster who was 1) a Gov employee who 2) knew other Gov employees and 3) said that they were the hardest working.... and 4) that she would like to see the "data" to back up what I am saying.
There's a fundamental misunderstanding of how the property tax works. Unlike the income tax, Property taxes don't go up or down with the rise or fall of the economy. The tax levy is the total amount raised by a property tax. This amount is determined up front. Assessed values simply are a method to figure out the relative portion of the total levy that each property must pay.
There's a fundamental misunderstanding of how the property tax works. Unlike the income tax, Property taxes don't go up or down with the rise or fall of the economy. The tax levy is the total amount raised by a property tax. This amount is determined up front. Assessed values simply are a method to figure out the relative portion of the total levy that each property must pay.
sukwoo
Where is the misunderstanding?
If the local police, fire dept and schools need X dollars to meet their contracts and the assessed values plummet or the houses have been abandoned so no one is there to pay at all, there will be a supplemental reassessment or a change in the mill rates to meet that obligation.
In most communities, the local government and schools went into a huge spending spree for most of the 21st Century as assessed value of homes went up. The tax rate per $1000 in assessed valuation stayed the same, so the amount each homeowner paid in property taxes, in some cases doubled since the year 2000.
Now the assessed valuation of the homes are down 40% in many communities. All kinds of new local government programs are in place due to the rapid spending increase from the boom. It is hard to stop these programs now because people are use to them. But to get the same amount of tax revenue adjusted to inflation to fund all the government programs that people have got use to, the tax rate (cost per $1000 in assessed valuation) will have to go up 40% or more. This is very hard in a recession when people's homes are dropping in value.
It is easier politically to raise property taxes in a period of rapidly rising home prices, not in today's environment of lowered expectations, high unemployment, a lower standard of living and falling home values.
If you were a city councilmen would you like the job explaining why you are raising people's taxes in a period where services are being cut. Most people would not understand!
If the local police, fire dept and schools need X dollars to meet their contracts and the assessed values plummet or the houses have been abandoned so no one is there to pay at all, there will be a supplemental reassessment or a change in the mill rates to meet that obligation.
It happens all the time.
It does happen all the time. The original post seemed to indicate that its a big deal to change the mill rate on account of change in total assessed valuations. Its not a big deal. When properties were going up 30 and 40%, did the total tax levy go up 30-40%? No. The mill rate decreased. Now assessments are falling and the rate will go up. Most tax bills won't change significantly (aside from the general increase in taxes, as noted previously.)
This is a slow motion train wreck we are seeing. I read a story two weeks ago in USA today about Gov employees double dipping and in some cases triple dipping. They work, get a pension. Keep working the same job. Take a double pension and then get a consulting job doing the same work. One woman was the director of water something in San Jose. CA. She defended saying that the public gets all the benefit of her experience and was collecting nearly half a million in benefits from CA. I say, shouldn't her job description have included preparing a successor? In a private company, that would certainly be the case.
It does happen all the time. The original post seemed to indicate that its a big deal to change the mill rate on account of change in total assessed valuations. Its not a big deal. When properties were going up 30 and 40%, did the total tax levy go up 30-40%? No. The mill rate decreased. Now assessments are falling and the rate will go up. Most tax bills won't change significantly (aside from the general increase in taxes, as noted previously.)
I cannot verify this as true. Perhaps it did in you state or locality, but I don't think that happened anywhere in California. In California, the increase in revenue just meant another reason to increase the budget. Perhaps you live in a more sensible place.
Humm Illinois? Perhaps, if true, this is a selling point for Obama. What was his stand on this?
They, nor that taxpayer, can sustain budget and tax increases year after year.
The gov't isn't any different than the average American, and it's pretty scary. They spend more than they make, and have no savings, and I see the mentality a lot around here.
Frightening.
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The property tax rate is the key
