Property Taxes Questioned As Prices Zoom By ROBERT TANNER, AP National Writer
1 minute ago
Soaring property taxes are a top worry in state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding change in the system so schools are more equitably funded.
Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to substantially change the tax system and find another way to help pay for schools that closes the quality gap between wealthy and poor communities.
"People are facing being taxed out of their homes," said Ted Harris, a 69-year-old retiree living on the Nevada side of Lake Tahoe, whose taxes climbed from $2,200 in 1990 to $12,000 last year. "Government simply swallows the money and finds lots of reasons to spend that money."
From Texas to Illinois to Pennsylvania, lawmakers are weighing property tax caps, limits, exemptions and other ways to ease the burdens for homeowners — whose tax bills are the down slide of home values increasing. Proposals to change the system have become part of the gubernatorial campaigns in New Jersey and Virginia, the only states with governor's races this year.
In most states, cities, counties and municipalities rely upon property taxes to pay for much of local government and schools.
Nationally, K-12 education covers 42.8 percent of its spending with local funds, with most of the rest coming from the state and less than 10 percent, on average, from the federal government, according to 2002 federal statistics. Part of the property tax pressure stems from a trend in recent years for cash-strapped state governments to limit their help to local governments.
"Property tax relief is the mantra of the day," said Bert Waisanen, an analyst at the National Conference of State Legislatures who tracks tax policy. "States are acting to provide as much additional relief as they can afford to."
In response to widespread complaints, Nevada — the fastest growing state in the country — signed into law last month a cap on property taxes, limiting growth to 3 percent a year on all single-family, owner-occupied primary residences, with a higher cap of 8 percent for commercial property and second homes.
That didn't satisfy everyone. State Assemblywoman Sharron Angle, with supporters like Harris, want a constitutional amendment similar to California's Proposition 13, the 1978 initiative that limited property tax growth to 2 percent a year.
Legislatures are debating bills in many states, but so far:
_ Texas legislators agreed to lower property taxes for schools, with the state picking up a bigger share of the education load. The House and the Senate are trying to settle on the size of the tax cut and how the state will raise the money to cover the cut, but time is running out.
_ New Jersey legislators are moving forward with plans to ask voters to approve a constitutional convention that would take on changes in the property tax system, heeding arguments that taxes have gotten out of control.
_ Illinois lawmakers are debating a plan to swap higher income taxes for lower property taxes, a response to years of demands that the state change the way it pays for education.
_ Pennsylvania last year legalized slot-machine gambling with some of the money to cut local school property taxes, but many cities and towns are still considering whether to sign on.
"People are saying 'Wait a minute, we need a rest,'" said Pete Sepp with the National Taxpayers Union, an Alexandria, Va.-based group that seeks limited government and low taxes.
Just from 2002 to 2004, the nation's median average price of a single-family, metropolitan home rose from $158,100 to $184,100, according to the National Association of Realtors. That's a 10 percent increase. Some areas — such as Las Vegas, Ft. Lauderdale, Fla., and Riverside, Calif. — saw 30 percent increases.
That also means higher taxes, which homeowners don't like.
Meanwhile, lawsuits and court decisions around the country are forcing leaders to try to improve education in poorer school districts. The role of property taxes is a top issue.
"People hate property taxes," said John Augenblick, an education expert who works with states on funding issues. "What you're fighting is the majority who don't have kids in the school, who want to lower taxes because they don't have children in school."
Augenblick said the pressure from taxpayers and the courts is combining to put more and more responsibility on states, not local communities, to pay for education. But the resources aren't necessarily available at the state level, either.
"The question," he said, "is what gets shut down?" |
