Saturday, January 24, 2009

Trade off time for property taxes

Here's a choice, one of many, that this economic environment gives us. Residential property taxes in many areas are not even close to keeping up with falling property values. The taxes are flat or rising on residences that have lost 25% or more in value in many areas. In areas that are adjusting assessment values downward, many are simply raising the rate of tax on the lowered assessment, especially for school taxes.

What should local voters do, given that they can't possibly be pleased with this situation. Should they petition their local officials, vote down school district budgets, and do everything possible to force greater efficiency and lower taxes. That may seem like the only logical and fair approach BUT --- with their home values already declining, will they reinforce that decline by having their school systems cut back innovative programs, eliminate sports teams, and raise class sizes --- will basic services such as trash collection and road maintenance be forced to retrench. There is often room to cut back bureaucracy and patronage in local governments but when do you get through the fat and start hitting the muscle and bone that made their communities attractive places to buy a house and raise a family.

That's the tough trade-off. Does seeking what can certainly be called fair tax relief have the effect of reducing the value of homes further, not to mention lowering the quality of life. Is the amount saved in taxes more or less than the potential further fall in the value of a house?

1 Comments:

Anonymous kf said...

This in some way could be an analogy for the whole shebang. Do we let the infrastructure of this country continue to slide and think cutting taxes is the solution to our economic mess or do we use the mess to get something useful done that will build value over the long haul.

3:37 PM  

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