Declining House Values Spark The Next Taxpayer Rebellion?


You might think property taxes have declined 30%, paralleling declines in housing values. But nope–property tax revenues have shot up 27% just since 2006.

Something remarkable happened to property taxes in the U.S. while housing lost 31% of its value from 2006 to 2009: they went up by $100 billion (27%). Equally remarkably, as we can see from this U.S. Census Bureau data on state and local tax revenues, property taxes went up even when housing slumped in the early 1990s.

So though U.S. housing continues losing value–U.S. home prices declined in January, continuing a downward trend that began in August, with average U.S. home prices retreating to summer 2003 levels, according to the S&P Case-Shiller home-price indexes–property tax revenues continue their inexorable rise.

Add all this up and we can see that local governments have become far more dependent on property tax revenues than they were in 2000. Thanks to stiff increases in junk fees and taxes of all kinds, state and local government revenue has climbed back to its pre-recession height of $1.29 trillion, roughly equal to the $1.32 trillion collected in 2008. In terms of total tax revenue, the recession is over–yet the gap between expenditures and revenues continues to widen in most states and local governments.

As their properties continue sliding in value, devastating their net worth, do you reckon the average homeowner might start resenting the rapid rise of the taxes they pay for the privilege of owning real estate?

Imagine if your income taxes rose by 27% even as your income declined by 30%.

The ultimate tax hostage is the property owner. The business owner can pull up stakes and leave, the wage earner can transfer or get another job elsewhere, and the consumer can restrict his/her consumption to lower the burden of sales taxes, but the property owner is the perfect tax donkey because the transaction costs of selling are so prohibitive.

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In Wisconsin it is how towns, cities, and townships make up any budget shortfall. They do not take into account declining home values they just change the mill rate. This year I paid 10 percent more in property taxes than I did the year before. Two or three years ago my home was re-assessed in which the value of my land and property was bumped up by about 30 percent.
I challenged that ssessment, had the numbers for Dane county showing the decrease in home values, and essentially the assesor said it didn’t matter and wanted to know, and I quote, “What was I concerned about, that my property taxes were going to go up?”
I found the question stupid, irritatring, and condescending.
Bottom line, in Wisconsin you’re screwed on property taxes regardless of whether your home/property value is decreasing or not.

wisconsin, what a state! high taxes, bullied by unions, companies being bullied by unions, corrupt judges, corrupt democratic party.

the whole state is a waste. if i were gov walker and the republican legislature, i would simply pack up and move from that GOD awful place.

the state is a waste. boycott their products, oh wait, the union is their product, sucking the people dry of their money.

I have a friend in New York State..value of the property three years ago was $40, it is $375,000.00. He can not afford the payments less the taxes..had to foreclose.. Most cities and states are wasting money. Columbus, ’10 did a little tax increase of 0.025% , for fire and police. Than the city restructued the city’s police patrols.. Now 1 patrol car in district during the daytime and 1 car shared by two other districts in the evening..Oh! For three months after the tax increae 0(zero ) police cars seen. Gets better! The neighboring small towns and suburbs than audited taxpayer fot en equilivent amount in taxes. Oh! Sentate Bill 5 in Ohio on union bargining..well unions never mentions the increase in pay for police of fire..No wonder ohio is one of the worst states in this County to live..The “Gov” lavished his personal home and does not live in the “Gov’s House”. Maybe they should turn the guvoner”s house into a “bed and breakfact” least make some money off of it…What does one expect from zero leadership..”The Decline and Fall of the Roman Empire”..great book..the prefaces of the decline potraits this county in a wonderous manner..Plato’s “The Republic”. great book, better in the original Greek..Latin is does have to learn more than one languge…