Property Tax Dilemma
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Kevin Depew in Tuesday's Five Things wrote about the Property Tax Dilemma.
The Florida legislature plans to convene a special session in mid-June that could result in more than $30 billion in property-tax relief over the next five years, the Wall Street Journal reported.That post got me to thinking about dilemmas in general.
- Thanks to the housing boom, the average annual property-tax bill in the U.S. was $1,132 per person in 2005, up 13% from 2000 in inflation-adjusted terms, according to data from the Commerce Department.
- The boom was so strong that in many areas housing prices rose too fast for local tax assessors to keep up, the WSJ said.
- Now, tax assessments are catching up just as market prices are declining, a double whammy for homeowners facing increasing mortgage payments due to resets, or homeowners now trapped in residents with property tax bills edging them out of their comfort zone.
- But that's the homeowners problem.
- Here is the dilemma for states: Reducing property-tax revenues threatens budgets of cities and counties. However, a property-tax cut could stimulate the economy by leaving homeowners with a bit more money in their pockets.
- Florida doesn't have a personal income tax, and its cities and counties depend heavily on property taxes to pay for services such as police and firefighters, the Journal noted.
So Let's Recap General Dilemmas ....
- So property taxes are up even as home prices are sinking.
- So gasoline prices are up because of demand from China.
- So food prices are up because of bad policies on ethanol.
- So health care prices are up because of bad policies everywhere.
- So wages are not keeping up with inflation.
- So insurance cost are rising dramatically especially in the hurricane zones.
- So foreclosures and bankruptcies are rising dramatically.
- So the economy is slowing.
- So the little guy is being squeezed.
- So property tax relief is on the way.
- So states are facing declining revenue.
Do you see any dilemmas here?
The stock market sure doesn't.
For now anyway.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
