Property Taxes Falling in Los Angeles County; Tax Revenues Will Plunge

The Los Angeles Daily News reports Property taxes in county falling.

Some 405,000 Los Angeles County homeowners will have up to 1,800 reasons to smile this year following the latest reassessment of property values.

The average annual tax bill for affected homeowners will fall between $1,500 and $1,800, LA County Assessor Robert Quon said Wednesday after reviewing 405,000 homes.

Similar reviews done last year and in 2008 resulted in lower property taxes for more than 330,000 homeowners.

For single-family homes, the average value reduction was $162,000, amounting to an average property tax savings of $1,800, Quon said. For condos, the average reduction was $133,000, or an average savings of $1,500. The lower assessed values will be reflected on the property tax bills sent out in October.

The assessed value of properties in the county is expected to drop 2.3 percent this year - compared to just a .05 percent dip last year, Quon said. The drop, the largest in recent history, will further reduce the county's property tax revenues, which have already fallen by $132 million in the last two years.

The decline in property tax revenues comes as the number of people seeking $221 a month in checks from General Relief, the county's welfare program, has increased more than 60 percent from 58,000 in 2007 to nearly 94,000 today, Assistant Chief Executive Officer Ryan Alsop said.

Tax Revenues Will Plunge by $600-$729 Million

This story comes to me from reader Gregory Levine who writes ...

Hello Mish

According to the Daily News, property taxes in Los Angeles county are falling: "The average annual tax bill for affected homeowners will fall between $1,500 and $1,800.

Some quick back-of-the-napkin math tells me that LA county revenues will drop by
$600-700 million. Notwithstanding the obvious boost to consumer spending (for those who have jobs), I am wondering how the county survives a tax hit like this.

The revenue isn't coming back for years (if ever) and, of course, the money's long spent or promised on pensions. Moreover, the number of people applying for welfare has increased by 60%.

Thank God sitting in the sun is cheap!

Cheers,

Greg

By the way, a quick check of LA County Facts from the census department shows that as of 2008, there are 3,385,944 housing units of which 42% were multi-family. The latter number is as of 2000.

How many more houses will be revised lower? Eventually almost all of them will be, assuming and honest evaluation of course.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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