MSNBC, Elkhart Project----
After a long winter, this is high season for road repair, and the Elkhart County Highway Department has a busy schedule. But deep budget cuts have forced changes in that schedule to try to get the same work done with less money.
Instead of working a traditional workweek of five, eight-hour days, road crews now work four, 10-hour days. The hope is that those longer days will reduce the downtime that comes at the end of each day’s shift.
“You’ve got to secure the site — there's an hour. You’ve got to clean up — there’s an hour. And then you have to go back to the shop — there’s a half-hour,” said Rick Easton, one of the crew recently installing a new drain pipe on a county road. “So I’ve lost two and a half hours.”
It’s just one of the ways local governments across the country are coping with one of the steepest drops in tax revenues in decades, forcing them to try to maintain the same level of local services with a lot less money.
“We’re trying it this summer because we have to do something,” said Jeff Taylor, manager of the Highway Department. “There is no more money.”
It’s been almost two decades since the last time a weak housing market cut so deeply into property tax revenues, the main source of funding for many cities, towns and counties across the country. While most local finance and budget officials keep a close eye on economic forecasts, the scope and speed of the current housing collapse caught many by surprise, according to Christopher Hoene, research director at the National League of Cities.
To make matters worse, the process of updating tax assessments can take years. That means that local governments now in the throes of budget cuts can expect further cuts in coming years.
“The reality for local government is they’re probably in (fiscal year) '09 seeing the decline in property taxes in concerted fashion for the first time,” said Hoene. “That means 2010 and 2011 are likely going to be more of the same. Even if a recovery in the housing market begins right now, they’re still a couple of years away from seeing any rebound in those revenues. We’re just entering the woods.”
The problem is not limited to residential properties. A decline in commercial real estate values is also cutting into local tax bases.
“We’ve got a ton of businesses that have gone out of business and we’ve got empty buildings here that people have picked up and left or filed bankruptcy,” said Elkhart Fire Chief Mike Compton.
Other sources of revenues are also down. Local governments that rely on sales taxes have been hit by the drop in retail spending. And state governments have cut back on revenue they pass through to municipalities.
In Elkhart County, the bulk of the Highway Department's funding comes from state gasoline taxes, which have fallen as people drive less due to the recession. At the same time, the housing boom created subdivisions in unincorporated areas outside the reach of city and town governments. That’s created many more miles of new county roads to maintain.
“That new house does nothing for us in terms of new income,” said Taylor. “What it does is causes us to bring resources from somewhere else and place them in that subdivision. And now our level of services begins to drop."
So Government Leaders are trying to squeeze every dollar. Taylor says the shift to a four-day workweek was imposed partly to make up for several unfilled positions. But the experiment has created unexpected results. With more equipment idle on Fridays, shop mechanics — who still work five-day weeks — can get more done. But there's a downside, too.
"When we go to four, 10-hour days and I lose a day to rain, I’ve lost 25 percent of my workweek," said Taylor.
A Flood of Property Tax Appeals...Is Charlotte, NC Listening?
I found this recent article (below) on Property Tax Appeals to be extremely interesting as it hits close to home for my community.
In Charlotte, NC (my region) where the City & County Officials haven't allowed a Tax Assessment to take place since 2003, they've once again refused to re-evaluate Property values.
This time "the powers that be" cited the Recession as an excuse for not doing so.
However for most Middle Income to Lower Income Homeowners of African-American or Hispanic origin living in Charlotte-Mecklenburg, both our Property Taxes and our Storm Water Rates have continued to increase almost annually.
I have talked to many Minority Homeowners living in Charlotte-Meck. County who've done nothing more to improve the value of their property, other than keeping their grass cut and keeping the exterior of their homes clean and neat.
Yet...their property taxes have increased by $500. to $1,500.00 dollars!
In many instances this Unfair Taxation practice occurs soon after closing on the property.
How can this be when Wealthy and Middle Income Caucasian Homeowners many who dwell in homes valued from $300,000. to $1 Million Dollars, have NOT experienced a Property Tax or Water/ Storm Water Rate Increase in years??
Middle to Lower Income Minority Homeowners residing in Charlotte-Mecklenburg are NOT receiving better services from the City or the County (Public Safety, Education, Jobs, Well-Managed Homeowner Associations, Water/ Storm Water, Trash, Economic Development, Neighborhood Stabilization, Mass Transportation i.e. Clean, Properly Functioning City Buses which run on schedule, etc) but for some reason their Property Taxes and Storm Water Rates keep rising.
When approached or questioned Charlotte-Mecklenburg City/ County Officials consider this to be a moot issue.
Either they just don't want to discuss it or they can't give a logical reason for refusing to re-assess the Property Values of Wealthy and Middle Class Caucasian citizens, while consistently raising everyone else's Property Taxes and Water/ Storm Water rates.
Inquiring minds would like to know why?
Since they've ignored the concerns of their constituents on this subject, perhaps the U.S. Dept of Dept of Justice and the IRS needs to investigate or conduct an audit on both City and County Tax Assessment records.
Maye then Char-Meck Officials will be able to conjure up some type of formula or equation for having allowed such Financial Injustice to be placed on the backs of Minority Middle Class and Lower Income citizens for decades.
Or...after reading the article below published by both the NY Times and MSNBC, Charlotte-Meck Officials will be compelled to fix this mess without Federal Government interference.
I have a simple solution to what ails most of Charlotte-Mecklenburg including this Unequal Property Tax problem: Politically Balanced, Bi-Partisan NEW Leadership!
I'm going to miss outgoing Mayor Pat McCrory (Rep.) because I think he's done a pretty good job at putting Charlotte on the national map.
However with a Politically Balanced, Bi-Partisan NEW City Council and Board of County Commissioners in place (A More Accountable Checks & Balance System), its less likely this type of Corruption will continue to plague one of the fastest growing regions in the Southeast.
President Barack Obama has set the standard for including both key Political Parties to help establish Fair Policies and Regulations. (Housing, Jobs, Hate Crimes, Health Care Reform, Credit Card Regulation, Education, etc.,)
No doubt Charlotte-Mecklenburg should follow suit.
MSNBC, NY Times---- (The Related Article)
Homeowners across the country are challenging their property tax bills in droves as the values of their homes drop, threatening local governments with another big drain on their budgets.
The requests are coming in record numbers, from owners of $10 million estates and one-bedroom bungalows, from residents of the high-tax enclaves surrounding New York City, and from taxpayers in the Rust Belt and states like Arizona, Florida and California, where whole towns have been devastated by the housing bust.
“It’s worthy of a Dickens story,” said Gus Kramer, the assessor in Contra Costa County, Calif., outside San Francisco. “These people are desperate. They know their home’s gone down in value. They’ve watched their neighborhoods being boarded up. They literally stand in there and say: ‘When can I have my refund check? I need to feed my family. I need to pay my electric bill.’ ”
The tax appeals and reassessments present a new budget nightmare for governments. In a survey conducted by the National Association of Counties, 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets, said Jacqueline Byers, the association’s research director.
Officials in some states say their property tax revenue is falling for the first time since World War II.
Some tax rates rising:
The recession has already taken a significant toll on states’ budgets, as rising joblessness, a weak business climate and a drop in consumer demand have cut sharply into receipts from taxes on sales, personal income and business earnings.
The pain at the state level is trickling down to county and local governments. To compensate, about 10 percent of large counties are raising the tax rates associated with home values to minimize the revenue loss, the county association said.
Even so, most counties simply have to absorb the lost revenue. Municipalities are laying off workers, renegotiating labor contracts, freezing salaries and cutting services.
The revenue losses are coming as homeowners prod towns for new assessments, and as municipalities conduct regular revaluations of their real estate. While declining residential values weigh heaviest on many governments, the value of commercial real estate is also sliding as businesses shut down and move out of storefronts or shopping malls.
Property taxes are meted out by a disparate patchwork of cities, towns, counties, and school and fire districts, all with their own rules. Because tax formulas vary widely county to county, not every decrease in assessed values automatically lowers a household’s property taxes.
From a trickle to a flood:
But officials across the country say there is no question that the number of appeals has risen from the usual trickle to a flood.
In suburban Atlanta, thousands of people lined up at government offices to file their requests for reassessments before a March 31 deadline. In parts of Ohio, appeals have multiplied fivefold. Tax lawyers in the northern suburbs of New York say they have never been so busy, and some towns have hired extra employees to sift through the paperwork and are spending hundreds of thousands of dollars on legal fees to deal with the cases in tax courts.
The call for counties to acknowledge the falling price of homes is loudest in states where taxes are highest, or the housing crisis has hit the hardest.
“We’ve been absolutely getting killed,” said Robert W. Singer, the mayor of Lakewood Township, N.J., and a state senator, whose town is setting aside $2 million to pay tax refunds to homeowners. “We’ve never had this before. Usually they’re undervalued. Now, everyone’s overvalued.”
The appeals are not just coming from individual homeowners.
Condominium associations and entire subdivisions are pushing for new tax assessments, as are companies that own office towers, industrial parks and shopping malls.
New Jersey, which has the nation’s highest property taxes, has been besieged by tax appeals from homeowners like Peggy Tombro, whose rambling home in Bound Brook is assessed at a value of $1.8 million but is languishing on the market with an asking price of $1.3 million. Her taxes are increasing to $53,000 a year.
“I don’t know what else to do,” said Ms. Tombro, 63, who has gone back to work selling antiques to pay her tax bill.
In the Inland Empire of California, near Los Angeles, Joylette Lynch, 70, is challenging the assessed value of her home as she tries to scrape together $1,158 a month to pay her mortgage, taxes and other bills. Her two-bedroom house in a community for older residents was worth as much as $280,000 three years ago, but houses on her block are now selling for less than $100,000.
“If the house is not worth what I bought it for, why am I paying the same amount in taxes?” she asked.
Ms. Lynch, meanwhile, lost her job at a Bed, Bath & Beyond this year, and is behind on her mortgage payments. Shaving a few hundred dollars off her annual tax bill of $4,300 might not keep her out of foreclosure, but it would help, she said.
“Everything’s in God’s hands now,” she said.
Looking for relief:
Officials say stories like these are common as unemployment hits 9.5 percent and people seek to trim their budgets. Appraisers and assessors, normally concerned with land values and comparable sales, are becoming ersatz crisis counselors.
Jeff Furst, the appraiser in St. Lucie County, Fla., said a 62-year-old man recently walked into his office and described how his wife had been laid off and his salary had been cut in half. He was struggling to pay his taxes and looking for relief, Mr. Furst said.
“We’re hearing from people like this every day,” Mr. Furst said. In St. Lucie, which sits along the Atlantic, property tax revenue is expected to fall 20 percent, and tax appeals are 10 times as high as they are normally. “Most people are going to see a significant decline in their tax bill.”
Mr. Kramer, the assessor in Contra Costa County, said homeowners started swamping his office with requests for new assessments in December. As many as 500 people would call in one day. His voice mail message now begins: “If you’re calling to request an informal review of your property value due to the declining real estate market.”
Contra Costa has now reduced the recorded value of more than a third of the 350,000 privately owned properties in the county.
Lisa Driscoll, the county’s budget director, said property tax revenue had been growing about 8 to 9 percent a year but was now projected to decline 5 percent next year. The county has cut $50 million from its budget to offset the decline in real estate and other taxes.
Come hell or high water:
Bonnie Grassley’s house in Fort Pierce, Fla., reflects the rise and fall of the broader economy. Its assessed value topped $153,000 in 2006, as Florida’s housing market caught fire. Now, it is worth $77,500.
Though her tax bill is only $150 a month, Ms. Grassley is out of work, spending her savings, and says she hopes a reassessment will save a couple hundred dollars a year.
“My home means everything to me, and it’s all I really have,” Ms. Grassley said. “I’m determined to keep it, come hell or high water. It’s a terrible way to lose your home, just over taxes.”
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Sources: MSNBC, Elkhart Project, NY Times, Charmeck.org, Flickr, Google Maps
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