From Madison, Wis., to Bucks County, Pa., the local tax assessor is dipping deeper into homeowners' pockets as real estate prices rise and states share less of their tax revenue with local governments. With people starting to receive their 2005 tax bills, the levies are squeezing the middle class and senior citizens - leaving them less to spend on everything from restaurants to roof repair. There is also concern the taxes could particularly hurt the home-buying chances of the young or civil servants such as firefighters. States such as New Jersey now have grass-roots efforts - verging on revolts - for reform.
Part of the problem lies in demographics and the rapid growth of exurban communities. Young couples who can't afford suburban homes have moved to "edge" communities further from the cities. Those are filled with children, and to educate them the communities have to jack up property taxes to build new schools and hire teachers.
The changing demographics have combined with an unusual economic phenomenon: home prices climbing at double-digit rates in some areas. This would make homeowners happy, except that an increasing number of communities are now assessing property values every year.
Factor in changes in state budgets where many governors are still grappling with ways to close budget gaps. One way for them to cut expenses: Reduce funding to local governments.
This is happening once more, so even though in some areas they are actually reducing the mill rate (the multiple of property value used to determine residential taxes) property taxes are going up!
In many states, the tax bite is finally causing taxpayers to bite back. For example, in New Jersey, a grass-roots group, Citizens for Property Tax Reform, says it has 500,000 participants after 15 months of existence. The group's mission is to force a property tax reform "convention."
New Jerseyites are far from alone in their frustration. Other states struggling with the issue include Iowa, Indiana, Pennsylvania, South Carolina, Maine, and Vermont, and Wisconsin.
Some states are looking at the California model of capping property taxes so they rise only 2 percent a year. Others, such as Pennsylvania, are hoping to substitute the revenue from slot machines to hold down property taxes. Some are looking at the Michigan model: It sends all property taxes to the state, which redistributes money from rich communities to needy ones.
Many citizens, especially those on a modest fixed income, clamor for relief. In Schwenksville, Pa., retiree Arthur Fairclough watched his property taxes rise 9.8 percent last year. "It will eventually eat up my total Social Security. We have enough income to cover it now but I'm worried about the future."
Editors Note: Here's a thought "Stop spending more then you have and stop asking for more!"
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