The basic problem with state taxes is the irresponsible spending of the municipalities. That includes the counties, the cities and the (taxing) agencies far and wide. Most politicians gain office and hijack the existing spending train without ever addressing the excesses of the previous administration.
There is a need to put caps on (spending) that are controlled by referendum of the people, not by the folks who are spending the money. There is a need for "Pay-Go" (shorthand for pay-as-you-go) which requires every legislative body to offset every increase in a spending or entitlement program or new tax cut with an equivalent saving somewhere else in the budget. These measures are desperately needed my most communities in order to prevent any further additions to the budget or the incursion of budget deficits to finance an issue.
In a school classroom, a 1:20 student teacher and teacher support ratio is more than enough to control the classroom. Government jobs are 1:5 in most states. Government jobs should mimic the classroom example. There is no reason why every municipality couldn’t see a 50% tax cut
"Real estate prices nationwide could fall by as much as 40% in real dollars in the next few years." - Dr. Robert Shiller, Yale University
Lower property taxes may be yours by way of a property tax appeal. Judging from housing trends, you should easily find comparable properties that are lower than the values the property assessor valued you for last year. It’s a slam dunk.
The new-home supply hits a 1-year peak and housing sales are falling. Now the crash has begun with implications for the entire country and the question is no longer "Will real estate fall?" but "How bad will it get?"
Prices of single-family homes across the nation depreciated in January compared to a year ago, the worst results in more than 13 years, the S&P/Case-Shiller housing index revealed.
It was the first time in at least six years that housing prices fell as housing demand keeps falling. Foreclosures are near highs and it could get worst. They are not just rising in the boom states of California and Florida but also weaker growth and high unemployment states like Michigan.
With property market values decreasing, the current real estate mortgage crisis, the 7-month backlog in real estate inventory, foreclosures going through the roof you’d think residential property taxes would go down. Think again. Some voices taut a 20-40% decrease in overall real estate market values by the end of 2008. Hopefully that will not happen, but if it did what would happen to residential property taxes?
Just because the housing market is down doesn't mean the government needs less money to do what they do. They are a monopoly and have you at the end of a gun barrel. If Ford or General Motors doesn’t sell enough cars they have the get rid of workers, close plants. Not the government. They have no competition and very few towns have placed residential tax restraints on their towns.
To lower property taxes they could reduce the number of dedicated building or full-time staff and contract with the county, neighboring cities and private firms for essential municipal services, such as plowing and fire coverage … etc
Will it happen by itself? No. The busy body bureaucracy will not voluntarily give up jobs or anything unless tied to a concrete budget anchor that allocates the running of the government to fixed percentage amount. Many lean and trim towns are able to function well on .50 per $1,000 property taxes.
It’s up to the voters to maneuver their way into government by placing, by way of ballot or legislation, spending limits. Iron-barred gates on government spending need to be installed. Hard fiscal parameters that a lean taxpayer effective government will work under need to be in place. Most municipalities in my state are obese; they have no desire to diet, no limits on spending, high voter apathy with foxes embedded in the hen house.
With the current downward market pressures and future estimates of 20 – 40% decline in real estate prices, the opportunity to appeal you property taxes based on market value seems most prudent. What the assessor says your house is worth and what the actual market value is has a greater chance of being miles apart.
Assessed value is not the current market value. What you have to do is crunch the numbers to see how the municipal appraisers "assessment" stacks up against the actual market value.
Ask for the current assessed valuation for your land as well as the amount of assessment for improvements (your house) and the total value for both. Obtain the legal description of your land known as the lot and block number or parcel identification number (PIN number).
This information should also be on your tax bill. Calculate the total assessed value of your house and property (add them) and divide the total assessed value of your residence by the sales ratio to determine what your tax appraiser thinks your house and property are worth.
For example:
$25,000 land
+ $193,000 improvements (residence)
$218,000 total assessed valuation
Total Assessed Valuation divided by sales ratio = what they think your land and dwelling(s) are worth but not always what it will sell for in the marketplace.
If the sales ratio for the year was 71.7%
$218,000 = $304,044.63
.717
$304,044.63 = what the taxing authority thinks your property and residence are worth but not necessarily what it will sell for in the open residential housing market.
(mathematical note: remember that when using your sales ratio percentage figure as a divisor, move the decimal point 2 spaces to the left.)
Now you are armed with what the taxing authority thinks your residence is worth. You can now compare this figure to the actual amount your property and house would get in the open marketplace. If this figure is more than the fair open market value for your house, you are over assessed and chances are favorable that you have a case.
At this juncture you may have only a ball park notion of what your house is worth. If that figure is out of line with the assessor's figure, you should proceed with a residential market analysis of your property's actual worth.
Discover how to use the right numbers to make your figures hold up in our How To Prepare a Winning Property Tax Appeal
You need to find comparables. You must drive by the comparable and note how your home compares to it. Then you need to make plus or minus adjustments. We show you what percentages to use, what to look for and how to do it right at Property-Taxes.us
If homeowners do not think they can sell their homes for the "full cash value" listed on their property tax assessment valuation, you have a right to appeal.
Homeowners should also look at comparables in their neighborhood to see if they line up with the property tax assessor's valuation. Find out what similar homes are selling for nearby. Learn more at Property Taxes
Lately taxes caught up to the trending higher prices for homes. The trickle down issue of increased tax valuations has caught up to those who were over extended due to the price of the home they purchased. Police and fire protection, and additional county, city and state services have mushroomed their budgets riding the back of increased property valuations.
What’s gonna happen if a severe recession takes place and that 600 thousand house is suddenly worth only 300 thousand? Using simple math, your property taxes will double …or do you really think local municipal government will cut back?
