Property Tax Reform Issues: What's The Debate About?

The issue of property tax reform is one that varies from state to state. Property taxes, which are also referred to as ad valorem taxes, are levied by local communities such as municipalities, counties and other local taxing authorities. States and the federal government levy taxes on income and do not charge property taxes.

Property Taxes Disproportionate to Values

In many communities, some resident feel that the property tax rate is disproportionate to the value of one’s property. Property tax assessments are used to pay for local improvements, pay down outstanding debt and fund schools. During the run up in the real estate and housing market, property tax rates grew very high. When the housing market burst and values came down, there was not a corresponding drop in a property owner’s tax rate.

The Push for Property Tax Reform

The push reform focuses on creating a process to fairly assess the value of personal property. This is difficult since the financial rating of a city or county is based on their tax collections and property taxes represent a significant part of their revenue. Any reform that takes place may impact a community’s ability to provide services such as schools and libraries and force some communities into bankruptcy or financial distress.

 

blog comments powered by Disqus