Although the recession is officially over, the result of it is still at its core. Many homeowners are finding it very difficult to manage because of multiple economic reasons, including increasing property taxes.
Governments struggling over tax revenue declines
Homeowners looking for cash now are having a difficult time due to their tax bills. Across the country, owners are challenging their tax amounts due to the value of their properties declining. The overall result is that local governments are in danger of losing yet another revenue in the already struggling state coffer. It seems that homeowners from New York to Arizona are arguing about their tax bills, and socioeconomics is not a contributor. Homeowners of $10 million-estates to one-bedroom bungalows are taking up arms against the tax bill.
A nationwide crisis
Gus Kramer, assessor in Contra Costa County, California, (see http://www.cnbc.com/id/31747498) said, “It is worthy of a Dickens story. These people are desperate. They know their home’s gone down in value. They have 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.’”
Governments are having a difficult time with the issue. According to a survey done by the National Association of Counties, 76% said that falling property tax revenue was significantly eating away at their budgets. Jacqueline Byers, research director for the firm, said, “In the recession today it’s difficult for any government to give up any revenue. The tax revenue being hit hard couldn’t have come at a worse time.”
The recession and the state budget
The recession was difficult on every local government. The staggering growth in unemployment, lack of spending and a drop in revenues for every business have combined to make it difficult on the states. Although many experts are citing the recession as being officially over, there is still a time to regroup and resettle. Byers added, “Though the recession is behind us, its wake isn’t. We still have to wait and see what needs to be cleared up before the market returns to normal.”
Some counties are trying to make ends meet by raising the tax rates associated with home values. The plan is a sketchy one because homeowners looking for cash now don’t have extra funds to put into their homes. Add to the problem the loss of equity in their properties and it’s a difficult thing to ask for more money. Byers said, “Raising tax rates is like squeezing homeowners for something they just don’t have right now.”
Homeowners are asking for reassessments
Many homeowners are requesting reassessments. For example, in Atlanta, Georgia, thousands of people lined up at the local government office to file a request for a reassessment. In Ohio the numbers of requests have multiplied five times over. Robert W. Singer, mayor of Lakewood Township, New Jersey, said, “We have been absolutely getting killed. We have never had this before. Usually they are undervalued. Now, everyone is overvalued.”
The added cost is hampering local governments even more. Property taxes are calculated by a wide variety of things and no one formula is used for towns, counties, schools, and fire districts. Each one has their own set of rules. Because tax formulas vary so widely, not every assessment value that comes back lower is going to translate into a homeowner’s tax bill being lowered along with it.
Homeowners in trouble over tax bills
In the end, homeowners who need cash now to pay their tax bills have to be creative. Bonnie Grassley’s house in Fort Pierce, Florida is having problems making her tax bill. Though she only has to come up with an additional $150 a month, she is unemployed and living off of savings. She said, “My home means everything to me and it is all I really have. I am determined to keep it, come hell or high water. It is a terrible way to lose your home, just over taxes.”
