Soaring property taxes are a primary concern of state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding changes in the system so schools are more equitably funded.
Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to change the tax system substantially and find another way to help pay for schools that closes the quality gap between wealthy and poor communities.
“People are facing being taxed out of their homes,” said Ted Harris, a 69-year-old retiree living on the Nevada side of Lake Tahoe, whose taxes climbed from $2,200 in 1990 to $12,000 last year. “Government simply swallows the money and finds lots of reasons to spend that money.”
From Texas to Illinois to Pennsylvania, lawmakers are weighing property tax caps, limits, exemptions and other ways to ease the burdens for homeowners — whose tax bills are the downside of rising home values.
Proposals to change the system have become part of the gubernatorial campaigns in New Jersey and Virginia, the only states with gubernatorial races this year.
In Maryland, the Board of Public Works voted 2-1 last month to keep the state property tax rate at 13.2 cents per $100 in assessed value.
Republican Gov. Robert L. Ehrlich Jr., who sits on the three-member panel with two Democrats, supported a 1-cent reduction.
The $4.94 billion budget the D.C. Council unanimously approved May 10 includes a provision to raise the city’s homestead deduction, although most homeowners’ tax bills are expected to rise as property assessments continue to skyrocket.
In most states, cities, counties and municipalities rely upon property taxes to pay for much of local government and schools.
Nationally, kindergarten through 12th-grade education covers 42.8 percent of its spending with local funds, with most of the rest coming from the state and less than 10 percent, on average, from the federal government, according to 2002 federal statistics. Part of the property tax pressure stems from a trend in recent years for cash-strapped state governments to limit their help to local governments.
“Property tax relief is the mantra of the day,” said Bert Waisanen, an analyst at the National Conference of State Legislatures who tracks tax policy. “States are acting to provide as much additional relief as they can afford to.”
In response to widespread complaints, Nevada — the fastest-growing state in the country — signed into law last month a cap on property taxes, limiting growth to 3 percent per year on all single-family, owner-occupied primary residences, with a higher cap of 8 percent for commercial property and second homes.
Legislatures are debating bills in many states, but so far:
Texas legislators agreed to lower property taxes for schools, with the state picking up a bigger share of the education load. The House and the Senate are trying to settle on the size of the tax cut and how the state will raise the money to cover the cut, but time is running out.
New Jersey legislators are moving forward with plans to ask voters to approve a constitutional convention that would take on changes in the property tax system,.
Illinois lawmakers are debating a plan to swap higher income taxes for lower property taxes, a response to years of demands that the state change the way it pays for education.
Pennsylvania last year legalized slot-machine gambling with some of the money to cut local school property taxes, but many cities and towns still are considering whether to sign on.
“People are saying ‘Wait a minute, we need a rest,’” said Pete Sepp with the National Taxpayers Union, an Alexandria group that seeks limited government and low taxes.
Just from 2002 to 2004, the nation’s median price of a single-family, metropolitan home rose from $158,100 to $184,100, according to the National Association of Realtors. Some areas — such as Las Vegas, Fort Lauderdale, Fla., and Riverside, Calif. — experienced 30 percent increases.
That also means higher taxes, which homeowners don’t like.
Staff writer Chris Baker contributed to this report.