Monday, January 1, 2007

Americans are paying more property taxes today than ever before, and several states, including New Jersey and New York, will attempt to lessen the growing burden on homeowners in upcoming legislative sessions.

“In the past five years, the increase in property-tax collections has been nearly double the growth in personal income,” wrote economist Gerald Prante, who conducted a recent study of real-estate taxes nationwide.

“What the future has in store for property taxes will largely be a function of housing prices, but local governments can stem the rising tax bills in the process by lowering the rates and not merely spending the windfall revenue.”

The rate collected through property taxes rose just 2 percent from 1994 to 2000, according to the study. Since 2000, that amount has shot up 27 percent.

The rocketing rates, fueled by the rapid increase in residential home prices, are being closely watched by anti-tax advocacy groups such as Americans for Tax Reform.

“Too often, tax-and-spenders try to lower property tax taxes by tossing more money to the bloating local governments,” said the group’s president, Grover Norquist. “However, instead of leaving the taxpayers alone, big spenders blow through the state money and come knocking on residents’ doors for even more.”

Mr. Norquist says he will be watching closely and has never been afraid to campaign against politicians who don’t act aggressively enough to curb taxes and spending.

He pointed to the “property tax revolution” of the 1980s when the states of Massachusetts and New Jersey attempted to rein in out-of-control property taxes that had tested the patience of property owners.

In Massachusetts, lawmakers set about capping local spending increases. In New Jersey, lawmakers tried shifting the tax burden from property owners to state workers with an income tax.

Today, according to figures provided by ATR, the burden on Massachusetts property owners has fallen by 7.5 percent. New Jersey property taxes, meanwhile, have increased 36 percent above the rate of inflation.

“As experience in Massachusetts demonstrates, property-taxes reform must address the root problem — out-of-control spending,” Mr. Norquist said. “Rather than shuffling taxpayers’ dollars around and leaving the back door open for big spenders to sneak in more tax hikes, lawmakers should make sure that any reform includes taxpayer protections.”

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