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I got my RE tax statement in Maryland in June and they were increasing my taxes for the current fiscal year by $1300. (up from $6200 to $7500). They even had the nerve to say my property appreciated by $50K. (Thank god, I sold my home in Maryland 2 weeks ago).
I purchased a new home in Florida earlier this year. The previous property taxes for 2009 were about $6000. Now I get the new tax assessment (for year 2010) and the property taxes are going up by either $150 or $400 depending on it some law is passed or not. Either way, property taxes are going up. But they assessed my new home at 70K less than last years assessments.
So both Florida and Maryland (I'm sure it's similar in other states also), use some funky math in order to maintain the same tax revenue each year. I know it's in both State's Constitution about maintaining tax revenue. And I called both local county government and they say there's nothing I can do. Maryland was so funny, they told me I had to wait till next year to appeal the assessment since Maryland does it based on 3 year cycles (my home was assessed in 2007). I told them that it doesn't help me for this current year. I even joked that if the assessment was lower for 2010, could I get a refund by being overcharged in 2009. Yeah right, good luck getting a refund from local government.
But it's very frustrating dealing with real estate property taxes. During the boom when values increase, the local/state government jacked up the real estate property taxes on homeowners. Now that property values have gone down significantly, they aren't willing to go down on the taxes.
So state/local government win either way.
The easiest way for governments to save money (saving money would be the same thing as raising tax collection revenue) would be to lower the temp in each govt building to 60 degrees in the winter time (Maryland) or increase the temp in the summer time to 78 degrees (Florida) to save on energy costs. Why doesn't government figure out a better way to maintain revenue. Oh wait, it actually takes critical thinking to save money but any idiot can collect tax revenue.
I got my TRIM notice last week and my primary residence taxes went down by 15% if they pass the budget as it is now.
Overall my taxes went down by 25% for all my properties.
Many homeowners are apt to be disappointed that their property taxes are not likely to reduce, even though their home values are declining.
Municipalities ( schools, police, fire, parks, library, public works, admin, debt servicing...) need $X to function. Sales tax revenues are substantially reduced in many areas because consumers are not buying. New construction taxes/contributions are also substantially reduced from previous times.
Most employees would be challenged to function well if indoor temps were maintained at 60, during the winter. As much as I prefer to hold the line on property taxes, I do not think that municipal employees should need to work in conditions inferior to other businesses. Most of such employees work with the public, including students. Imagine parental reaction to children sitting in 60 degree temps all winter.
Follow the money. The majority of my property taxes go to schools. Illinois is a teaching tenure state. It is almost impossible to get fired, regardless of performance, once tenure is achieved. Pension plans are very rich in some communities. It's stuff like this that puts public employees at an advantage to the private sector.
So both Florida and Maryland (I'm sure it's similar in other states also), use some funky math in order to maintain the same tax revenue each year.
It costs $X to operate a municipality, regardless of property values.
Previous new construction, escalating home values and robust economies encouraged voters to approve various referendums enabling municipalites to create bond debt to pay for municipal improvements, like schools, parks, libraries, new municipal buildings and so on.
Servicing that debt takes revenue which is derived from property taxes.
You really do not want to live in a bankrupt community.
Most employees would be challenged to function well if indoor temps were maintained at 60, during the winter. As much as I prefer to hold the line on property taxes, I do not think that municipal employees should need to work in conditions inferior to other businesses. Most of such employees work with the public, including students. Imagine parental reaction to children sitting in 60 degree temps all winter.
Follow the money. The majority of my property taxes go to schools. Illinois is a teaching tenure state. It is almost impossible to get fired, regardless of performance, once tenure is achieved. Pension plans are very rich in some communities. It's stuff like this that puts public employees at an advantage to the private sector.
A lot of modern societies have started this energy saving (trimming on electricity costs in their public buildings) The Japanese government started setting the room air temperatures in their public building in the 60s during the winter time. They estimated it saved them $5K US dollars each month per building. That's a significant savings.
I've worked in private buildings in the US and the owners have started doing temperature regulations also. They didn't sneak around and changed the temperatures.. There was a bulletin posted that this was done to conserve on operating costs. The employees first griped about it but they just got used to the temperatures and adjusted.
Americans are too demanding of their workplace condition. Just wear a sweater to work in the winter time or light clothing in the summer time. Workers will get used to temperature changes.
What I am really trying to get is that governments are so inefficient at budgeting. There are 2 ways to raise revenue. 1. Raise taxes 2. Cut costs.
A monkey can be trained to raise taxes. It takes brains to devise plans to cut spending.
It's like the Washington DC school system. Probably one of the worst school systems in the United States. They claim they need more money. But on closely analysis, the DC school system spends more money per child, than just about any other school system in America. Why? It's because the wealthier parents who actually pay the majority of the real estate taxes to support the DC public school system still end up sending their children to private schools. So their kids do not even use any of the public school resources and that leaves more tax revenue to be spent on the kids that want to go to public schools. And the kids still are not taught well, high drop out rate etc. Sure, some of it is social problems but you can't blame society for all of your problems. And that's my point. We just have wasteful public spending.
I've seen property tax breakdowns. So I know where the money is going (schools, fire, police). But where the real breakdown of wasteful spending? There's a lot of corruption/abuses in the public sector. That's the main reason for budget crisis these days. Government does not know how to operate with reduced spending. They just want to maintain their tax base and keep on spending, regardless if it's helpful or wasteful.
I purchased a new home in Florida earlier this year. The previous property taxes for 2009 were about $6000. Now I get the new tax assessment (for year 2010) and the property taxes are going up by either $150 or $400 depending on it some law is passed or not. Either way, property taxes are going up. But they assessed my new home at 70K less than last years assessments.
That's extremely common in Florida. The person who owned the house before you probably had it homesteaded, which meant that their taxes couldn't go up more than 3% a year no matter how much their property values went up. So you end up with people who have owned a home a while paying thousands of dollars less in taxes than the people next door because the basis for calculating their taxes is their home value in 1993, and the people next door are calculating their taxes on a 2005 purchase price.
We bought pre-boom in 2001 and homesteaded the property ASAP in order to lock in the tax stuff. If we sold our home, the new owner would be paying twice as much in property taxes as we did the first full year they owned the house.
That's extremely common in Florida. The person who owned the house before you probably had it homesteaded, which meant that their taxes couldn't go up more than 3% a year no matter how much their property values went up. So you end up with people who have owned a home a while paying thousands of dollars less in taxes than the people next door because the basis for calculating their taxes is their home value in 1993, and the people next door are calculating their taxes on a 2005 purchase price.
We bought pre-boom in 2001 and homesteaded the property ASAP in order to lock in the tax stuff. If we sold our home, the new owner would be paying twice as much in property taxes as we did the first full year they owned the house.
Yeah, I am aware of all the real estate tax laws put in place to protector long time homeowners. (really they were originally meant for senior citizens on a fix budget to protect for increase in property taxes).
Maryland has the same/similar law as Florida.
My point is government needs to be more efficient of doing business. It needs to be less reliant on tax revenues and work with with watch they have.
I get a good laugh of "potential furloughs" in order to save money with some local/state government employees.
Honestly (and my wife has been a state govt employee for years prior to moving down to florida), she was working 30 hours a week, but getting paid for 40 hours of work. With these furloughs, workers should actually have to work 32 hours and do 32 hours of work. But they will probably just end up doing 22-23 hours of work in a 32 hour work week and still need to raise real estate taxes to support the inefficient workers.
I just received my MD tax bill (rental property) - and the postage date was 30 June - today would be 22 August... if I was able to pay it in July, I would have saved 1/2% on that crafty little county piggyback tax. I guess I'll be calling them on Monday to find out if I can have the transportation route changed from Pony Express to at least something with wheels.... a stagecoach perhaps? I agree that I don't know what the heck is going on in MD... my property was valued outrageously a couple years ago - not long ago, I thought, and my taxes went up by $1300.00 per year... now I get this new notice, and they've gone up another $500.00... I think that's rather creative, especially since the valuation of my house went DOWN by almost $30K. Since I am not residing in the property, they can hit me with them all at once... I'm trying to figure out what the heck an "ad valorem charge" is - as that is almost half of the increase.
Maryland cannot be getting hit as hard as many of the other areas of the country, so I'm at a loss... look at the number of government employees and contractors in that area... as well as the services that are still afloat because the government employees are still getting a paycheck. MD can't figure out how to balance its books?
I have a good renter in the property now, so I don't want to turf them out. As soon as the renter wants to move, however, I'm ditching that property. I know I won't get the savings, since I haven't lived in it 3 years before I sell it, but cutting my losses with MD and running sounds like a plan. I need to find out what ran amok with this assessment, however...
Maybe I'll send them the check without that cool little "ad valorem charge" and tell them they got assessed with a "stupidity and waste, fraud and abuse" penalty.
In some states the "assessment date" for real estate taxes can precede the imposition of tax by by as much as 13 months. For example. A value established by a November 1, 2008, assessment date is noticed to the taxpayer in January 2009. Assessment challenges take place through March, 2009. Budgets get set in July through September 2009. Taxes for 2009 are calculated based on the November 1, 2008, value, as adjusted through assessment challenges, and payable for 2009 in 2010. So the taxes you get noticed in January 2010 are based on 2008 valuations. It can take time for the decline in value to "catch up" with the tax due and payable.
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