Out of the 219 metropolitan statistical areas analyzed in the report, 120 (55 percent) posted an increase in average
property taxes above the national average of 3 percent, including Los Angeles (5 percent increase), Dallas-Fort Worth (8 percent increase), Washington D.C.
Residence homestead owners are eligible for a $25,000 exemption on their school
property taxes, for example.
Most local governments rely heavily on state transfer revenue,
property taxes, and charges for goods and services provided to the public to fund their governments (Chart 1).
Rather than increasing local aid and hoping the money will filter down to control
property taxes, a better approach would be to provide state incentives to cities and towns to enact policies that would cut costs and increase efficiency - such as joining with other communities to do joint purchasing, implementing fast-track permitting, reducing the taxpayer share of employee health insurance premiums, or signing a collective bargaining agreement with increases below the expected rise in municipal revenue.
Badanai is not alone in his unhappiness over commercial
property taxes; unrest among its members recently spurred the Canadian Federation of Independent Business (CFIB) to create a report indicating the disparity between the property tax paid by residents and businesses to the province.
Since residential property values make up nearly two-thirds of the state's overall property wealth, the vast gaps in residential property wealth accounted for much of the discrepancies in local revenue generated from
property taxes, according to a Reporter analysis of Illinois Department of Revenue data.
Kempthorne's plan isn't going over well with citizens who will continue to pay
property taxes for community colleges while other state residents would receive community college services without having to pay
property taxes.
The study shows that
property taxes are most regressive in municipalities where homeowner incomes vary widely but property values are relatively homogeneous.
But the impact of
property taxes is rarely so direct and varies from region to region.
When older Americans complained that rising
property taxes unduly burdened those with fixed incomes, states developed circuit breaker and homestead exemption policies to assist them with property tax payments.
While
property taxes may have declined as a share of city finances, absolute property tax revenues increased seven-fold since 1962.
The main problem is the extreme variation among school districts, rooted in our reliance on the link between school funding and
property taxes, supplemented by state sales taxes.
