Property Taxes Are Coming to Get You

ByABC News
May 13, 2003, 1:41 PM

N E W  Y O R K, May 14 -- Roger Ribar is mad as hell, but according to the law, he still has to take it. He just doesn't have to take it well.

The 49-year-old auto-shop worker is so incensed by rising property taxes in his hometown in Coffee County, Tenn., he protested by delivering his tax payment $279.35 in nickels, dimes and pennies. He counted the change twice on his own, but insisted on taking a day off from work to wait while the county clerk counted the change at the bank because, he says, "I don't trust the government. I love my country, but I don't trust the government."

He's not alone. Given the fact that government spending sprees (combined with revenue shortfalls) in recent years have landed local and state governments in fiscal fiascos, the bill is getting passed to property owners, who in some cases are paying twice as much in property taxes as they had in previous years. It's understandable why some Americans are comparing city governments' fiscal mismanagement to the scandal-ridden Enrons and WorldComs of the business world.

At the very least, rising property taxes have caused public outcry. In more extreme cases, homeowners are taking it to the streets. Last week, for example, hundreds of homeowners in Newark, N.J. where the effective property tax rate is already 2.95 percent marched in front of City Hall; they are promising to march again in the immediate future.

About 73 percent of the taxes collected by local governments are property taxes, so they're an important source of revenue, particularly during financially difficult times. According to Washington D.C.-based tax research group Tax Foundation, property taxes in 2001 were expected to generate $256 billion.

High Taxes Scare Away Buyers

The rub for many homeowners is that, in many of the most attractive suburbs and cities, there is often a direct correlation between their property taxes and the quality of local schools in addition to services like collecting garbage and filling potholes. Most parents are willing to pay higher taxes in return for a good education for their children, but sometimes the size of the bite can scare away prospective residents.