Tag: property tax

Where Do People Pay the Most in Property Taxes?

Mary Pat Campbell

Link: https://taxfoundation.org/property-taxes-by-state-county-2022/

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Median property taxes paid vary widely across (and within) the 50 states. The lowest bills in the country are in six counties or county equivalents with median property taxes of less than $200 a year:

  • Northwest Arctic Borough and the Kusivlak Census Area (Alaska)*
  • Avoyelles, East Carroll, and Madison (Louisiana)
  • Choctaw (Alabama)

(*Significant parts of Alaska have no property taxes, though most of these areas have such small populations that they are excluded from federal surveys.)

The next-lowest median property tax of $201 is found in Allen Parish, near the middle of Louisiana, followed by $218 in McDowell County, West Virginia, in the southernmost part of the state.

The eight counties with the highest median property tax payments all have bills exceeding $10,000:

  • Bergen, Essex, and Union (New Jersey)
  • Nassau, New York, Rockland, and Westchester (New York)
  • Falls Church (Virginia)

All but Falls Church are near New York City, as is the next highest, Passaic County, New Jersey ($9,999). 

Author(s): Janelle Fritts

Publication Date: 13 Sept 2022

Publication Site: Tax Foundation

AMENDMENT 1 WOULD GUARANTEE $2,100 PROPERTY TAX HIKE FOR TYPICAL ILLINOIS FAMILY

Mary Pat Campbell

Link: https://www.illinoispolicy.org/amendment-1-would-guarantee-2100-property-tax-hike-for-typical-illinois-family/

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Amendment 1 would grant government unions unprecedented bargaining powers as a “fundamental right,” including the power to override voters and state lawmakers. Proponents are selling it as a constitutional ban on passing right-to-work laws – laws that protect employees’ rights to keep their jobs without having to pay fees to a union. Illinois is not among the 28 states that currently have right-to-work laws, so that aspect has little meaning.

The amendment does include three other provisions that together would severely weaken taxpayers’ voices in state government and make it easier for government union bosses to make unaffordable demands in collective bargaining contracts. First, virtually anyone would have a fundamental right to collective bargaining if they could be considered an employee in any context, including even prisoners. Second, bargaining would be expanded beyond just wages, hours and working conditions to include broad new subjects covering public policy decisions or how to run a businesses. Third, the amendment prevents lawmakers from ever limiting or scaling back on these rights in any way.

Even without these provisions, powerful government unions helped public sector wages grow 60% faster than the private sector in Illinois from 1998 to 2019.

Peer-reviewed research shows stronger government worker unions cause the cost of government to increase, with powerful unions putting even more upward pressure on benefits than on wages. Government worker retirement benefits, which flow mostly to government union workers, have left Illinois local governments with $75 billion in pension debt and are already the primary cause of rising property taxes. Government unions helped Illinois politicians build the state and local pension crisis by supporting both unaffordable benefits as well as irresponsible funding games that pushed costs into the future.

Nationwide data from 2010 to 2019 show a significant statistical association between the percentage of government workers who are members of a government worker union and each state’s average effective property tax rate.

Author(s): Adam Schuster

Publication Date: 15 Jun 2022

Publication Site: Illinois Policy Institute

CHICAGO PENSION DEBT DROVE CITY PROPERTY TAXES UP 164% BEFORE COVID-19

Mary Pat Campbell

Link: https://www.illinoispolicy.org/chicago-pension-debt-drove-city-property-taxes-up-164-before-covid-19/

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Chicago residential property tax collections across all units of government in the city were up 164% from 2000 to 2019.

Property taxes paid by homeowners within the city grew nearly 30% faster than property taxes in suburban Cook County during those 20 years. Suburban residential property taxes grew 116% while total residential property tax collections county-wide grew 133%.

While some of Chicago’s increase was driven by new property or growth in existing property tax values, the average homeowner still saw an 85% increase in their bill from 2000 to 2019. Since the record-setting 2015 property tax hike to pay for pension debt, the average Chicago bill has risen 27%. Prior to that hike, property taxes were on a lower trend from 2011 to 2014.

Author(s): Adam Schuster

Publication Date: 28 Feb 2022

Publication Site: Illinois Policy

OVER 100% OF DANVILLE MUNICIPAL PROPERTY TAXES CONSUMED BY PENSIONS

Mary Pat Campbell

Link: https://www.illinoispolicy.org/over-100-of-danville-municipal-property-taxes-consumed-by-pensions/

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The average Danville household owns nearly $40,000 in state and local pension debt.

Illinois’ worst-in-the-nation pension debt has become a well-known problem. Over $144 billion in pension debt for the five statewide retirement systems breaks down to nearly $30,000 in debt for each household, which must be paid with further tax hikes or further cuts to core government services.

Less well known is the nearly $75 billion of pension debt held by local governments in Illinois, which is the primary reason for Illinois’ second-highest in the nation property taxes. Combined with the state’s pension debt, politicians who mismanaged the pension system dug a $219 billion hole.

In Danville, the average household owns nearly $40,000 in state and local pension debt, with over $10,000 of that debt stemming from local systems for police, firefighters and municipal workers. To pay off that pension debt, a Danville household would have to give up 110% of an entire year’s  $36,172 median annual income.

Author(s): Adam Schuster, Perry Zhao

Publication Date: 20 Sept 2021

Publication Site: Illinois Policy Institute

Where Do People Pay the Most in Property Taxes?

Mary Pat Campbell
Where Do People Pay the Most in Property Taxes?

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Property taxes are the primary tool for financing local government and generate state-level revenue in some states as well. In fiscal year 2019, property taxes comprised 31 percent of total state and local tax collections in the United States, more than any other source of tax revenue. In that same year, property taxes accounted for 72 percent of local tax collections and 27 percent of overall local government revenue.

…..

The six counties with the highest median property tax payments all have bills exceeding $10,000—Bergen, Essex, and Union Counties in New Jersey, and Nassau, Rockland, and Westchester counties in New York. All six are near New York City, as is the next highest, Passaic County, New Jersey ($9,881). 

Author(s): Janelle Cammenga

Publication Date: 1 Sept 2021

Publication Site: Tax Foundation

Suburban Residents Risk Losing Homes Over Rising Pension Costs

Mary Pat Campbell

Link: https://www.riverbender.com/articles/details/suburban-residents-risk-losing-homes-over-rising-pension-costs-52884.cfm

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In the 1990s, Illinois property tax bills were around the national average. But in the two decades from 1999 to 2019, we’ve seen a massive 65% increase in residential property taxes, adjusted for inflation. That increase is what drove Illinois to have one of the highest tax burdens in the nation.

The source of Patricia’s – and her fellow Illinoisans’ – property tax pains? Public employee pensions.

More than 70% of Patricia’s property tax bill goes to the school district. While school districts account for a significant portion of property tax bills in localities across the United States, school district budgets across Chicago and Illinois are getting devoured by underwater pension systems.

While the state is responsible for paying employer pension costs for teachers outside of Chicago, rising pension obligations mean more state dollars are spent on pensions, leaving more classroom costs for school districts to fund through property taxes.

Author(s): Amy Korte

Publication Date: 5 September 2021

Publication Site: Riverbender

Op-ed: New Jersey’s fiscal mess might lead to statewide property tax. You’re forewarned, Illinois

Mary Pat Campbell

Link: https://www.chicagotribune.com/opinion/commentary/ct-prem-opinion-edit-fixing-illinois-chicago-budget-new-jersey-tax-20210423-a7dxpc5g4nhkrjgfbyzkrzvjxy-story.html

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Connecticut has opened the door for a statewide property tax that has no upper limit. It offers a “new” tax revenue source for states such as New Jersey that have failed to address their structural deficits and continue to live beyond their means. Many New Jersey homeowners refer to their local property tax bills as a second mortgage, since the burden often rivals or exceeds the monthly payments on their home purchase.

A review of New Jersey’s modern history of taxes shows citizens should rightly be concerned.

Our state enacted a personal income tax in 1976 to support public schools and provide property tax relief. The tax began with a simple two-rate structure consisting of a 2.0% rate on income below $20,000 and a 2.5% rate on income above $20,000. In 45 years, 8 brackets have been introduced without any substantive update to account for inflation, making this more burdensome over time. The only meaningful change has been to establish a new top rate of 10.75%, the 3rd highest in the nation.

Author(s): REGINA M. EGEA

Publication Date: 23 April 2021

Publication Site: Chicago Tribune

NJ Taxpayers To Be Byrned Again

Mary Pat Campbell
NJ Taxpayers To Be Byrned Again

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The state income tax eventually failed to stem the rise in the highest property taxes in the country since it was based on providing money to hundreds of de facto fiefdoms with no oversight. Ms. Egea goes on to speculate that Governor Murphy, with an even more pressing need for revenue, has another new tax in mind:

….

In 1976, New Jersey voters passed a constitutional amendment that dedicated the entire income tax to the Property Tax Relief Fund and lower property taxes in 1997 did help Brendan Byrne get reelected. There is no time for that this year so expect the massive debt and structural budget deficit to be the excuse for this new tax that should be hitting in 2022.

Author(s): John Bury

Publication Date: 26 April 2021

Publication Site: Burypensions

Detroit’s Black Wealth Tax

Mary Pat Campbell

Link: https://www.city-journal.org/detroit-racial-wealth-gap-property-tax-policy

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But this is Detroit, which has the highest effective property tax rate of any major city in America, at 3.58 percent of market value. If the tax man assesses your house at its full renovation cost, this would add $537 to your monthly mortgage bill, bringing it to $1,295.

That hefty charge might not look too bad if the quality of local government services is top shelf. As Charles Tiebout observed in his classic 1956 article on local public finance, people “vote with their feet” and shop for their preferred combination of services and prices among various localities. Some happily buy at the public services equivalent of Neiman Marcus, others at Walmart.

From public safety to education to infrastructure, however, Detroit is no Neiman Marcus. To be charitable, let’s suppose the city’s services are on par with those of other Michigan cities, where the average property tax rate is 1.54 percent. Elsewhere, then, a comparable $180,000 investment comes with a monthly mortgage bill of just $989, or $306 a month less than in Detroit.

Author(s): Stephen J. K. Walters

Publication Date: 9 April 2021

Publication Site: City Journal

Sources of Tax Revenue: U.S. vs. OECD

Mary Pat Campbell
Sources of Tax Revenue: U.S. vs. OECD

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Compared to the OECD average, the United States relies significantly more on individual income taxes and property taxes. While OECD countries on average raised 24 percent of total tax revenue from individual income taxes, the share in the United States was 41.5 percent, a difference of 17.5 percentage points. This is partially because more than half of business income in the United States is reported on individual tax returns. OECD countries on average raised 5.6 percent of total tax revenue from property taxes, compared to 12.1 percent in the United States.

The United States relies much less on consumption taxes than other OECD countries. Taxes on goods and services accounted for only 17.6 percent of total tax revenue in the United States, compared to 32.3 percent in the OECD. This is because all OECD countries, except the United States, levy value-added taxes (VAT) at relatively high rates. State and local sales tax rates in the United States are relatively low by comparison.

Author(s): Cristina Enache

Publication Date: 17 February 2021

Publication Site: Tax Foundation

Sources of Government Revenue in the OECD

Mary Pat Campbell
Sources of Government Revenue in the OECD

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When comparing average 2019 and 1990 OECD tax revenue sources, the most notable change is a decrease in individual income taxes versus increases in social insurance and consumption taxes. The share of revenues from corporate income taxes has also increased compared to 1990 (despite declining corporate income tax rates[4]). The relative importance of property taxes as a source of revenue has stayed roughly constant.

Author(s): Cristina Enache

Publication Date: 11 February 2021

Publication Site: Tax Foundation

CHICAGO HAD $41,100 IN DEBT PER TAXPAYER BEFORE COVID-19, SECOND TO NEW YORK

Mary Pat Campbell

Link: https://www.illinoispolicy.org/chicago-had-41100-in-debt-per-taxpayer-before-covid-19-second-to-new-york/

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A new report from government finance watchdog Truth in Accounting gave the Windy City an “F” for financial health. Chicago’s massive $36 billion net debt stems primarily from pensions.

Chicago city taxpayers were just hit with $94 million in property tax increases and $38 million in higher fines and fees, including a policy for speed cameras to ticket drivers for going just 6 mph over the speed limit, to help close the city’s budget deficit. City leaders placed much of the blame on COVID-19’s impact on government revenues, but a recent report from fiscal watchdog Truth in Accounting shows Chicago’s problems existed long before the pandemic.

Author(s): Justin Carlson

Publication Date: 11 February 2021

Publication Site: Illinois Policy Institute