New Report: America’s Property Tax Burden on the Rise Again

December 3, 2006

If you haven’t already seen it, last week we released a new report detailing the rise in property tax burdens across the nation that accompanied the housing boom in recent years. Here are some of key findings from the study:

• Property taxes are highest in the Northeast, Texas, Illinois, and Wisconsin • New York and New Jersey dominate the list of high-tax counties • About half of all property taxes go to public schools • Property taxes rose faster than incomes from 2002 to 2004 • The housing market decline may force local governments to cut spending or raise property tax rates (Read the full report here (PDF).)

To get a sense of the overall trend, here’s a chart I pulled together from U.S. Census Bureau data. It shows per capita state and local property tax collections from 1960 to 2004, in inflation-adjusted 2004 dollars. Note the sharp drop-off in property taxes following the passage of California’s Proposition 13 in 1978, the gradual upward trend that resumed in the mid-1980s, and sharp spike since 2000 from the housing boom:

As we’ve noted before, our Annual Survey of U.S. Attitudes on Taxes and Wealth consistently finds that property taxes are viewed by taxpayers as the “least fair” state and local tax. So it’s no surprise that the recent upward trend in property tax burdens has bolstered support for property tax reform in states like Florida.

For more on the economics of property taxes, see our “Property Taxes” section of the website.


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