Will A Housing Bubble Burst Lead to Property Tax Hikes?
August 24, 2005
Finally — a school district that returns money to its taxpayers rather than having to spend it on “just something.” This does make you wonder though…if some school districts are lowering tax rates during the housing boom because revenues can keep up as a result of higher property values, what happens if the doomsayers are right and the housing bubble does burst? Unfortunately, it may mean property tax hikes all across the country, which could cause an even further downward spiral in a tumbling real estate market. From The Ithaca Journal:
Real estate assessments in the Ithaca City School District have risen by more than 10 percent in the past year, making the school district’s new property tax rate the lowest it has seen in seven years. The ICSD Board of Education approved on Tuesday a 2005-06 tax rate of $17.95 per $1,000 of assessed value. That’s a 5.4 decrease from last year’s rate and lower, too, than the $18.27 per $1,000 property owners paid in 1998. While the tax rate falls, though, the tax levy — the total amount of support the district receives from taxpayers — is rising as planned. The district’s $82.76 million budget for 2005-06, which voters approved in May, boosts the levy by 4.32 percent to $57.64 million. “Obviously, everyone would rather have the rate go down than up,” board President Roy Dexheimer said Tuesday. But “we’re still raising the amount of money we said we were going to raise.”