Unpaid Property Taxes and Falling Property Values - Two More Dropping Shoes

Unpaid Property Taxes - Take a look around the country, and you'll see a rise in the number of people that cannot pay their property taxes. This means less money in the city and county coffers, and that means cut backs in services like police, fire, hospitals, education and the other basics we depend upon. In most cases, the taxes will be collected, but that could mean a wait till the property is foreclosed and sold. And that involves legal expenses that sometimes exceed the amount of the taxes. Yikes.

Falling Property Values = Lower Taxes Collected - Yes and no. Falling property values means the base of property values has fallen, and if the tax rate is kept at the same level, that means lower taxes collected. But what we are seeing throughout the county is an increase in the millage rate, because local governments are finding it harder and harder to cut back . . . after the housing bubble years of plenty. You see, local governments were raking in more than their budgets for a number of years, but instead of saving it for a rainy day, they expanded services and gave out pay increases like candy. The process of rolling that back will not be easy, and in many cases will not be legal. The only alternative is to increase the millage rate as the tax base falls. Double Yikes.

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