December 25, 2011; Source: Washington Post | Because it takes time for falling housing values to show up in property tax assessments, there has been a delay in the impact of property taxes that are due to cities and towns. But the Washington Post has published a sobering picture of the decline that will be seen in local and municipal budgets.
As an example, per the Washington Post, “Baltimore collected $815 million in property taxes during the most recent fiscal year, according to Bill Voorhees, Baltimore’s director of revenue and tax analysis. Next year it will shrink to $803.5 million. The following year, $773 million. The year after that, $735.7 million. The year after that, $729.4 million.” In fact, Baltimore does not expect these payments to rise again until 2016.
- There are three implications to this information:
- There may be stronger efforts to levy taxes on nonprofits;
- There will likely be increasing budget cuts for nonprofits that get part of their budgets from that local level;
- There are likely to be worse cuts to other elements of infrastructure needed to keep your community healthy and secure.
Frank Alexander, a professor and housing-law expert at Emory University, said that the storm has not yet hit for many local governments due to this issue. “It’s beginning in 2011, but it’s really going to hit in 2012 and 2013.”—Ruth McCambridge