U.S. economy encapsulated in one property tax bill

by philg

The town sent me a property tax bill today. The value of the house is down about 7 percent, reflecting the continued collapse of the U.S. private economy (Massachusetts does not benefit that much from the general expansion of the federal government, from TARP, or from the Detroit automaker bailouts). Even the Millionaires for Obama (the neighbors) aren’t prospering in the Obamaconomy. How about the tax owed? It is up about 7 percent, reflecting the pay raises of local schoolteachers, policemen, and firefighters as well as the continued rise in the costs of health care for public employees as well as the rising cost of pensions and health care for retired public employees.

7 thoughts on “U.S. economy encapsulated in one property tax bill”

  2. I had the (apparently-ill-informed) impression that property taxes tended to be a set percent of the assessed value, where “set” is the sum of the state base rate, various local rates and levies. Did yours go up even though the assessed value went down because a new levy had been passed by voters? (Again, my impression was that these kinds of things couldn’t be raised without a vote, though I suppose there are as many different approaches as tax jurisdictions….)

  3. Philip, is your tax bill up because the town raised property taxes or is it like Chicago where the market value of my home has collapsed, but its tax assessed value just keeps sky rocketing every other year?

    Meanwhile, Gary Catalani of superintendent of the Dist 200 schools (Wheaton, IL), collected $237,195 in pension payments last year, plus full medical benefits. His retirement package was getting too much attention so he moved to a small town near Scottsdale, AZ. He even picked up a little work as super at a local school district to give himself a little extra pocket change during his retirement: $205,000/yr + pension + benefits. Annual salary $442,195. One thing though is that at age 59 he had to “retire” a lot later than most teachers and superintendents.

  4. Ethan: Thanks for the link that you sent. “Some of the highest property taxes in NH.” is listed as one of the drawbacks to living in Keene. The document does list the Keene airport, which is a wonderful facility, but fails to mention its deluxe Instrument Landing System.

    Jeffrey: I don’t know exactly what the procedure is here in Massachusetts, but towns can raise the percentage of assessed value any time that they choose. They did this without limit until Proposition 2 and 1/2 passed (http://en.wikipedia.org/wiki/Proposition_2%C2%BD )in 1980. Towns cannot tax away the complete value of a house in less than 40 years, but otherwise can adjust rates as the town government sees fit.

    Douglas: Why is my tax bill up? I’m not exactly sure. As I noted in my original posting, the assessed value of my house is down by 7 percent. I am assuming that the tax rate went up.

  5. It’s like this: you pay one month’s deposit and rent your property from a landlord, or you pay the market value as deposit and rent it from the city. You can’t own property.

  6. I had the same thing happen to me in Holliston, MA – for the past two years. Last year, they even included an apology letter to everyone, explaining how assessed property values tend to lag the overall market (understandable, given the molasses-like flow of data within government). But this year, the exact same thing happened, along with an override. No apology letter this time… 🙂

  7. Folks: I did a little more research (i.e., talked to a neighbor who has lived here since 1972). The overall town budget is approved annually at a town meeting. I’m not sure what control we would have over major budget items such as public employee salaries and pensions, since they may be set by existing contracts that envisioned a very different world (8 percent returns to shareholders in public equities and bonds, substantial annual growth in the U.S. private economy). In any case, once the budget is approved it is divided by the tax base and that becomes the tax rate for the year.

    Assessments are intended to be market rate, as best as the town assessor’s office can determine. I think that they use actual sales data from the MLS as their primary source.

Comments are closed.