High property taxes driving a new revolt

Owning property is part of the American dream. It falls under the "pursuit of happiness" category that we bandy about when speaking of the American Dream. At least since the end of World War II and the advent of GI loans, men and women have raced to open fields to buy a plot of their own. This would be there nest egg to live in and raise a family. Owning a house was an accomplishment and couples lived for the day when then could have a mortgage burning party, a day that signified freedom from economic burden.

But there were always taxes. Usually the taxes in each community were fair and equitable. The proceeds were spent in the community you lived in and the results were usually very obvious. Taxes were spent on new roads, traffic signals, parks, preserves, more police, more resources for the local schools and a whole host of other items. This is why most people didn't mind paying their taxes. It may have taken money out of ones pocket but it went to worthy causes that improved the neighborhood.

However, if your locally elected politicians raised taxes like a gambling addict in a high-stakes poker game, you could always vote the bum out, as they say.

The problem as of late is tied to the housing boom. Not only are property values skyrocketing, but also now so are taxes as the two are indelibly tied to one another. Property taxes are going through the roof in many places making it unaffordable for the average Joe to make a life for himself and his family. As somebody whom is now a homeowner, I can feel his pain. You invest your life into something that's supposed to make it better and then after the bills are paid you are lucky if you have enough gas to get to work.

The other option would be to move to a less expensive neighborhood but even that has its problems. For one, less expensive is a relative term these days as even the crappiest ghettos are getting facelifts. It was not that long when I worked in New York City and the residents of Harlem were getting upset over a luxury condo being built in the vicinity of their 3-family Brownstones. Gentrification, that's what they were afraid of. They'd lived in Harlem for most of their lives and they didn't want to be driven from THEIR neighborhood that through think and thin, they'd survived in by Mr. Whitefolks and his newfound courage to move back to the big bad city. Who can hardly blame them?

But this exactly what is happening in areas outside of Harlem as far away as Idaho. However, if there's one thing that gets the dander up of the average unread American is unfair taxation, thus a tax revolt is in full swing.

ABC News reports that, "In Orford, N.H., a tin-roofed hunting cabin worth $10,000 was recently assessed at $200,000, just for its mountain view. Taxes on the cabin and its outhouse skyrocketed.

Around Lake Tahoe, along the California-Nevada border, property taxes have shot up 135 percent in the past four years.

Residents of Beaufort, S.C., pay $17 million more in property taxes today than in 2000.

Welcome to the flip side of the real estate boom. Years of rising home values have boosted property taxes steadily. Now, homeowners across the United States are fighting back.

"Real estate growth and real estate boom seem to be happening all over the country and [property-tax revolt] is an inevitable consequence," says Roger Sherman, a property tax expert in Boise, Idaho.

This year, legislative proposals, citizen initiatives, and lawsuits are on the agenda in at least 20 states. These new efforts reflect both residents' distrust of how their property tax dollars are being spent and concerns that rising assessments are driving working-class people out of popular towns and cities."

The article cites some specific areas where the tax revolt is happening:

" Idaho: Lawmakers are mulling over eight bills limiting property taxes. One would revise the "homestead exemption," which now keeps the first $50,000 of a home's value off the tax rolls. The bill boosts that to $100,000.

" South Carolina: Having capped the rise in property tax assessments at 3 percent per year until a home is sold or improved, the legislature is now considering a rollback of property taxes, replacing them with a hike in the sales tax.

" Georgia: Many lawmakers are backing legislation that would put a similar 3 percent cap into the state constitution.

" Nevada: Protesters are gathering signatures for a citizen initiative that would require the state to refund taxpayers if state revenues rise faster than inflation. They also want to cap the growth in property tax bills at 1 percent per year.

" Connecticut: After an uproar over massive assessment hikes for lakefront properties around the state, state officials have ordered cities and towns that have seen property tax spikes to calibrate disputed assessments to "comparable" properties, based on records of recent sales.

Ultimately our governments cannot tax their voters into bankruptcy and abject poverty. As I've said before this housing bubble has to burst and when it does, taxes will have to fall. It is only a matter time.