Home sweet tax bite
Rising property taxes have some homeowners irate
Still, there's something about the property-tax bill that gets people riled. Sales-tax increases are a nickel-and-dime proposition on a daily basis, but property-tax bills are infrequent, big hits. Indeed, property taxes can be a natural bull's-eye in edgy economic times, says David Bradley, policy analyst for the Center on Budget and Policy Priorities in Washington, D.C. "The property tax is a riper type of target," he says. "Instinctively, people say, 'Let's stop the property tax from eating up more and more of our income.' "
That sentiment can certainly be found in Maine. Local property-tax collections have swollen by 26 percent since 1996-97, although incomes have risen slightly faster. Still, the state's property-tax burden is the highest in the nation, consuming about 5.1 percent of income. The backlash: a full-bore, Proposition 13-style measure that's even tougher than the original. It would roll back property values to 1996-97 levels and then limit taxes to 1 percent of that amount. Even if the local real-estate market were booming, a property's value for tax purposes could grow no more than 2 percent a year. There is an out: Localities can raise more money through special taxes. But the rules are strict. However, the rollback to 1996-97 values could be vulnerable, as the Maine Supreme Judicial Court has issued an advisory opinion saying that feature would violate the state Constitution.
Chicken Little? As for dire predictions about drastic cuts in services, Harriman, who's a leader in the campaign supporting the measure, says it's unfortunate public officials have "chosen to portray a worst-case scenario."
In Indiana, tax foes are contemplating not just limiting property taxes but even eliminating them. A ballot measure would, among other things, authorize the legislature to exempt homes from property taxation. State Sen. Lindel Hume, coauthor of the attempt, calls the property tax antiquated and unfair, saying it sometimes forces people out of their homes. "It's one that served its purpose back when we didn't have the means of determining people's ability to pay," he says. But today, the income tax provides that yardstick, he says, and he wants a tax based on ability to pay to underwrite more of what the property tax now funds. That would very likely mean higher taxes for those with greater incomes, he says, but he views that as fairer.
In Washington State, antitax crusader Tim Eyman, not content with winning voter approval of four earlier tax-limiting measures, is back again with what he calls a no-cost solution. This time, Eyman, who runs a mail-order business selling fraternity and sorority watches, sees gambling as the ticket. His initiative would legalize electronic slot machines, tax the proceeds, and use the windfall--$400 million annually, he says--to cut property taxes. Currently, Indian tribes can have the machines. "This would level the playing field" on who offers such gaming, he says, while also attacking the state's "obscene and unsustainable property-tax burden." Opponents criticize creation of more gambling, and state officials say the payout is likely to be much lower, around $250 million.
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