Primer on property tax

We are almost to that part of the year where the County sends out a mailer indicating what tentative 2011 property taxes will be.  The mailer breaks out taxes for county, school, city, and "other."  The city portion of the mailer will be based on the preliminary levy established by the city council in September.  One of the reasons I argued for a lower preliminary levy (in response to those who argued that it could simply be lowered later) is that we will receive calls and email from residents who will respond to that mailer with some displeasure. 

Property taxes are related to value.  But, the important figure isn't just absolute value but also relative value.  Thus, it is possible for someone who's property value declines to actually see an increase in property taxes if their property value declines less than that of their neighbors. 

When property values were increasing residents paid less attention to the impact on their taxes.  But, with declining values they pay far greater attention. They assume that if values go down that taxes will, too. Again, that's not necessarily true.  If the city budget doesn't change and all properties decrease in value by the same percent, taxes will remain unchanged. That poses a real problem for all cities as I think that residential values will continue to fall over the next few years and people want to see property tax relief.

The next few years will be interesting and challenging for cities. It used to be that the matra from residents was "do more with less."  It seems that the number of people who are saying "do less with less" is increasing.