Negative outlook

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 Quote:
Moody’s Investors Service has placed all U.S. municipalities on negative outlook, indicating its expectations for the whole sector over the next 12 to 18 months. It is the first time that the New York-based ratings agency issued a broad report on municipalities. The dismal forecast, which was released yesterday, reflects the challenges that local governments face due to the collapse of the housing market, financial-market disruptions and a deep recession. Municipalities will face reduced tax revenue as plummeting home values lead to lower property tax collections and as consumers cut back on spending, thus reducing sales tax revenue, the report stated.
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090409/REG/904099981
 
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 Quote:
Municipalities will face reduced tax revenue as plummeting home values lead to lower property tax
show me where this occurs? My assessment is just a "factor" ..the tax is what the tax is. I was assessed about 12 years ago ..my tax was unchanged. It merely reset the millage counter allowing it to spiral upward since the old assessment had reached its legal limit. Is this one of those "lies" that used to promote some other lie?
 
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I think it will take a bit more than a tea party to get anything done. The politicians are just laughing at the dummies who will reelect them at the next election.
 
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This whole thing is mind boggling. When your local city/state bonds get downgraded below "highest rating", you know that this is just the tip of the iceberg.
 
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 Originally Posted By: Gary Allan
show me where this occurs? My assessment is just a "factor" ..the tax is what the tax is. I was assessed about 12 years ago ..my tax was unchanged. It merely reset the millage counter allowing it to spiral upward since the old assessment had reached its legal limit. Is this one of those "lies" that used to promote some other lie?
A few months to a year ago the city of Vallejo, CA filed for bankruptcy because the union contracts with fire and police was too unaffordable. Most of these municipal bankruptcies do happen and are mainly to get contracts renegotiated. Tax does change. If your city has boomed 100% in the last 5 years, and you budget your expense based on this new 100% rise in new homes with 200% of the previous average value, then when the home price drop and people sell/foreclose/request for readjustment in their property taxes, the drop in property tax revenue could be huge. If you bought your home 20 years ago then you are fine.
 
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 Originally Posted By: Steve S
I think it will take a bit more than a tea party to get anything done. The politicians are just laughing at the dummies who will reelect them at the next election.
Beaching about the leadership is always easier than fixing the problem. This has always been the case in history. Our governator impeached the last governor because the last guy was doing not that great. Turns out our governator isn't any better (in fact he is worse).
 
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Property tax assessments, in many instances, have little to do with the actual value of a home (what it could be sold for in the market place), especially during times like this where home values have sunk. There's been article after article written recently about home owners who are mad as heck because their home values have decreased by as much as 50% in some cases, yet their mill levies/tax assessment values have gone up or have stayed the same! All they have to do is keep the same assessment when home values were at their peak. Or, the county assessor just says your homes assessed value is 30% more then it's worth in the market place. http://www.dailyfinance.com/2009/04/21/home-buyer-blues-prices-drop-but-property-taxes-dont/
 
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A few years ago, I received a letter from my Village showing how they calculated property taxes. Step 1 was: Determine how much money we will need for the coming year. I know the treasurer and told her, "That's how I run my household - just let the boss know how much I'll be needing next year".
 
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 Originally Posted By: PandaBear
 Originally Posted By: Gary Allan
show me where this occurs? My assessment is just a "factor" ..the tax is what the tax is. I was assessed about 12 years ago ..my tax was unchanged. It merely reset the millage counter allowing it to spiral upward since the old assessment had reached its legal limit. Is this one of those "lies" that used to promote some other lie?
A few months to a year ago the city of Vallejo, CA filed for bankruptcy because the union contracts with fire and police was too unaffordable. Most of these municipal bankruptcies do happen and are mainly to get contracts renegotiated. Tax does change. If your city has boomed 100% in the last 5 years, and you budget your expense based on this new 100% rise in new homes with 200% of the previous average value, then when the home price drop and people sell/foreclose/request for readjustment in their property taxes, the drop in property tax revenue could be huge. If you bought your home 20 years ago then you are fine.
I still don't see how this occurs. If my house is foreclosed on or vacant ..the current owner pays the tax. It's that simple. Tax burden doesn't change on the real property. In lower income blighted zones, where no one holds a lien on the property, homes may get abandoned ..where they would be sold at auction for the tax lien. Even if a property is "reassessed" ..it won't make any difference in revenue to the borough or township. It may alter the individual property's tax burden for ONE YEAR at most. The process is cumbersome and it would be unlikely that the appeal process would be completed before the taxing body would just up the millage to compensate. In short, while I can protest a new assesessment ..and not be valued at what THEY say my home is worth, it would merely index me lower in the TOTAL taxation taking place. My tax would still climb. Assessments are not done at fair market value. NOW intermediate sales between assessments MAY be assessed at sale value. For example: Two identical homes built in the 80's. One owned by the original owner ..one bought yesterday. The original will probably be taxed at the assigned value of the last county wide assessment of all properties. The new owner may be assessed at the same value or the current sale value depending on how long it has been since the last assessment or how ruthless the taxing body is where they're raking in a windfall. The owner may protest that he's paying 3x the tax of his neighbor ..and the county would say "You're right" ..and raise the neighbor's tax to match it.
 
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 Originally Posted By: Tempest
The evils of property taxes.
While they, and evey other tax, is a PITA to deal with, how should we fund the public sector at the local level - police, fire, city and county government etc.?
 
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I think some places send you a bill (Delaware). You don't pay, they don't show up. Or maybe they do show up ..but then send you a bill that ends up being a lien on the property. Naturally they play Hollywood accounting for THAT event. It's sorta fair ..I guess.
 

Tempest

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 Originally Posted By: Drew99GT
 Originally Posted By: Tempest
The evils of property taxes.
While they, and evey other tax, is a PITA to deal with, how should we fund the public sector at the local level - police, fire, city and county government etc.?
Sales taxes.
 
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 Originally Posted By: Tempest
 Originally Posted By: Drew99GT
 Originally Posted By: Tempest
The evils of property taxes.
While they, and evey other tax, is a PITA to deal with, how should we fund the public sector at the local level - police, fire, city and county government etc.?
Sales taxes.
Income taxes. Sales taxes have the ability to move. You may not spend where you live. Income is far easier to collect and is already in a system of collection regardless of where you live and where you work (for the vast majority). ..but that would be evil. Now if you want a national sales tax that is distributed FOR YOU by BIG G ..
 
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 Originally Posted By: Gary Allan
Income taxes. Sales taxes have the ability to move.
A sales tax, tough, would do two things: 1) It would negate the ability of illegal immigrants and tax cheats to skip out of paying taxes. 2) It would be a tax on money spent, not money earned. Here in Ontario, (and the rest of) Canada, they've decided, of course, that imposing *both* would best serve the wants of Big G!
 
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Actually, both would serve the society best. You would collect sales taxes and distribute them based on EIT to the respective communities. Naturally, this would just mean dual taxes and both would be exploited for whatever they could manage.
 
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