A double whammy for homeowners

"So to make up for the gap, local officials are increasingly boosting tax rates."

If this is what is needed to keep our cities running, so be it. Most of our tax dollars go to the black holes of fed, state, social security taxes. Local property taxes are one of the few taxes we pay for which we actually see services in exchange...fire, police, senior services, schools, roads, snow removal, etc. I'd go one step further and say we should eliminate state and most federal taxes and raise local taxes. At least you have some control over this money.

The system has to change, this is ridiculous...

many of the municipal budgets were overly reliant on real estate taxes, and consequently govt became even more bloated. We will see a correction there as well in terms of layoffs of public employees. The one thing that bothers me most is that towns and cities will play the "fear card" as they always do. They will threaten to cut police, and fire employment first (playing on people's safety fears), then schools (god forbid, the kiddies future prospects suffer) because of tight budgets. In many cases people with a perceived vested interest in these services will give in, while others w/out kids living in low crime areas will complain (and rightfully so...

And higher taxes will put further downward pressure on home prices, which mean taxes will need to go up further, etc. etc.

God forbid that local governments (and the US government) actually cut costs.

good point Lou, ANYTHING that increases the overall cost of home ownership without a perceived benefit will have a detrimental effect on home values.

This will be the trend for years to come, keep on spending, and raising taxes. Income, sales, property taxes all going up, and spending not going down.

Seems most of the readers of this section of the news are highly informed, and most have the same opinion, which brings me up to my point. Seems like the government is working for another subset of the population... Maybe the uninformed. Things like this want to make me protest against the government, but it seems useless if the malinfomed public elected our law making government. Very frustrating to see the downfall of our great country.

Fabu-
We pay $8k in taxes already.
We have a private well, private sewer, no trash pick up and an old road.

BUT- the police department is getting a brand new shiny building...why? I'm not sure, since the biggest problem there is in my town is a pumpkin smasher running loose during Halloween season.

Didn't Deval win his campaign on the promise of lower property taxes? I voted for Muffy

This has been happening in Arizona for the past several years. Home prices have declined up to 45 percent, yet the property taxes have increased.

But wait a minute. If the tax rate goes up and the assessed value goes down, the total paid may not go up. Or at least not by much. FWIW, my property tax assessment for 2009 is about half of what it was for 2008. If the rate goes up in 2010 (which seems likely), the City would have to increase the rate by almost 50% to have me pay more than I paid in 2008 (assuming my valuation stays the same - even more if it goes down from here). The reality is that most people are paying less property tax right now.

I understand that things are bad out there (you'd have to be blind not to), but is there a reason why these blogs must view everything through the lens of it's most dire interpretation?

The public employees unions are in bed with the politicians. Their salaries just keep going up faster then the rate of inflation while the rest the private sectors have been stagnant. Cops and firemen are making $150,000+/year and get full retirement at 52 years old with 80-100% of pay. Many get a pay raise at retirement as they claim disability. I don't know what is more insane their salaries for a job that does not require a college degree or the benefit packages that most anybody in the private sector could only dream of having. It's ridiculous and were all paying for it in our taxes. I wish I knew when I was young how sweet of a deal working for the government was. I would have worked half the hours I've worked and be retired by now.

Furthermore, taxing shelter is just plain stupid. Food and shelter are the most basic necessities, and shouldn't be taxed. No one should have to worry about how their going to pay the property tax on their home when they turn 80. To be fair the mortgage interest rate deduction is bogus too as it is a deduction for home owners but not renters. I'm not an anti-tax conservative, I just believe in better tax code that is less corrupt.

Susan,
Your post confuses me. My house dropped $20K in value last year but I'm paying an extra $600 in real estate taxes. Maybe the city will reassess my property value but they usually aren't too quick about that. I'm not expecting my RE taxes to go down anytime soon.

Unfortunately Brad, the percentage of the population that are well informed is rather small. And yes, I agree, much of the blame needs to be placed on our shoulders for continuing to elect and re-elect politicians that care more about themselves and their special interest groups then the general population. Granted, there are not many choices for honest politicians that truly have the public in their interests. We had a few options in the last election, Ron Paul being the primary choice and to a lesser extent candidates like Fred Thompson and Dennis Kuchinik. Of course the American Sheeple were more concerned with the latest American Idol gossip than educating themselves and making informed decisions in the election.

And so, here we are, instead of $500 billion deficits under Bush, we'll have trillion dollar deficits under Obama. The more things change, the more they stay the same.

I own a house in Quincy and our taxes went up significantly. Quincy charges $12.60 per $1,000, whereas Braintree is charging $9.07 per $1,000. Services in Quincy is not 39% better than Braintree.

Wait: assessed values have dropped so taxes should naturally follow. But to avoid that towns will raise taxes, presumably to bring in roughly the same amount of money as before in order to provide the same level of service.

In theory then you have two opposing forces acting on the overall cost of a home: falling value makes the home cheaper, while taxes make it more expensive. So I'm not sure that cost will actually rise. Right?

Actually there's no way on earth taxes will rise high enough to offset the current plunge in values. So even with higher taxes homes will still be cheaper than they have been, just slightly less so.

I fully accept that this could be way off the mark. But why? Econogeeks (much love and respect): what am I missing?

It costs a certain amount to run a town, regardless of house values. Prop 2.5 says that the total tax received by a town can not exceed 2.5 % more than the previous year, with many caveats for new construction, overrides, etc.

So, if house prices plunge, rates have to increase to make up the gap. As long as they don't raise more than 2.5 % more than last year in total $$, they are OK. Likewise, if property values rise, rates have to decrease so that they stay under 2.5 %. However, prop 2.5 applies only to the town as a whole, and not to your individual house. Still, your personal situation should follow the town as a whole.

My assessed value went down this year, but the rate went up and in my personal situation, it was pretty close to a 2.5 % increase in TOTAL tax.

bv, you're most of the way there, but miss the target. Prop 2.5 has only an indirect effect on individual taxpayers. And the fact is, these increases only (partly) make up for a budget shortfall from last year; they don't raise the levy to a new level, which is what the proposition restricts.

On another note: Frankly, I find much of the complaining about city taxes and spending infantile. It's hilarious to hear howls of protest about real estate tax hikes from the same people who opposed the much-too-small stimulus bill, which included relief to states, and should have included more.

On the one hand, you do have some powerful select groups who live high on the hog on the taxpayer's dollar. I can't print what some hard-working cops in my family had to say about some of their brothers in Massachusetts. And yet, do the people who complain ever show up at a town meeting? Vote? Call an alderman? Organize? It's to laugh.

That said, even if you trimmed every nickel of fat out of the budgets, you'd still be in the same pickle. Tax receipts are way down. Cities and towns are making huge cuts. And even that isn't enough. You're going to pay more, and get less. Grow up and deal.

And if you think you can do better, well, maybe you can--if you get off your arse and try.

Cambridge Landlord,
I have been reading/enjoying the blog and discussions for awhile now but your comment brings me out of lurking mode …and for something completely off-topic. I am curious where you got your salary figures for cops and firefighters. No one seems to appreciate these services until they personally need them. My father is a lieutenant in the fire department for a large city and has been there for over 30 years. I assure you, his salary has never been close to $150K and the only reason he makes a decent living is because of all the overtime he has been willing or required to put in over the years. This sometimes leads to 36-hr straight shifts. It is also the luck of the draw in any given year whether their schedule will take them away from their families on most weekends or holidays. Granted, their paid "downtime" at the station can be enjoyable, but how much would you suggest paying someone who puts their life on the line when they go to work (whether or not they have a college degree - which is a whole other generalization)? Also, these people sometimes experience unimaginable things which require grief and post-traumatic stress counseling.

The fire departments typically force retirement at around 60 yrs old because it really is a job for a younger body. My father's hearing is shot because of the constant exposure to sirens and high decibel sounds during fires. Firefighters also have higher risks of lung and other cancers due to their exposure to carcinogens from the smoke and burning materials - so maybe they deserve good health benefits. They often work without an up-to-date contract, in conflict with the public officials you think they are so close with. I agree there is poor budgeting and wasted money in towns and organizations, and there are certainly bad apples that give good people a bad rap. But please avoid generalizations about the majority who deserve more credit than that.

"you're most of the way there, but miss the target. Prop 2.5 has only an indirect effect on individual taxpayers"

Nope, didn't miss it. I actually said that too! I wrote: However, prop 2.5 applies only to the town as a whole, and not to your individual house.

However, on a strange note, I agree with you. Complaining about local taxes is absurd.

MA sure is in a pickle on this high property tax- huge future pensions liabilities. Anyone looking at the current pay rates of MA state/ city workers will quickly realize that MA is no place to invest new capital. So the question is how do you get out of this mess? Notice how New Marcus blames 'powerful select groups' whatever that means and the Federal Gov. Maybe MA should just retake Maine and give it state employees instead of pensions. It worked once.
This is what you get with a one party system.

bv (#18) - I think people are complaining about local tax increases, and not (mostly) about local taxes per se. It sounds far from absurd to me. This is not exactly a tax free society as it is. We already pay our share. Am I supposed take as an article of faith that such increases are necessary, as opposed to being forced upon me as a result of local or state government inefficiency or incompetence? Nothing funny about that.

I notice a lot of the people (or the one) who are RENTERS are the ones saying that complaining about RE taxes is infantile. THAT argument is supposed to hold weight, when...you don't pay any?

#17(Newbie),
This post was about taxes and when you talk about taxes you have to talk about spending, thus it is not off-topic. The simple fact is that the salaries of the City of Boston are published in the Boston Globe. Do a search and check it out. Yes, there are many many cops and firefighters making over $100k/year and some making over $200k/year. And that's not even factoring in benefits which add at least 50% onto total compensation and is not taxed. The dirty secret is out thanks to the Freedom of Information act.

Factor in smoking and you'll see where the higher risk of lung cancer comes from. The job is so hard they need to retire early? This is something only someone with a cushy government job would say. I recently hurt my back and I crawled into work ever day under extreme pain as no work equals no pay for me and I'd probably lose my job. If I was a cop or a firefighter I would have gotten 3 months+ off with full pay. I can really feel their hardship of a three day work week.

Does the guy that moon lights at a mini-mart get hazard pay? Why not? It's more dangerous then being a cop or a firefighter. Because the guy doesn't work for the government.

There are two golden eggs in politics now: 1) corporate corruption and 2) government salaries/compensation. Politicians that can harness the anger of the electorate in these two issues will be successful. Just look at the comments section on any Boston Globe article about these two issues.

CambridgeLandlord - your argument is inane and incoherent. You take a few stats from a Globe (or more likely Herald) article written about state and municipal employees to insight those who are looking for a perceived easy target to blame for all that they think is wrong. Your assertions are ridiculous.

- Public employees salaries increasing faster than the rate of inflation - since when?
- Tax free benefits that add at least 50% onto total compensation - what?
- Some police officers do indeed earn over $100k per year. Did you happen to do any checking to see how much of that salary is from paid details? Did you happen to take a look at how much of that was paid for privately?
- Any idea how much time police and firefighters spend dealing with the absolute worst bottom feeders that society can produce?
- Working late at a mini mart is more dangerous that being a cop or a firefighter? Really?
- Envious of the 3 day work week, are you? Itching to work 3 24 hour shifts? Miss half your kids lives? Think it might be a kick to run INTO a building that's on fire?

To try to get back on point, taxes are not the problem. The inability to effectively use those funds wisely is. Instead of using our money more efficiently - and yes that means cuts when there's not enough revenue - the leadership in this state knows only one solution. Tax more - candy, soda, cigarettes, fuel, T fares/parking (which is a de facto tax increase). But that's not sustainable. The public seems to be reaching a point of critical mass on that.

To put a blanket over all government employees and blame them for misguided tax policies is mindless. It's called a risk return trade off. A public sector job offers much higher salaries than government jobs ever will, but the price for that is less security.

Want change, get involved.

the leadership in this state knows only one solution. Tax more

The pages of the Globe have been filled with spending cuts. Do I need to review them all here?

Look, not every public employee or public union is on the take. But you really don't advance your cause by acting like everybody is a saint, either. Plenty of firemen across American run into burning buildings. Not many of them claim that being forced to put down booze and crack pipes is a matter for negotiation that they deserve higher pay for. There are a lot of bad actors in government work in MA--a lot--and if public employees want more respect, they need to start cleaning up after their own.

Tax me: "I notice a lot of the people (or the one) who are RENTERS are the ones saying that complaining about RE taxes is infantile. THAT argument is supposed to hold weight, when...you don't pay any?"

I didn't use the word "infantile". While I did question whether people complain about their local taxes, I regret that statement. People should feel free and are free to complain as they see fit. However, I do believe that we get the most bang for our buck at the town level. Of my total tax bill each year (including ss, fed, state, local) I would estimate that local taxes are less than 15 %. That largely pays for almost every service which I value from fire to plowing to schools. At least in my town, I also see less waste than at the state and federal level. So, while we need to keep an eye on the town and make sure they spend wisely, I generally think that they are (or at least mine) does.

And yes, I pay every kind of tax that there is including property tax.

BV-
Check above, wasn't talking about you. Keep scrolling up up up.

Was referring to the blog bully who posts incessantly, at all hours of the day, and enjoys hurling insults at 'people' on the internet.

I thank you for regretting your statement however. I find it important for the blog bully to understand that while I personally pay a LOT in taxes, my home is basically self-sufficient- no sewer, no water, no trash, the occasional plow will roll through on my street once in a while (which is in need of repair due to A LOT of frost heaves and pot holes)

So I MUST ask the town- what am I getting for this money, what is my neighbor getting for his/her money. There's little to no crime in my town, yet the police are all driving around in very flashy cars, having a new police station built, etc.
The bottom line is this: Quid Pro Quo. I pay a lot in taxes- fix my road. I pay a lot in taxes, come GET my trash instead of charging me another $500/year for me to drive garbage to my transfer station.

I chose to live out 'in the woods' in a nice sleepy town, but since I live in the woods, and pay a lot in taxes, I better see some results.

So yes, I can complain and it's not infantile, because I pay.
Renters- Shaddup.

#23(jbone), you put out the myth that the points I made are incorrect. Well, in the internet era anybody can use Google to find out that I am correct and you are wrong. All City of Boston salaries were published by the Boston Globe. You can search for the highest paid and the lowest paid salaries. I think they may have done state salaries as well. It is shocking how much police and firefighters are making. Most of us would take three 24 hour shifts no problem. Why because most of us are working 60+ hours a week and don't get paid to sleep like firemen. And we don't have some cushy retirement package to look forward to on our 50th birthday.

Simple fact is that being a Boston firefighter/cop is not a dangerous job when compared to working at the quickie mart or driving a delivery truck.

This is relevant because these unaffordable salaries are exactly what make our property taxes unaffordable.