From facebook, Congressman Dusty Johnson is offering his property tax relief plan, focusing on directing the relief towards owner-occupied properties. (as opposed to giving Ted Turner a tax break).
Off the cuff cliff notes are that the plan includes:
– Annual $400 property tax credit for owner-occupied homeowners
– No property taxes for first-time homebuyers for the first two years.
What do you think? Is this more realistic than just ending property taxes with no details on how to replace the revenue or cut spending?
Is there plans to step up the $400, or is it just that forever regardless of inflation or skyrocketing assessments? It’s something but doesn’t address the underlying issue. And in two years when property taxes hit the first time homebuyers, you are going to see some foreclosures.
Restricting the credit to owner-occupied properties only is smart. Offsetting property taxes with sales taxes, at least as our state currently operates is just swapping a more relatively stable revenue source for a less stable one. It better addresses the property tax than anything else put out so far, but introducing more fiscal risk (sales taxes rise and fall with economic trends) isn’t something to easily dismiss. Maintaining basic infrastructure is as or more important in a down economy than in a booming one. Hard to bring economic activity up when your main arterial highways can’t efficiently get goods from points A to B.
The cut hits the revenue source for schools and counties and then routes proportionally more funding through the state to those entities (which typically means more formulas if past practice is any indication). Technically speaking, we couldn’t afford the .3% change to begin with (hence our inability to meet our own cola obligations to state employees and schools in the Rhoden budget), so we’re just shuffling around money without addressing the shortfall nor taking ownership of where cuts need to happen.
The two-year tax freeze is a bit worrying as it’s using property taxes into backdoor an adjustable-rate mortgage/escrow payment. Having lived through the last several recessions I can’t see how anyone thinks pushing more adjustable teaser-rate anything onto the general public (particularly lower-income, younger folks) is anywhere close to promoting general fiscal responsibility. If history is any clue as to how this plays out with real-world marketing and consumer behavior, we’d be deliberately creating a short-term housing bubble.
Homeowner credit a good start, biggest worry is the alternatives to this are so bad we jump on the bandwagon without fully vetting how all of this proposal trickles out. It’s some obvious short-term relief, but the trade-off is back end uncertainty and future problems. Good politics; dubious policy.
The need for property tax reform is not uniform. For doctors, lawyers, professionals and most business owners, property tax is an inconvenience but not a threat to their lives. Property tax is built into rents, but renters are generally ignored. The people for whom property taxes are a problem are the lower middle class who bought as much house as they can afford and significant increases in costs, along with increases in food, clothing and other goods means they struggle. Property tax relief is expensive and needs to be focused on where it is most needed.
There should be zero property tax assessed on the first acre of owner occupied housing.