Governor seeks support for property tax plan

DES MOINES, Iowa (AP) — Gov. Terry Branstad says that without passage of his property tax plan, residents could see big increases to their tax bills. But a Democratic lawmaker questions the argument. Branstad, a Republican, on Monday touted his property tax plan, which would gradually reduce taxable assessments for commercial property owners. Branstad says his plan would also limit the amount residential property values could grow, restricting how much those bills could climb. Branstad unveiled a website with estimates on how much tax bills would rise without passage of his proposal. The House has approved Branstad's proposal, but the Senate supports an alternate plan. Democratic Sen. Joe Bolkcom, of Iowa City, says Branstad is making a "straw argument." He notes that local government set tax rates, which can be adjusted if values go up.

Property tax rate to increase as property values drop

Property taxes are due on May 1, and Yuma County wants taxpayers to understand the process. In order to keep next year's levies at the same level as this year's, the rate will have to increase to keep up with another drop in property values. In other words, according to information from Yuma County: • To collect the same $22.3 million amount in primary property taxes, Yuma County would need to adjust the primary tax rate from $1.87 to $2.06. • The qualifying tax rate for high school districts, which is based annually on statewide assessed values, will climb from $1.98 to $2.12. • The state equalization rate, which ensures equal resources for all schools, will climb from 42 cents to 51 cents. The county says the median sale prices for local homes is on the rise and that the housing market started to rebound last year. However, there is a two-year lag between market conditions and the application of those conditions on the next assessed value of property. This means that net assessed values for property taxes should see a leveling off or increase in tax year 2014. The tax process starts with the county assessor, who determines the value of property generally based on real estate market activity. Then municipalities estimate a budget for the coming fiscal year. For school districts, local taxpayer contribution varies with the amount of funding provided by the state general fund – when the state funds less, local taxpayers take up the slack. The county superintendent of schools reviews the school districts' proposed budgets. Taxing authorities hold public hearings over the summer to take taxpayer input. Tax rates are adopted by the board of supervisors for county taxing authorities and school districts. The amount of any given bill depends on the assessed value of the property and the combined tax rate, which can vary by geographic location (for example, what school district the property is located within). When taxes come due, the county treasurer collects. Nov. 1 and May 1 are the semi-annual due dates. A tri-fold brochure explaining the process is available on the county website at www.yumacountyaz.gov/taxpage.

Legislature wants ballots to detail tax increases

PHOENIX (AP) — A bill requiring ballots for municipal and county bond elections to contain details of the debt and how they'll increase property taxes has passed the Arizona House. Senate Bill 1371 also requires similar disclosures for local sales tax increases. The Republican-controlled House passed the bill Monday on a 34-22 party-line vote. It previously passed the Senate but will return there for another vote because of a House amendment. The bill is designed to let voters know how much debt municipalities are taking on and how that will impact their taxes. For a bond election, the ballot must include an estimate of the amount of property taxes needed to pay the bond debt and the amount a $100,000 home's property taxes would increase. Read more: http://www.sfgate.com/news/article/Legislature-wants-ballots-to-detail-tax-increases-4454517.php#ixzz2RNmMckC0

The real estate recovery has yet to lift the property tax revenues

The real estate recovery has yet to lift the property tax revenues of many U.S. cities, a worrying sign for municipalities that rely on the taxes as their chief sources of income, according to a report released on Thursday. In a survey of local economic conditions, the National League of Cities found that residential property vacancies and values are "still a problem" for more than half of U.S. cities. Officials in 65 percent of the cities consider commercial property vacancies a problem, and those in 57 percent say commercial property values are still a concern. "Although generally positive, the slow rebound in the real estate market is a compounded problem for local governments because of the lag between economic cycles and local property tax collections," said Christiana McFarland, director of the league's research department, who conducted the study. "This lag can last 18 months to two years -- meaning that real estate market improvements take time to register in local budgets." "We anticipate continued decline in 2013 property taxes as collections continue to catch up with market conditions," she added. Most cities do not frequently assess the values of homes and land to determine the taxes that owners must pay. Some can take three years to re-assess real estate values. The bursting of the housing bubble, for example, took two years to show up in property tax collections. Of late, demand for houses has risen so sharply that economists and real estate agents are worried about a supply squeeze, with areas such as Washington, D.C., and New York experiencing acute inventory crunches. Even so, in the fourth quarter of 2012, property tax revenue totaled $177.6 billion, "not statistically different from the same-quarter 2011 property tax revenue of $177.4 billion," the U.S. Census said last week. Local governments collected 97.7 percent of the property taxes. "Challenges in the commercial property market have been overshadowed by improvements in the housing market and are likely the result of slow job recovery and decreased demand for space," said McFarland. "We anticipate hearing more about commercial property in the months to come." Cities are also nervous that a new surge in consumer confidence that has helped local sales tax collections will not last -- 55 percent of those surveyed said that retail sector health "continues to be problematic for their communities." Meanwhile, local income taxes "have remained fairly flat in recent years, evidence of a national recovery characterized by slow income and job growth," the survey found. For most, though, business growth is improving or it has ceased to be a threat to cities' budgets. "Although there continues to be significant barriers to across-the-board economic growth, a tenuous recovery is taking hold," the survey found. "The increasing confidence of local officials can be seen in their anticipated spending and investment activities." According to the survey, more than one in two city officials anticipate increasing investments in 2013 in new infrastructure and capital projects and maintenance of existing infrastructure and capital. Officials also say they are still pressed to spend on emergency services. The survey found that more than three years since the recession's end, requests for aid have not abated. "Demand for basic survival services such as food, heat and clothing is a widespread concern, with one in two city officials reporting that it is a problem in their communities," the survey found. "One in four city officials report that this condition has actually worsened over the past year."

Property tax bills may be sent out electronically

SAN DIEGO, CA -- Riverside County residents have the option of paying their property-tax bills online. By late next year, they may also be able to elect to receive their bills electronically, as opposed to through the mail. That's something Supervisor Jeff Stone of Temecula wants the county to offer as a convenience to Riverside County's 900,000 property owners. “We’re in the new electronic age," Stone said, during last Tuesday's Board of Supervisors meeting. "I don’t know if we’re pre-empted by state law, but, with future tax bills, it would be nice if we had a place on the tax bill that’s mailed out that a prospective taxpayer can actually sign, to receive their tax bill electronically.” Stone also touted the notion of sending tax bills out via email as a cost-saving strategy for a county that has seen annual revenue plummet by more than $200 million a year since last decade's housing collapse. “That might save this county hundreds of thousands of dollars in postage every year,” he said. Treasurer-Tax Collector Don Kent said his department already is working on it. “That’s being incorporated into our new property tax system," Kent said in a telephone interview lasts week. "It’s in development right now.” Kent said the "ebilling" option -- as it is being called -- could debut as early as October 2014. The treasurer-tax collector office routinely sends out bills in the fall for taxes due in two installments, in December and in April. Kent said the county spends about 67 cents on postage and printing per bill. He said the cost was $575,000 in fiscal year 2011-12, which ended last July. Kent said the county could begin to eliminate a portion of the postage expense as it rolls out a comprehensive $16 million upgrade to its outdated computer system for processing property assessments. That project has been dubbed CREST, which stands for County of Riverside Enterprise Solutions for property Taxation. It is replacing 40-year-old technology. Kent said the county is in its fourth year of the upgrade, and the first phase of the new system may be unveiled next year. He said the county is aiming at that time to launch ebilling, which will mean notifying people via email and possibly through some sort of Internet subscription. Even if the October 2014 target is met, though, county officials do not anticipate a flood of people taking them up on the offer. At the outset, Kent said, only a few thousand owners are expected to opt in. "Just like anything that's new, it will take years to build up momentum to get people off of the tax bill in print,” he said. “Some people don’t even have a computer. Some people may not do anything online; they may not feel comfortable with that.” Others may choose to receive bills by email, then change email addresses without notifying the county. “That’s part of the challenge in the digital world versus the paper document," Kent said. "Those are all things we have to keep in mind as we move into this arena.” At the other end of the process, property owners have had the option of paying taxes online since 2000 -- initially by electronic check only, and later by credit card, too, Kent said. Last year, more than 125,000 paid online. In fiscal 2011-12, he said, there were 78,596 electronic check transactions and 48,633 online credit card payments. "Certainly the potential is there for savings," Kent said. “But the savings won’t be realized until many years down the road. ... Nevertheless, we’re absolutely on board with saving money wherever we can.”