States try to ease property-tax rise
Faced with revolts by homeowners, legislatures from Maine to Nevada are coming up with possible fixes.
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Right after it was finished in 1989, the Harris house was assessed at about $400,000. Today, the assessor says it's worth $1.2 to $1.3 million. His property taxes have climbed from $2,200 per year in 1990 to $12,000 today.Skip to next paragraph
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Incline's predicament, combined with other warnings about people being forced out of their homes, helped precipitate the Nevada legislation. Now, an interim committee is studying a constitutional amendment to change the way property taxes are figured. Yet another Nevada legislator is introducing an amendment similar to California's Proposition 13. "This is all pretty exciting," says Mr. Harris. "And I may have been the spark that started this revolution."
In Maine, the spark has come from an unusual alliance: the Teachers Association and the Municipal Association, which represents municipalities. The alliance had one goal: to get the state to pay a larger share of the cost of education. If it could get that to happen, then property taxes could possibly come down.
This year, there will be scattered property-tax relief of between 3 to 5 percent as the state starts to pick up a larger share of education costs. "There has been some talk of a constitutional amendment, maybe going away from an ad valorem tax," says Michael Starn, communications director at the Municipal Association.
Last year, an attempt at a Proposition 13 type of tax cap failed. But this fall, Maine residents will vote on whether to give special tax relief to working waterfront property - a benefit to fishing interests.
Voters elsewhere are also hoping to spur changes. That's what is happening in New Jersey, where a grass-roots effort to force a constitutional convention to reform property taxes is now under consideration in the State House. "If it's not signed by the governor by July 31, the convention will not be on the ballot, and I think the issue will die," says Cy Thannikary, founder of Citizens for Property Tax Reform, a group that wants property taxes to be based on the ability to pay, not the size of the house. To get across his point, his group and others will be holding a "tea party" in Trenton on June 16.
Almost every candidate running for governor in the Garden State has a stand on the issue. Last week, Sen. Jon Corzine, the front-running Democratic candidate, announced his support for the convention and for lowering property taxes.
So far, 123 property-tax relief bills have been introduced in Trenton. However, Mr. Thannikary says that leaving it to the politicians means "it will never get done."
Proponents of capping property taxes point out that the additional taxes also mean there will be fewer dollars to be spent on local businesses. For example, Al Aitken, founder of VOTORS (Virginians Over-Taxed on Residences), estimates his tax burden has increased by 45 percent, at the same time he has taken a 40 percent pay and benefits cut as a pilot at American Airlines.
"I needed to look at my personal areas and find areas to cut back," he says. "So I have cut back on dry-cleaning my uniforms, which is costing my local merchant $1,000 a year in business."
Even in states where there are no organized groups, property owners are angry. In Highland, N.Y, Tim Woods, owner of Highland Manor Bed & Breakfast, saw his property taxes go up by 33 percent. On Grievance Day, he says the line at the town hall stretched past the door as residents complained - mostly to no avail. "No one escaped it," he says.
• Alexandra Marks contributed to this report.