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What's Up With Property Taxes


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Catherine Collins, associate director and senior research associate of the George Washington Institute of Public Policy, discusses property tax issues including tax base erosion and green property tax incentives.

Published in: Government & Nonprofit
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What's Up With Property Taxes

  1. 1. What’s Up With Property Taxes Critical Issues for the Fiscal Health of New England Cities and Towns Lincoln Institute of Land Policy Catherine Collins December 1, 2016
  2. 2. Property Tax Revenues Held Up 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Growth of Local Property Tax Collections in US and New England 2005-2013 Growth in US Growth in New England
  3. 3. Tax Base Still Below Peak 1,450 1,500 1,550 1,600 1,650 1,700 1,750 1,800 1,850 1,900 1,950 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 BillionDollars New England Total Assessed Value Assessed Value
  4. 4. While Still Important There are Limits • Both New York and New Jersey added new property tax limits since the recession • Pennsylvania added levy limit in addition to earlier rate cap • Since the recession, more localities are facing ceiling limits in Massachusetts • Flat rates of growth or inflation based pose different problems
  5. 5. Low Inflation-Good News Bad News • Tax limits adjusted to changes in CPI can be difficult to manage – New York’s new levy growth ranged from 2% in the first year 2013 to just 0.68% for 2017 – Florida’s baseline growth for assessments ratchet down • For relief programs, some programs suspended any CPI growth as budget-saving measures • Growth of homestead exemptions adjusted for inflation slowed
  6. 6. Ways States Have Stressed Localities • Expanding exemptions for veterans,first responders, and surviving spouses—generally at local option but at local cost • Making adjustments to those incentives that are paid for by the state, reducing the relief and saving state revenues • Changing the earmarking of revenues
  7. 7. The Shrinking Base • Eliminating Taxable Personal Property – New England’s use of Personal Property – States that are eliminating the tax • Expanding economic development programs • Assessing Big Box Stores as Dark Stores
  8. 8. Non-Profit Tax Exemption • Treatment of non-profit organizations for chartable purposes – Mandatory, by application, by legislation • Voluntary Payments in Lieu of Taxes • Settlement of taxpayer challenges to exemption • Tightening the definition of non-profit
  9. 9. Coping with Extreme Weather
  10. 10. Policies Help or Hinder • Aftermath of Sandy to rebuild and reassess • Addressing potential losses from rising sea level • Protecting vulnerable areas – Loss of preferential treatment if violating water quality requirements – Treatment of “conservation” lands and easements
  11. 11. Other Environmental Taxes • San Francisco Bay area– approved a parcel tax to protect wetlands • Maryland “rain tax” repealed as state mandate but continues to be imposed at local level using various policies • Banning single use plastic bags • Missouri continued sales tax dedicated to soil and water conservation and state parks
  12. 12. The Many Colors of “Green”
  13. 13. Wide Use of Green Property Tax Incentives
  14. 14. Utility and Residential Solar Use Increase 15
  15. 15. Renewables Raise Property Tax Issues • What happens when the facility—solar or wind, is located on farm land that enjoys current use status? • How are solar panels taxed when owned or leased by property owner? • Does selling “excess” energy back to grid affect the taxation of the renewable facility? • Does selling back to grid make user a utility?
  16. 16. Forgiven But Can’t Be Forgotten
  17. 17. What’s This GASB Rule 77 All About • New reporting requirements – Different from Tax Expenditure Budgets • New York City first to report • What does it mean • How much does it represent
  18. 18. Thanks And Thanks to Jack Warner