Housing Downturn Takes Toll on Cities’ Revenue

The New York Times reports:

Suddenly everyone wants more from Chicago’s taxpayers.


Mayor Richard M. Daley asked last week for a 15 percent jump in the property tax. Todd H. Stroger, the president of Cook County’s board, called on Wednesday for increases in sales, gasoline and parking taxes. And all that does not even begin to address ways of keeping the financially troubled bus and train systems running.

While Chicago’s case may be extreme, it is by no means unique. Across the country, local governments are feeling a financial strain driven largely by the nation’s real estate downturn. City finance officers predict slowing revenue even as they remain under pressure to keep spending, especially in areas like health care and pensions, according to an annual survey by the National League of Cities.

To handle budget deficits they now expect, many cities are increasing fees for services, and some are considering raising property taxes, said the report, to be released Thursday.

“We know what’s coming here,” said one author, Christopher W. Hoene, director of policy and research for the National League of Cities. “If the housing market continues to flatten out or even decline, we’re in for some tough times for cities.”

The signs are all around, in flattening property assessments (which mean flattening property tax revenue) as well as rising mortgage foreclosures, which also bode poorly for revenue collections.

You get a glimpse off who wants higher and higher real estate prices.The problem is: it's not reality.