Property Tax Revolt

The Wall Street Journal reports:

Arizona has been hit hard hit by the real-estate bust, with the average home value down 17% in a year and a record number of foreclosures. So Democratic Governor Janet Napolitano has devised a clever way to revive the housing market: Raise property taxes.

Last week Ms. Napolitano vetoed a bill that would have made a two-year suspension of the state property tax permanent. "It's untimely. It's untenable. It's unwise," she said of her untimely and unwise veto. So as housing values slide, Arizonans next year will get walloped with an extra $250 million property tax bill.


Arizona is one of a growing list of states and big cities looking to raise taxes on homes to close budget gaps in 2008 and 2009. Housing values are expected to decline by $1.2 trillion this year, according to Global Insight Inc., an economic consulting firm, and that means tens of billions of dollars in lost taxes.

In recent weeks, Fairfax County in northern Virginia, Washington state, Chicago and Memphis have announced proposals to increase residential property tax rates to offset declining revenues. So at the very time that states and cities are begging for money from Washington to help distressed homeowners pay their mortgages, property tax hikes could push hundreds of thousands of homeowners under water.

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