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Property taxes haven’t been raised fast enough by many local governments, who are now feeling the squeeze in their budgets. Property tax revenues have decreased for two consecutive quarters, which hasn’t happened since 1963, according to the Census Bureau.
In general, property taxes bring in more than a quarter of local government revenue. But with a drop in the assessed values of homes, property taxes have been on the decline and are starting to hamper local governments’ budgets.
Many local governments have been unable or unwilling to raise property taxes at a time when many home owners have seen a decrease in their home values. Some local governments also have been prevented from raising rates fast enough due to statutory property tax caps or heavy resistance in their communities to higher property tax rates.