Thursday, December 04, 2008

Property-Tax Collections Climb as Home Prices Fall

From USA

Property taxes are rising across the USA despite the steepest drop in home values since the Great Depression.

Home values dropped 17% in the third quarter compared with the same period in 2007, reports the S&P/Case-Shiller Home Price Index. At the same time, property tax collections across the USA rose 3.1%, according to the U.S. Bureau of Economic Analysis.

State and local governments are on track to collect more than $400 billion in property taxes this year, the most ever. One reason: Laws in most states that prevent big tax hikes when property values soar also block big tax drops when values sink.

The housing market collapse has caused a recession that's hurt sales and income tax collections.

But property taxes — collected mostly for public schools — have escaped serious damage. As a result, public education is one of the few sectors of the economy still adding jobs.

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