March 12 (Bloomberg) -- Americans battered by the biggest slump in home prices on record are facing higher property taxes as local governments struggle to plug budget deficits.
Municipal finance officers budgeted for a 3.6 percent drop in revenue from residential taxes this fiscal year, a survey by the U.S. League of Cities in September shows. With home prices down 12.4 percent in the fourth quarter from a year earlier, the most ever for an index compiled by the National Association of Realtors, cities and counties are compensating with higher tax rates or appraisals, even where laws cap property-tax growth.
“The value you pay your taxes on went up while market value went down on half our properties,” said Chris Jones, the appraiser for Escambia County in Florida’s northwest tip. “Try to explain that to a homeowner.”
Cities and towns need to raise rates after their main sources of income -- sales, income and property taxes -- declined together in 2008 for the first time in 12 years, the League of Cities survey said. Higher costs may strap consumers who’ve cut spending in six of the last seven months, the Commerce Department’s Personal Consumption Index shows.
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