Study Shows Spending the Source of High Property Taxes
A recently released study by Americans for Tax Reform shows how local spending decisions are what really drives increases in property taxes.
Across the country, taxpayers are opening their mailboxes to find substantial increases in their evergrowing property tax bills. Thanks to the strong housing market and an insatiable desire of local officials to spend taxpayer money, the rising property tax burden is the most pressing issue facing state and local governments. Although more than 40 states have property tax limits of some kind, ineffective policies and multiplying loopholes have contributed to the rising pressure on taxpayers.
Over the past twenty five years, local property tax collections have exceeded population and inflation growth by 55 percent, or roughly 2 percent per year. These continual increases in local property taxes above the rate of population and inflation are squeezing homeowners and reducing economic growth.
This latter is clearly the case in Hawaii. The study compares two state programs, one that reduced property taxes and one that increased them. It then gives examples on how other states reduced property taxes. That is not to say the same solutions would work in Hawaii but it is clear that something needs to be done.
Full report here. (pdf)