For Immediate Release
Contact: Anthony Flint 617-661-3016 x116
NASHVILLE (September 25, 2008) – The co-author of a report by the Lincoln Institute of Land Policy on significant flaws in property tax assessment limits presented the findings at the 28th annual National Conference of State Tax Judges.
Mark Haveman, co-author with Terri Sexton of Property Tax Assessment Limits: Lessons from Thirty Years of Experience (44 pages; ISBN 978-1-55844-167-5), detailed for the conference participants the ways that measures such as California’s Proposition 13 result in higher taxes for some, distortions in taxpayer decision-making, and reduced household mobility.
“Whether it is in times of home-value appreciation or precipitous decline, as we are witnessing today, assessment limitations create property tax relief that is often at best temporary and at worst imaginary,” said Haveman, a research fellow at the Lincoln Institute and executive director of the Minnesota Taxpayers Association,
The report, available for free downloading at www.lincolninst.edu, is the latest Policy Focus Report published by the Lincoln Institute of Land Policy, a think tank near Harvard Square in Cambridge, Mass. Property Tax Assessment Limits: Lessons from Thirty Years of Experience comes on the 30th anniversary of the passage of Proposition 13 in California, and as some other states roiled by complaints about the property tax – including Florida, Georgia, Idaho, Massachusetts, Nevada, New Hampshire, New York, and Pennsylvania -- consider similar limitation measures.
“Severing the connection between property values and property taxes creates a new set of problems,” said Joan Youngman, senior fellow and chair of the Department of Valuation and Taxation at the Lincoln Institute. “It can result in different tax bills for identical homes. Families may be reluctant to move – even if they need more space or would like to be closer to work – if a tax based on acquisition value will rise dramatically with a change of ownership. And it undermines the transparency and accountability of the property tax system as a whole.”
The National Conference of State Tax Judges is an independent educational and professional organization of state tax judges and members of tax appeal tribunals that has met annually since 1980 for presentations on tax law, valuation, finance, economics, and tax policy. The three-day conference is usually held in September and alternates between Cambridge, Massachusetts, and other locations throughout the United States. Two days of the conference address property taxation, valuation, court administration, ethical issues, and other points of general interest. A third day is devoted to state tax questions involving sales and income taxes.
Participants discuss recent tax developments in their states, including judicial decisions in their jurisdictions, new or proposed statutes of significance, and procedural innovations. Recent meetings have featured presentations by national specialists on such topics as the valuation of special-purpose property, exemptions and abatements, taxation of public utility property, sales taxation of remote vendors and electronic commerce, and taxation of special industries such as hospitals and health care organizations.
The presentation of Property Tax Assessment Limits: Lessons from Thirty Years of Experience was set to be held at the Sheraton Nashville Downtown, 623 Union Street, Nashville, in Davidson Room from 12:30-2 p.m.
The report examines the results of the use of assessed property value limitations over the 30 years since the passage of Proposition 13. Among the issues Haveman noted were higher taxes for some of the homeowners who had been promised relief, limited benefits for homeowners in neighborhoods with where values are stagnant or declining, and instances of rates increasing to make up for a diminished tax base.
“These limits are among the least effective, least equitable, and least efficient strategies available for providing property tax relief,” Haveman said.
Alternatives from the report include:
• Circuit breaker programs that target assistance to those whose tax liabilities are out of proportion to their ability to pay.
• Truth in taxation measures to combat so-called “invisible” tax increases that occur when property values rise but nominal tax rates stay the same.
• Deferral options allow qualified taxpayers to delay property tax payments and remain in their homes.
• Exemptions on owner-occupied or homestead properties and classified tax rates that benefit residential taxpayers without distorting the market value tax base.
About the authors
Mark Haveman is executive director of the Minnesota Taxpayers Association, an independent, non-partisan research, education and advocacy organization dedicated to promoting good government and sound tax policy. He is co-author of the association’s 50 State Property Tax Comparison Study – an annual state ranking of residential and business property tax burdens. The report’s co-author, Terri A. Sexton, is professor of economics at California State University at Sacramento, and associate director of the Center for State and Local Taxation at the University of California at Davis.
About the Lincoln Institute
Founded in 1974, the Lincoln Institute of Land Policy is a leading resource for key issues concerning the use, regulation, and taxation of land. The Lincoln Institute conducts research, holds conferences, provides education and training, undertakes policy evaluations, and publishes books and reports to improve the quality of public debate and decisions in land policy.
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