How other states handle property taxes

The Atlanta Journal-Constitution

South Carolina

In 2006, the state enacted a fundamental change in its tax laws, cutting out school taxes for most homeowners and raising the statewide sales tax to make up for the lost school taxes. It also set up caps that limited tax increases on longtime property owners. But when such a house is sold, the tax appraisal immediately goes up to match the new value. Real estate agents say the new system is costing them sales, and state lawmakers are considering changes.

Florida

In a state that has no income tax, property taxes are critical. Gov. Charlie Crist promised two years ago that the wildly unpopular property tax would “drop like a rock” if voters approved Amendment 1, a major tax-reform referendum. Amendment 1 passed, and tax collections have dropped like a rock — in part because of the promised tax cut, but mostly because of the crash in real estate. The state’s reforms didn’t anticipate the real estate collapse. Because of it, many homeowners are finding that their properties’ appraised value exceeds the market value.

Michigan

Michigan legislators decided in 1993 that the state would no longer use local property taxes to pay for public schools. The new funding scheme would centralize school funding with the state government. To pay for the plan, voters in 1994 were given the choice of whether to raise sales taxes from 4 percent to 6 percent or income taxes from 4.4 percent to 6 percent. They chose sales taxes. Fifteen years later, proponents say there is a more equitable distribution of school funds; critics say the system has failed and 95 percent of school districts are worse off.

California

Thirty-one years ago, voters passed Proposition 13, which limited the state’s property tax to 1 percent of the property’s value. The home’s assessed value can’t increase by more than 2 percent per year until it is resold, whereupon the assessed value is reset at the sale price. Prop 13 also required that legislators have a two-thirds majority to pass any new tax. The proposition’s supporters say it has done a terrific job of containing property taxes. Its critics say it also undermined local schools and local governments.

Maryland

In Georgia, the bad news on property taxes comes from your county. In Maryland, the state handles assessments and appeals. Your first appeal hearing is at “supervisor level,” where you get about 15 minutes to make your case. This is similar to Georgia’s system. Also as in Georgia, the next stop is a panel of citizens in your community. In Georgia we call it a Board of Equalization; in Maryland, it’s a Property Tax Assessment Appeal Board. The last resort in Georgia is Superior Court, but Maryland has the Maryland Tax Court, an administrative court appointed by the governor. If you’re still not happy after appealing there, you can appeal to the regular judiciary system.

New Jersey

The Garden State charges more in property taxes than any other state, several studies have concluded. The nonpartisan Tax Foundation, in a chart of property tax collections per capita in 2007, lists New Jersey No. 1 at $2,485. Georgia came in 32nd at $1,010. On average, property owners in New Jersey spend 6.75 percent of their annual income on property taxes — more than in any other state, according to a comparison done by MSN using census data in 2007. The figure for property owners in Georgia was 1.82 percent of income.