The Lincoln Institute of Land Policy released the annual 50-State Property Tax Comparison Study, a comprehensive analysis of effective property tax rates in each state's largest city, one rural area in each state, and the District of Columbia. The study, produced in partnership with the Minnesota Center for Fiscal Excellence, tracks the property tax as the primary revenue source to fund local government to provide basic services. The Northeast and Midwest generally have higher property tax burdens as compared to the West and Southwest. In part because the study measures effective property tax rates – that is, the actual tax payment as a percentage of market value – many struggling post-industrial cities, where property values have dropped, show up at the top of the rankings. "The property tax remains the foundation of sound municipal fiscal health," said George W. "Mac" McCarthy, president of the Lincoln Institute. Cities such as Detroit are working hard to make adjustments in valuations to bring balance back to this essential covenant, McCarthy said. Bridgeport, Connecticut continues to impose the highest taxes on homes worth $150,000 to $300,000, followed by Detroit, Aurora, Ill., Newark, and Milwaukee. Cities with the lowest effective residential property tax rates include Denver, Birmingham, Washington D.C., Honolulu, and Boston Cities with the highest apartment property tax rates – in contrast to "homestead" or owner-occupied housing – include New York, Detroit, Des Moines, Aurora, and Bridgeport. The lowest in the rankings are Salt Lake City, Washington, D.C., Denver, Cheyenne, and Honolulu. In terms of commercial property taxes, cities with the highest effective commercial rates include Detroit, New York, Chicago, Providence, Des Moines, and Bridgeport. The lowest taxes can be found in Wilmington, Del., Virginia Beach, Seattle, Honolulu, and Cheyenne. Cities with the highest apartment property tax rates – in contrast to "homestead" or owner-occupied housing – include New York, Detroit, Des Moines, Aurora, and Bridgeport. The lowest in the rankings are Salt Lake City, Washington, D.C., Denver, Cheyenne, and Honolulu.
In terms of commercial property taxes, cities with the highest effective commercial rates include Detroit, New York, Chicago, Providence, Des Moines, and Bridgeport. The lowest taxes can be found in Wilmington, Del., Virginia Beach, Seattle, Honolulu, and Cheyenne. Cities with the highest industrial property taxes are Columbia, South Carolina., Memphis, Jackson, Miss., and Houston. Cities with the lowest industrial property taxes are Cheyenne, Wilmington, Honolulu, and Virginia Beach. The study is most useful when analyzed alongside other information about state and local tax structures, said Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence. Some jurisdictions are more dependent on the property tax and have limited alternative options; some have higher income and sales taxes to finance a greater share of the cost of local government. There are also many policies to redistribute property tax burdens across the classes of property through exemptions, differential assessment rates, or other classification schemes. Other highlights: Median-valued homes (urban)
The study can be used for further research on the dynamic impacts of property taxation, such as the extent to which commercial or industrial tax rates have an influence on locational decisions of businesses, or the relationship between tax rates and the proportion of untaxed or untaxable land in cities. The Lincoln Institute of Land Policy is the leading resource for key issues concerning the use, regulation, and taxation of land. Providing high-quality education and research, the Lincoln Institute strives to improve public dialogue and decisions about land policy. The Minnesota Center for Fiscal Excellence was founded in 1926 to promote sound tax policy, efficient spending, and accountable government. As a non-profit, non-partisan group supported by membership dues, the center pursues its mission by educating and informing Minnesotans about sound fiscal policy; providing state and local policy makers with objective, non-partisan research about the impacts of tax and spending policies; and advocating for the adoption of policies reflecting principles of fiscal excellence. |
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