There is a very good article outlining some of the issues with respect to property taxes and local budgets.
One of things that is happening is that in some areas, because tax assessments lag property increases and declines, people are still seeing their property taxes going up while they see their equity going down.
This is going to hurt -- state and local property taxes increased 50% from 2000-2006. So now beginning the battle of how to deal with the bleeding local budgets.
I get so sick of the constant downloading of costs and tax burden from age to youth, and I don't see Florida's plan as anything but lets-just-head-our-young-people-over-the- head-with-a-2-by-4, again. They are still getting up.
Florida has a plan that strong favors longtime homeowners over new buyers and part-time residents. The part time residents are probably not youth, but targeting new buyers hits up younger home owners. There is no justification for a discriminatory tax policy.
And what of new buyers who aren't younger. Well, if I was looking to buy in Florida right now, and I have definitely considered the idea of retiring to some place warmer, my thoughts are if you expect me to carry a bigger tax burden you are nuts. You already have droves leaving because of the high cost. So, they have all those places that need to be sold and they are sticking it to new buyers that might help to bail them out. Good plan...
I have thought through how my local government responded to trying to manage budgets. Those development taxes are an enormous steal from young people for older people taxes. It probably isn't younger people buying the new homes, but a new home that is priced $50k higher to pay development taxes increases the price of all homes. So, those buying the new homes get to charge more relative to the market and the vast majority of the development taxes are passed on by inflated home prices. They the person entering the market is the hardest hit by it. Well, that is assuming you don't have the crazy speculation and housing is priced fair for the costs. So, we end up with young people saddled with an extra $50k of mortgage debt when the fair thing would be for everyone to pay an extra few hundred on their taxes each year and give young people the same opportunity older people had.
The article estimates that falling real estate prices will reduce property values by $1.2 trillion dollars, and that will be a lot of local tax revenue lost and the end of piggy backing on increasing equity to increase taxes.
Looks like those infrastructure replacement plans are going to be delayed...