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Archive for Monday, November 24, 2008

Decline in valuation undermines tax base

November 24, 2008

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Declining property values may create an ugly scenario for taxpayers when local governments begin preparing next year’s budgets.

Douglas County Appraiser Marion Johnson said the drop in real estate values makes it likely the county’s overall assessed value — the tax base used for determining how much people pay in property taxes — will decline.

If that drop does happen, taxpayers likely will see either a reduction in government services or the unpleasant prospect of paying a higher property tax rate on a home that is worth less money.

“As tough as the 2009 budget was, I think putting together the 2010 budget may be even tougher,” City Commissioner Rob Chestnut said.

How local government leaders will react to a decline isn’t known, in part, because no one can recall Douglas County ever experiencing a contraction in its tax base.

A quick search of county records shows that it has not happened in at least the last 25 years.

With existing home prices expected to drop by 2 percent to 5 percent, the only way for the overall property tax base to grow is through new construction. That’s still an outside possibility in some areas. In Lawrence, builders have started about $130 million worth of projects through the first 10 months of the year. Large construction projects such as Wal-Mart, the Oread hotel and several apartment complexes have led the way.

But the bread and butter of the Lawrence construction industry — single family home construction — has been abysmal. Just 94 new single-family homes have been built through October. Traditionally, Lawrence has built more than 300 new homes a year.

“We’re not really replacing the loss in value with new construction,” Johnson said. “I would say assessed values are at best going to be level, but in all likelihood they are going to see declining assessed values.”

Comments

igby 5 years, 10 months ago

Reality check!Stop counting.

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Chris Ogle 5 years, 10 months ago

Douglas County tax base is falling like a rock, and taxpayers can't afford another mill levy increase. What to do.... I have an idea. Why don't they live with what they have.... That is what the rest of us do.

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headdoctor 5 years, 10 months ago

After looking over my valuation statements and talking to a few others, it doesn't look like the property tax man is going to have to moan about tax base to much next year. They raised the values enough this year to compensate for next year. Tax base, mill levy, and budget is just the game they play to comply with state regulations. It doesn't matter because the figures get adjusted to the amount required for the various budgets that make up the total spending.

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wysiwyg69 5 years, 10 months ago

How about people with these credit cards with huge debts be accountable for their own greed and or ignorance. Just because a bank offers you a credit card, do you not have the brains to deny their card solicitation and use cash. Do not buy what you can't afford. I do not feel sorry for anyone in credit card debt or housing foreclosure because you brought it on yourself by having things you can't afford! If you lose your job, which I have before then you simply sell your house and find something smaller or rent. No matter what legitimate reason you might have for being in a bind their is a way to get back on your feet eventually.

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Richard Heckler 5 years, 10 months ago

Lawrence has empty homes and a flooded market. So how will adding more homes do anything to stabilize market values? Won't more new homes make existing properties worth less? News people on radio are predicting nothing positive through 2009."the only way for the overall property tax base to grow is through new construction" = cost of community services increase = tax increases and/or user fee increases. Lawrence does not need to expand the tax base which expands the tax bills. Residential does not pay for itself so how will more empty residential be of any real value?Our city's current budget crunch could easily be tied directly to infrastructure expenses needed to serve new housing developments. The community is way over extended in this regard. If residential growth paid for itself and was financially positive, we would not be in a budget crunch. But with increased numbers of houses you have increased demand on services, and historically the funding of revenues generated by residential housing does not pay for the services, they require from a municipality.If the city wants to put money in the pockets of locals hire more city workers,use city equipment and start repairing existing streets and sidewalks in east lawrence,old west Lawrence,Oread....do not add new stuff.New stuff = expanded tax bill. Why would any community be thinking of expanding maintenance bills in tough economic times? when existing resources needs tons of work?

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Richard Heckler 5 years, 10 months ago

This talk about expanding the tax base via more residential is how Lawrence became an expensive bedroom community that cannot seemto manage it's cookie jars in a fiscally responsible manner.

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gr 5 years, 10 months ago

"Stop paying on your credit card balances. You have paid the principal balance three times over most likely anyway so you shouldn't feel bad about it."Why? Why is there a balance on your credit card if you are not doing the same thing as the banks, the government, and most others - living beyond your means? That would make you parcel to the problem."Sorry, but your post is made up of crap and more crap."Defender, you may want to tune in to Dave Ramsey and educate yourself. How can you say someone with credit card debt isn't living in greed?! They are living today with what the hope to make tomorrow. That is greed. They can't afford it, but yet think they deserve it. And as Larry was saying, all the while they are paying many times over what others pay. That is greed - pretending to be rich. Why do you want to give so much to the credit card companies? That is just pure wastefulness.

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Chris Ogle 5 years, 10 months ago

Citi Group is up today..... wonder what that is going to cost us?? ( in real money)

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wysiwyg69 5 years, 10 months ago

"defender" I am not hateful, I just do not have any sympathy for people who live beyond their means

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wysiwyg69 5 years, 10 months ago

"defender' what's for supper tonight, crap.

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TheStig 5 years, 9 months ago

Not to worry, Obama going to bail out Lawrence, pay your mortgage, and make your credit card payments! How you ask? He is going to give your taxes to the wealthy bankers who are filing bankruptcy, rich auto makers who are killing the planet, Big Oil companies who sell their gas too cheaply driving out the small local refiners.Seriously, you all are morons and you deserve all the increase in taxes next year and the years after as you watch the empty buses roll down Mass St increasingly vacant storefronts.

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