States Bring Property Tax Relief in Recent Sessions
Following a three-year period of unusually rapid increases in home prices, many of the 44 state legislatures that held sessions earlier this year successfully put through property tax relief, according to Stateline.org's “2006 Legislative Year in Review.”
Budget surpluses provided state legislators a welcome reprieve from budget cutting and squeezing, and for the first time since the 2001 national economic downturn, all but 10 of the 50 states were awash in revenue, Stateline reported.
Setting a precedent, Massachusetts became the first state to pass a law requiring people to buy health insurance and it vowed to fine companies $295 for each worker not offered coverage. Vermont followed suit with a plan requiring private insurers to offer health coverage for primary and preventive care, with a state commission overseeing the program.
Over the veto of Republican Gov. Robert Ehrlich, the Maryland General Assembly also ventured into new territory when it passed the nation’s first law to require large employers to pay more employee health benefits. The so-called “Wal-Mart law” was overturned in federal court.
With the federal minimum wage stuck at $5.15 an hour for nearly a decade, and polls showing widespread popularity for proposals to raise the rate, 11 states (Arkansas, California, Delaware, Maine, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Rhode Island and West Virginia) passed laws providing a boost for the lowest-paid wage earners.
Washington state currently has the highest hourly rate at $7.63. New laws in California and Massachusetts will increase their minimum wage rates to $8 an hour in 2008, the highest in the country, although states with inflation-adjusted wage rates, such as Washington and Oregon, may surpass it, the report by Stateline.org. said.
Cracking Down on Illegal Immigration
Legislation cracking down on illegal immigration was passed in Colorado and Georgia.
The Democratic-controlled Colorado General Assembly, working with Republican Gov. Bill Owens, agreed on a package of new laws called the strongest sanctions in the nation against undocumented residents and businesses that employ them. The lawmakers also voted to put initiatives on the November ballot that would bar employers from deducting the wages of illegal aliens as an expense on state tax forms and give the state the green light to sue the federal government for failing to enforce federal immigration laws.
Georgia’s legislature passed a new law attempting to lower the boom on illegal immigration by requiring the state and local government to verify the residency of any adult applying for public assistance and removing tax breaks for businesses caught employing undocumented workers.
Arizona, New York, Pennsylvania, Rhode Island and South Carolina were among the states to pass property tax-cutting laws in response to high property taxes. Among the property tax initiatives:
- A bid to lower New Jersey’s property taxes, the highest in the nation, was a major factor in the budget impass that shut down state government for six days in July before first-year Democratic Gov. Jon Corzine was able to reach an agreement to increase the sales tax by 1%, with half of the new revenue earmarked for lowering property taxes. As part of the $30 billion budget deal, the state also is imposing sales taxes on a new array of goods and services, including home renovations and landscaping.
- In a one-day special legislative session in August, the Idaho Legislature approved a proposal by Republican Gov. James Risch to raise the sales tax one cent in order to cut property taxes by 20%. The proposal was sent to the voters on Election Day.
- Lawmakers in Florida, who spent much of their time unsuccessfully wrestling with a tax proposal to insulate home owners from whopping storm-related hikes in insurance premiums, voted to put three measures before the voters in November: a property tax exemption for low-income seniors; a property tax discount for elderly, disabled war veterans; and an eminent domain measure that would prohibit the state from condemning property in order to sell it to a third-party land developer.
- In March, the Indiana General Assembly signed off on a property-tax relief bill for home owners that is expected to cost the state $100 million over the next two years.
- The Nebraska Legislature handed out $100 million in income and property tax breaks during its 60-day session ending on April 14.
- The New York State Assembly included a heftier rebate for property owners among its newly enacted tax breaks.
- The $6.7 billion state budget signed by Republican Rhode Island Gov. Donald Carcieri in June lowered the cap on increases in annual property tax revenue from 5.5% to 4% by 2013. It also contained a plan that allows the state’s wealthiest residents the choice of a flat 8% income tax with no deductions, lowered each year until it reaches 5.5% — or the current 9.9%, after deductions.
- In a last-minute compromise, South Carolina legislators hammered out property tax relief. The state will remove school operating costs from home owner property taxes — in some cases cutting property taxes in half — and compensate by raising the state sales tax from 5 to 6 cents.
- The Texas Legislature, which meets in regular session during odd-numbered years, passed five bills aimed at overhauling the so-called “Robin Hood” system, which redistributed property taxes from wealthy school districts to poorer ones.
For more information, e-mail Alex Strong at NAHB, or call him at 800-368-5242 x8279.