Wednesday, October 6, 2010
WASHINGTON (AP) -- Local tax revenue fell this year by the steepest amount in 25 years, with falling home prices just beginning to drag down property tax receipts.
The National League of Cities says that local governments' property tax revenue fell 1.8 percent in fiscal year 2010, the first drop in the 25 years the survey has been conducted. Overall, tax revenue fell 3.2 percent in 2010, and cities cut spending by 2.3 percent.
Revenues are likely to fall further in coming years as the housing slump takes its toll on real estate values. That will increase the pressure on city governments to cut services and raise taxes and fees.
Home prices peaked several years ago, but the impact of falling prices takes time to affect property taxes. Most local government real estate assessments lag changes in market values.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
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