Your local real estate taxes are tied to the assessed value of your home. When home prices go up, as they did during the most recent housing bubble, your taxes go up, too. However, when home values are declining, as they are now, your property taxes are supposed to decrease as well.
Taxpayers across the nation are finding out that contrary to the laws of physics and economics, what goes up doesn’t always come down, especially where confiscatory taxation is concerned. This gut-wrenching realization is fueling a grassroots Tea (“Taxed Enough Already”) Party movement that is spreading like wildfire across the nation.
Fairfax County is a perfect example of this phenomenon. Between 2000 and 2007, property assessments there shot up 178 percent. The inflated equity made homeowners feel flush with cash, so most didn’t complain when their annual property tax bill doubled on average from $2,400 to $4,800 – even though hardly anybody’s income doubled as the assessments headed upward.
During that same time period, county spending increased two times faster – and school spending three times faster – than increases in population, inflation and enrollment would warrant, according to calculations of the Fairfax County Taxpayers Alliance (www.fcta.org).
But nobody was held accountable for this dramatic run-up in taxes and spending, even though it was abundantly clear to FCTA president Arthur Purvis, who has an MBA from Wharton Business School, and other fiscal conservatives that the county was on an unsustainable course.
Former Board of Supervisors chairman Gerry Connolly was rewarded with a congressional seat for running the county’s budget into the ground. Former Budget Committee chairman Sharon Bulova, who replaced Connolly as chairman, now presides over a financial disaster she should have seen coming.
Fairfax County is projecting a $650 million shortfall, more than two-thirds of which ($484 million) was spent on salary hikes and retirement benefits for county employees in excess of inflation, population and enrollment growth, according to FCTA. So most of the extra $200 per month average homeowners are now paying in property taxes goes to line the pockets and pension plans of their so-called “public servants.”
It seems only fair that those who so clearly benefited during the fat times should give back to the community during the lean. Fat chance. Instead, taxpayers will get hit with $40 million in new fees – including $4 admission at popular parks where they go to relieve their financial stress.
Because property taxes increase monthly mortgage payments, Fairfax homes are still $200 a month less affordable, making them even harder to buy or sell. Meanwhile, county officials continue to spend millions of tax dollars to fix the “affordable housing crisis” they helped create.
Adding insult to injury, the Board of Supervisors had the gall to hire Dean Klein – a former executive at Freddie Mac, which was partially responsible for creating the foreclosure crisis that cratered the nation’s housing market – as the county’s $125,000-a-year homeless czar. If this sounds insane, that’s because it is.
The madness doesn’t stop there, however. Home assessments are down dramatically and unemployment is going up, but Bulova and company are planning the largest real estate tax increase in 40 years.
Tea bag, anybody?
Barbara F. Hollingsworth is The Washington Examiner’s local opinion editor.
