Owners, be careful.
State and local governments struggling to raise money during the economic crisis caused by the coronavirus pandemic are seeking to increase property taxes, as well as wealth taxes and more, to fill budget gaps.
Proposals are presented when officials try to strike a balance. Historic job losses caused by blockages fueled the recession that put pressure on city and state budgets. Washington sought to compensate for this with stimulus payments, additional unemployment benefits, trade subsidies and more. Any push to raise taxes too dramatically could further harm the economy.
But some officials argue that increases are inevitable.
Property tax rates in Nashville, Tennessee will rise by 34 percent in what Mayor John Cooper described as a “painful but necessary” measure that will raise money for the city, which was hit during the pandemic.
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Elsewhere, the debate is raging.
This November, Californians will vote whether to strip the protections of decades of commercial and industrial property. Since 1978, fair market value tax reevaluations of California property have only been conducted when the property is sold or there is new construction. Otherwise, evaluations are limited to 2 percent increments per year. The new measure, if approved, would make exceptions to it for industrial and non-agricultural commercial property, requiring that they be reevaluated at fair market value at least every three years.
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In Chicago, Mayor Lori Lightfoot said property tax increases are “on the table” to help tackle budget problems that include a projected deficit of nearly $ 700 million that she says could be even higher.
“Those are the last options and tools that I want to use, but I can’t remove any of them,” he said.
In Texas, Dallas lawmakers were considering a massive property tax hike of up to 8 percent, but they needed the city council to pass a measure that would allow them to raise rates by more than 3.5 percent. In May, the resolution failed after a 12-3 vote.
“I want to get this option off the table,” said City Council member Cara Mendelsohn, according to the local NBCDFW. “And if we pass this resolution and raise taxes even close to this amount, we would be creating the next disaster for Dallas.”
Other areas are looking for different methods to increase income, such as wealth taxes. A New York state senator from Queens said in May that “the only people who really have money right now are billionaires” and introduced a bill that would treat capital gains as income and tax unrealized capital gains.
However, that money would not be used for existing programs. The funds raised from the tax billions of billionaires would go to a new “worker rescue fund” that would provide monthly payments of $ 3,300 for people who do not qualify for unemployment benefits or CARES Act payments.
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Other New York state lawmakers are pushing for increased income taxes for those who earn more than $ 5 million.
In Seattle, a new measure passed by the City Council will add a business tax with at least $ 7 million in annual payroll. The JumpStart Seattle tax will levy businesses up to 2.4 percent on Seattle-based employees who earn more than $ 150,000. The bill makes specific reference to the emergency conditions imposed by the pandemic.
Last week, New Jersey approved a plan to borrow up to nearly $ 10 billion to address a massive budget deficit. Republicans have warned that this could lead to an increase in property taxes or a wealth tax, while Governor Phil Murphy has said that if the state does not borrow, “it would have no choice but to raise taxes on ownership, “according to NJ. com.
However, in a Friday interview with the Washington Post, Murphy said taxes could still rise, as the state will likely need “revenue collectors” and “everything is on the table.”
Fox Business’s Brittany De Lea contributed to this report.
