http://www.businessweek.com/magazine/content/11_02/b4210029439924.htmAs real estate values plunge, many homeowners are appealing property taxes, adding to the financial woes of cities and states
December 29, 2010, 5:00PM EST
Cities and states, already straining to balance budgets, are in for another shock in 2011 as hordes of property owners appeal tax assessments, demanding lower levies that reflect battered real estate values. Less property tax revenue means more pressure on local governments to cut services, especially public schools and police and fire departments that rely heavily on those taxes.
U.S. home prices have tumbled 30.5 percent below their April 2006 peak, according to the 20-city S&P/Case-Shiller index as of Oct. 31, the latest available figure. That matches the decline in values during the Great Depression's darkest days, from 1925 to 1933, according to Yale University economist Robert J. Shiller, who helped develop the index.
In Michigan, where Governor-elect Rick Snyder has warned that hundreds of towns face financial crises, tax appeals are overflowing at the office of Patricia L. Halm, head of the state Tax Tribunal. "We're just getting swamped," says Halm, 54, who was appointed to the Lansing-based administrative court in 2003. "We're constantly buying new file cabinets to hold all the cases. We even have six surplus file cabinets in the courtroom."