April 22 - Property-tax collections are rising at the fastest pace since the U.S. housing market crash sent government revenue plunging, according to Bloomberg Business News.
In cities including San Jose, California, Nashville, Tennessee, Houston and Washington, revenue from real-estate levies has set records, or is poised to.
Local governments are using the money to hire police, increase salaries and pave roads after the decline in property values and 18-month recession that ended in 2009 forced them to eliminate about 600,000 workers and pushed Detroit, Central Falls, Rhode Island, and three California cities into bankruptcy.
“‘The money is flowing back, but it’s not like an open spigot,” said Rob Hernandez, deputy administrator of Broward County, Florida, where property-tax revenue is set to rise 7 percent this fiscal year, though it remains below earlier peaks. “It’s trickling in.”
Property-tax collections nationally rose to $182.8 billion during the last three months of 2013, when much of the money is due, according to a U.S. Census estimate last month. That topped the previous peak four years earlier, before the decline in housing values reduced revenue.
That increase helped boost collections for the year by 3 percent over 2012. That was the biggest gain since 2009, when revenue climbed 9 percent.
“With cities having increased real-estate tax collections, it will really improve their bottom lines,” said Brooks Rainwater, a director of research for the National League of Cities in Washington.
The financial recovery is easing the risk of credit-rating cuts for local governments, which could increase prices by pushing down yields as a result of less risk.
Bonds from local government issuers have gained 5.34 percent this year through April 16, outpacing the broad market’s 4.86 percent advance, Bank of America Merrill Lynch data show. It would be the first time since 2008 that debt from cities, counties and townships have outpaced all securities in the $3.7 trillion market.
Property taxes have taken longer to rebound than other types of levies, prolonging the effects of the 18-month recession that ended in 2009. It can take more than a year for tax bills to catch up with changes in home values. Some state laws limit annual property-tax increases.