U.S. state and local property-tax collections dropped in the last three months of 2010 by the most since home prices peaked more than four years ago, slowing the overall growth in government revenue.
Real-estate-tax collections, a main source of income for cities, slid $5.3 billion, or 2.9 percent, from a year earlier to $177.1 billion, the Census Bureau reported today. The drop exceeded a 2.5 percent decline in the first quarter of 2010, the data show.
The slide in realty taxes restrained the growth of state and local revenue during the fourth quarter to 1.6 percent, less than in the previous two quarters, the Census Bureau said.
Moody’s Investors Service said March 17 it expects the taxable value of housing to drop through much of 2011. It said this year would be the toughest for local governments struggling to balance their budgets since the onset of the recession in 2007.
Property-tax collections continued to rise after the housing-market decline because of the lag between when prices change and when values are reset by local tax authorities.
© Copyright 2017 Bloomberg News. All rights reserved.