Property taxes pose burdens, predatory loan possibilities

Property taxes are always among the most hated taxes. As owners over the years of five houses, the hubby and I definitely are in the hate 'em group.

I understand the money is primarily for financing public schools. And I realize that two of our houses have been in Texas and Florida, states without income taxes, so that means officials there depend heavily on residential real estate's contribution to their coffers.

But after you spend all that money on getting a home loan and paying it, plus the maintenance costs, that annual property tax bill is the final straw.

The only consolation the hubby and I can take is that we've never lived in New Jersey, which has not only an income tax, but also real property taxes that, year after year, are at or near the top of that tax list.

That's the case again according to data in the Tax Foundation's 2014 Facts & Figures brochure. The Washington, D.C.-based think tank every year looks at how various taxes compare state by state.

Using complete 2011 data, the Tax Foundation found that New Jersey came in that year with the highest per capita state and local property tax collections at $2,893.

State and Local Property Tax Collections
Per Capita, Fiscal Year 2011

1. New Jersey: $2,893	18. Maryland: $1,449	35. South Carolina: $1,032
2. District of Columbia: $2,871	19. Iowa: $1,429	36. Missouri: $979
3. Connecticut: $2,577	20. California: $1,426	37. Indiana: $971
4. New Hampshire: $2,518	21. Virginia: $1,377	38. Hawaii: $966
5. New York: $2,335	22. Michigan: $1,374	39. Utah: $913
6. Vermont: $2,197	23. Florida: $1,368	40. North Carolina: $900
7. Wyoming: 2,175	24. Kansas: $1,367	41. Idaho: $867
8. Rhode Island: $2,162	25. Montana: $1,347	42. Mississippi: $856
9. Alaska: $2,076	26. Oregon: $1,312	43. Tennessee: $800
10. Massachusetts: $2,018	27. Pennsylvania: $1,305	44. Louisiana: $776
11. Illinois: $1,881	28. Washington: $1,279	45. West Virginia: $770
12. Maine: $1,808	29. South Dakota: $1,196	46. Delaware: $737
13. Wisconsin: $1,724	30. Ohio: $1,140	47. Kentucky: $689
14. Colorado: $1,637	31. Nevada: $1,110	48. New Mexico: $659
15. Nebraska: $1,566	32. Arizona: $1,103	49. Arkansas: $619
16. Texas: $1,557	33. North Dakota: $1,074	50. Oklahoma: $590
17. Minnesota: $1,535	34. Georgia: $1,060	51. Alabama: $540

Sources: U.S. Census Bureau and Tax Foundation

Alabama was at the other end of the spectrum with a per capita collection rate of $540.

The per capita collection across the United States was $1,428.

Additional tax talk: Texas ranked 16th in the Tax Foundation's latest analysis. That's high enough that many of my neighbors find themselves unable to pay their annual real estate tax bills.

These homeowners' tax struggles have spawned a fast-growing property tax lending industry in the Lone Star State. As I noted last week at my other tax blog, real estate tax lenders pay the delinquent real estate tax bills and homeowners then repay the loan companies via installment loans.

Critics say the loans are the real estate tax equivalent of predatory high-interest payday or tax refund anticipation loans. Advocates say they are a viable option that helps keep people from losing their homes to the tax collector.

Also last week at my other tax blog I looked at how most of our federal income taxes go to pay for very popular programs.

I typically post my additional tax thoughts at Bankrate Taxes Blog each Tuesday and Thursday. Check them out when they go live there or head here to the ol' blog the following weekend for a synopsis.

You also might find these items of interest:

• Where do your residential property taxes rank nationally?
• Pennsylvania school tax protester pays $7,143 bill with $1 bills
• Beware unsolicited -- and questionable -- property tax payment plans