One in 355 homes in Queens faced foreclosure during the third quarter of this year, and the continued spike in foreclosures throughout the state could begin affecting local government finances, according to a recently released report by New York State Comptroller Thomas DiNapoli.
Housing crisis hurts property tax revenues
DiNapoli’s report entitled Meltdown: The Housing Crisis and Its Impact on New York State’s Local Governments, shows that property tax revenue, which is the primary source of tax revenue for local governments, could decrease by as much as $1.3 billion this year, and cause governments to raise taxes to offset the deficit.
In 2007, property taxes accounted for more than 44 percent of total revenue from local governments. If property values decline by roughly 5 percent this year and results in a loss of $1 billion to $1.3 billion in tax revenue, local governments would have to raise tax rates by 5.3 percent to raise the same amount of revenue as last year.