Local governments facing budget crises due to falling property taxes may find the worst is yet to come, according to an official from the Federal Reserve Bank of Atlanta.
Tom Cunningham, vice president and associate director of research for the bank, said declines in property tax revenues usually follow drops in housing prices by several years.
“That bottom hasn’t been reached yet,” he told members of the Buckhead Business Association at their weekly meeting May 26. “It won’t be reached for three years yet. There’s going to be a real problem.”
Officials with city and county governments and school systems in metro Atlanta have watched their property tax digests, the total value of all taxable properties, plummet over the past few years. DeKalb County officials, for example, reportedly expect the county’s tax digest to fall by as much as 13 percent this year.
“Those governmental units dependent on property taxes are going to have a problem,” Cunningham said, “and it hasn’t hit yet.”