To the Editor:
How low can you afford your home value to go?
Our real estate tax rate reflects falling home values coupled with higher spending. The issue every homeowner in McHenry County should be terrified about is: Theoretically, your home can be worth less than zero.
Property values are inversely correlated to property tax rate. As your home price drops and your tax bill rises, the tax ratio rises. Why should new buyers buy your home that costs thousands more per year in taxes than the same priced home elsewhere?
Example: At a 3 percent property tax rate, a $200,000 home pays $6,000 a year in property taxes. The national average is closer to 1.14 percent. So, on average, a homeowner anywhere but here pays $2,280 annual taxes for that $200,000 home.
Can home values go to zero? Absolutely. Taxing bodies within McHenry County are empowered by law to incur debt. The homes within the county are collateral for their debt. Homeowners must pay that debt or abandon their property.
Can a county go bankrupt to avoid paying debt? No. While cities such as Detroit may seek bankruptcy protection, the debt which has been incurred on McHenry County homes cannot legally be discharged in bankruptcy.
What’s being done about this? The County Board is increasing spending and have proposed several spending projects this year to increase spending and authorize increased debt and borrowing powers for local taxing bodies: McHenry County College, McHenry County Conservation District, Valley Hi and Randall Road.
That is, what’s being done about this is to make it worse.