As local property taxes continue to climb, state finance officials are preparing for a significant increase in the number of people seeking financial relief. While local cities and counties rely heavily on property taxes to fund essential services like road repairs and public safety, it is the state government that steps in to manage and fund the various relief programs designed to help residents stay in their homes.
Recent budget forecasts indicate that the demand for these tax relief programs, which are often based on a person’s income or the total value of their home assessment, is set to grow by tens of millions of dollars annually. In the current budget alone, experts anticipate an $84 million increase in demand, representing a nearly 2 percent jump. This trend is expected to accelerate even further in the coming years.
One specific area seeing a massive spike is the special property tax refund. This program is a safety net for homeowners who experience a sudden, dramatic increase in their property taxes from one year to the next. Forecasts suggest that the cost of these specific refunds could jump by as much as 50 percent, requiring an additional $8 million more than originally planned. State Revenue Commissioner Paul Marquart noted that this shift is entirely logical; as local governments increase their tax levies to meet their own rising costs, more citizens naturally become eligible for state-funded refunds to offset those costs.
The timing of these increases is tied to the annual budget cycle. Local governments recently sent out preliminary tax statements to homeowners, giving residents a preview of what they might owe. While these local governments have the power to lower their tax rates before the final deadline, they are not allowed to raise them above the initial proposals sent earlier this fall. This gives homeowners a “worst-case scenario” look at their upcoming bills, often prompting them to look into state aid programs.
The state is now bracing for the raw totals of these aid programs to hit even higher peaks in the next two-year budget cycle. This puts the state in a position where it must balance its own budget while ensuring there is enough money set aside to help residents who are feeling the squeeze. By law, all local tax levies must be finalized by December 29, meaning homeowners will soon know exactly where they stand and how much help they will need to request from the state. For many, these state refunds are not just a bonus, but a necessary lifeline that makes the rising cost of living more manageable.
