What do property taxes pay for?

The end of the year brings holiday celebrations, New Year’s resolutions, football playoffs and bowl games, and for many, the dreaded property tax bill.

If you're like most people, you look at your property tax statement and automatically think "That's too high." But if you take a closer look, you'll see that your property taxes are spent in a lot of different areas, which is why it’s so hard to get lower taxes overall.

Depending upon where you live, your property taxes fund any number of state and local government functions. Here are the most common lines you'll see on your property tax.

Schools

By far, public schools are the largest single line item in nearly any property tax bill. A commitment to providing the best possible education often leads to higher local property values. In addition, the houses in neighborhoods with higher rated schools generally have higher prices. Although public school systems get funding from a variety of sources, including federal government, state government, fund raising efforts, the largest source is generally from property taxes. This is also why any tax reduction attempts meet strong resistance from both school employees and parents of school-aged children.

Public roads and parks

Although a lot of money from gasoline goes to roads, those are mostly financed by state and federal government. City and neighborhood street repair comes from property tax. Public park maintenance is funded as well.

Utilities

Depending upon the area in which you live, your property tax bill may also include certain utility costs that are provided by the county or municipality, which could include sewer, water and maybe garbage collection.

Government administration costs

This is a relatively small part of the local budget, but it covers salaries and benefits for municipal administrative staff and the buildings that house them.

Public safety

Many people mistakenly think that traffic citations fund police budgets, but most of their operating budget is provided through property taxes. Firefighters are also included in this category. This includes not only salary and benefits for policemen and firemen, but support personnel as well the acquisition of buildings and police cars.

Libraries

Although they’re not usually very large parts of your tax bill, they are considered highly desirable in most communities and largely beyond political haggling. When a tax increase is on the ballot, it rarely fails.

City and county allocations

Both rely primarily on real estate tax revenues to support their operations, so taxes are usually collected and paid to both. In many cities and counties, one government agency may collect the tax under a single bill, then apportion the funds, so you may pay your taxes to your municipality who then forwards the required portion to your county.