Tax Foreclosures Threatening to Spread Across Texas
Tax foreclosures are threatening to spread across a Texas city as its officials decided to raise property taxes to compensate for revenue losses.
The Forest Hill city was once considered as the place to be in Texas. Home for about 13,000 people, the city was once a picture of growth and opportunities. But the city has taken a beating from the current economic downturn, rising unemployment and foreclosures, low property and sales tax revenues.
Some residents said that so far, the city is not deteriorating, but neither it is growing. The city has been experiencing a dramatic decline in revenues. To compensate for revenue losses, the Forest Hill government adopted a reduced budget of $6.1 million. The figures mean that there will be no hiring to fill up vacant positions in the departments of public works, police and fire.
And to compensate for revenue losses, avoid layoffs and cuts on city services, the local government raised property taxes by almost 11.6 percent from 95 cents to $1.06 for every $100 assessed value.
Industry experts are concerned that the increase in property taxes would drive up tax foreclosures in the area as the current development is another burden for the many struggling homeowners in Forest Hills.
City Manager David Miller said that the current economic situation in Forest Hill is the worst he has ever seen. One of the hardest hit areas in the city is the north side which has a high concentration of foreclosure and rental properties.
Citywide, the foreclosure problem is serious. Data from the Tarrant Appraisal District showed that the city experienced a 9.3 percent drop in property values this year compared with the previous year. The decline in property values was the largest compared with other school districts and cities in Tarrant County.
Forest Hills officials blamed the burgeoning foreclosure problem for the decline of property values. About 80 foreclosed houses have been posted since July and 20 were sold at foreclosure auctions.
Industry experts said that foreclosure is a harbinger of more troubles for the community, including neglect, code-enforcement problems and crime.
Meanwhile, Forest Hill has been chosen as one of the cities in Tarrant County to receive grants under the Housing and Economic Recovery Act of 2008. The city is currently developing a revitalization plan to help neighborhoods severely affected by the foreclosure problem and to prevent more tax foreclosures.
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