ALBANY, N.Y. (AP) -- New York state Comptroller Thomas DiNapoli says the next victims of the mortgage foreclosure crisis are the people who have managed to hold onto their homes.
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DiNapoli estimates that property tax revenue could fall by up to $1.3 billion if statewide property values decline as much as during the early 1990s recession.
As mortgage delinquencies continue and more property is seized, local governments will collect fewer property tax dollars unless they raise taxes.
Foreclosures ``lower the value of surrounding homes and puts demands on municipal services,'' DiNapoli said in a written statement. ``Over time, lower property values can lead to lower property tax collections. With no end in sight to the housing crisis, many local governments will find their finances stretched pretty thin.''
The report estimates that more than 50,000 New York homeowners could experience foreclosure this year.
In 2007, property taxes accounted for more than 44 percent of total revenue for local governments. Increased foreclosures hurt municipal cash flows, especially in counties that are responsible for enforcing and collecting unpaid property taxes to close budget gaps for their towns and school districts, DiNapoli said.
According to the report, counties paid approximately $400 million to school districts for unpaid taxes in 2006 and $375 million in 2007.
New York's cities, counties and villages are constitutionally limited in how much revenue they can raise through the property tax, so shortfalls may be unavoidable.
Statewide foreclosures increased 77 percent from 2006 to 2007. Statewide foreclosures for the third quarter of 2008 show an increase of 99 percent since 2006.
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