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Monday, July 21, 2008

Mortgage help needed for cities and towns too.

Over the last few months, the Federal Government has come to the aid
of failing banks; proposals have been made to help homeowners
refinance their mortgages (Plan to rescue mortgage giants faces
resistance, New York Times, July 16, 2008: A1); one group, which did
not get involved in making stupid over-extending decisions, has been
left in the cold.

The towns, cities, school boards, and states that rely heavily on
income from property taxes are likely to suffer. They too should get
federal aid.

If, as is predicted, 7% of home owners are likely to see foreclosures
on their homes, these innocent bystanders (towns, cities, and states)
are likely to see a drop of 7% in their revenue from property taxes.
The Federal government should immediately announce a program to make
good their losses by providing an infusion of 7% of property tax
revenue to these jurisdictions.

This will prevent a massive reduction in local and state government
programs at a time when the social safety net will be most needed.

Sent to New York Times

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