I'm not an economist but if property tax growth is effectively capped at 2% and teachers are paid out of property tax then any time housing price grows by more than 2% teachers are at a disadvantage to buy a house.
Does the new buyer pay the tax on appreciation in all the previous years? If not teachers are getting screwed twice.
If a house is appraised at $10,000.00 in 2000 and doesn’t sell for 10 years it pays $2000.00 in taxes. Since teachers are paid out of this tax their salaries increases are capped at $2,000.00. If wages (and housing prices) in general went up at even 3% per year then teachers have to compete against other buyers with double the cash.
The only way teachers aren’t getting screwed here is if every house sells every year.
Again, I’m not an economist and these numbers are obviously a gross oversimplification.
