What can condo boards consider closed-door ‘personnel issues’?

STUART, Fla. – Jan. 8, 2019 – Question: Our HOA board called a private board meeting for ‘Personnel Issues.’ The meeting was held to discuss an email a director sent by mistake to the general manager. The email had some satirical comments about a board member’s decision.

The board voted to ask the director to resign for ethics reasons, and if they did not resign to remove them from their officer position. Is this a meeting that can be legally closed?

They also had private board meetings which were called to discuss a vendor contract but had it without an attorney present. The way I read the Sunshine laws that is also not a legal meeting. When I asked the board president about the meetings, he said their attorney said they were legal because they were contract negotiations. Your opinion? – R.L., Port St. Lucie

Answer: Thank you for your questions. The law applicable the Homeowners Associations is Section 720.303, Florida Statutes which provides that:

“Notwithstanding any other law, meetings between the board or a committee and the association’s attorney to discuss proposed or pending litigation or meetings of the board held for the purpose of discussing personnel matters are not required to be open to the members other than directors.” The law for condominiums is identical.

A meeting of the board to discuss the actions or communications of a director or officer as you have described is not a personnel matter in my opinion. An officer or director of the association is not the association’s “personnel.”

If the meeting was about comments made about the general manager, then it could be considered a personnel matter, but that would mean it involved something about the general manager who is the association’s employee, i.e. personnel. You indicated the purpose of the meeting was to discuss comments made to the GM about the board – not about the GM. This does not qualify in my opinion as a personnel matter that would allow the meeting to be closed to members.

Meetings to discuss negotiations about the vendor contract when the association’s legal counsel was not present are also not meetings that can be closed to the members. Even if the association attorney was present at the meeting, it likely should not have been closed because the purpose of the meeting was not to discuss “proposed or pending litigation” as required by the law below.

Boards often want to hold closed meetings to discuss matters that they otherwise do not want to publicize, sometimes for good reason such as negotiation of contract terms when there are several service bidders, but neither of the two exceptions apply for this purpose.

Question: Can the association require a $25 processing fee for approving rentals? – C.G., Palm City

Answer: Condominium and cooperative associations can only charge a fee in connection with a rental application if 1) The governing documents require the Association to approve rentals or leases and 2) The governing documents expressly provide that a fee can be charged.

Further, if the fee is authorized, the law provides that it cannot be greater than $100 per applicant with each adult deemed to be a separate applicant. However, spouses are deemed to be a single applicant. The HOA law does not address these issues, but in my opinion, the authority to charge a rental application fee must be found in the governing documents.

Richard D. DeBoest II, Esq., is co-founder and shareholder of the Law firm Goede, Adamczyk, DeBoest & Cross, PLLC. The information provided herein is for informational purposes only and should not be construed as legal advice.

The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, PLLC or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, PLLC., respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law

What will cause the next recession? Not what you think

NEW YORK – Jan. 9, 2019 – Over the past 40 years, the U.S. economy has experienced four recessions. Among the four, only the extended downturn of 1979-1982 had a conventional cause. The U.S. Federal Reserve thought that inflation was too high, so it hit the economy on the head with the brick of interest-rate hikes. As a result, workers moderated their demands for wage increases, and firms cut back on planned price increases.

The other three recessions were each caused by derangements in financial markets. After the savings-and-loan crisis of 1991-1992 came the bursting of the dot-com bubble in 2000-2002, followed by the collapse of the subprime mortgage market in 2007, which triggered the global financial crisis the following year.

As of early January 2019, inflation expectations appear to be well anchored at 2 percent per year, and the Phillips curve – reflecting the relationship between unemployment and inflation – remains unusually flat.

Production and employment excesses or deficiencies from potential-output or natural-rate trends have not had a significant effect on prices and wages. At the same time, the gap between short and long-term interest rates on safe assets, represented by the so-called yield curve, is unusually small, and short-term nominal interest rates are unusually low.

As a general rule of thumb, an inverted yield curve – when the yields on long-term bonds are lower than those on short-term bonds – is considered a strong predictor of a recession.

Moreover, after the recent stock-market turmoil, forecasts based on John Campbell and Robert J. Shiller’s cyclically adjusted price-earnings (CAPE) ratio put long-run real (inflation-adjusted) buy-and-hold stock returns at around 4 percent per year, which is still higher than the average over the past four decades.

These background indicators are now at the forefront of investors’ minds as they decide whether and when to hedge against the next recession. And one can infer from today’s macroeconomic big picture that the next recession most likely will not be due to a sudden shift by the Fed from a growth-nurturing to an inflation-fighting policy.

Given that visible inflationary pressures probably will not build up by much over the next half-decade, it is more likely that something else will trigger the next downturn.

Specifically, the culprit will probably be a sudden, sharp “flight to safety” following the revelation of a fundamental weakness in financial markets. That, after all, is the pattern that has been generating downturns since at least 1825, when England’s canal-stock boom collapsed.

Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks, but there will always be other contingencies that have been missed.

For example, the death blow to the global economy in 2008-2009 came not from the collapse of the mid-2000s housing bubble, but from the concentration of ownership in mortgage-backed securities.

Likewise, the stubbornly long downturn of the early 1990s was not directly due to the deflation of the late-1980s commercial real-estate bubble. Rather, it was the result of failed regulatory oversight, which allowed insolvent savings and loan associations to continue speculating in financial markets.

Similarly, it was not the deflation of the dot-com bubble, but rather the magnitude of overstated earnings in the tech and communications sector that triggered the recession in the early 2000s.

At any rate, today’s near-inverted yield curve, low nominal and real bond yields, and equity values all suggest that U.S. financial markets have begun to price in the likelihood of a recession. Assuming that business investment committees are thinking like investors and speculators, all it will take now to bring on a recession is an event that triggers a retrenchment of investment spending.

© 2019 Muscat Media Group Provided by SyndiGate Media Inc. (Syndigate.info), J. Bradford DeLong

Mortgage rates slip again this week, hit 4.62%

WASHINGTON (AP) – Dec. 20, 2018 – U.S. long-term mortgage rates slipped this week, reflecting the stock market decline and rush by investors to Treasury notes.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year, fixed-rate mortgage fell slightly to 4.62 percent from to 4.63 percent last week. Rates averaged 3.94 percent a year ago.

The rate on 15-year fixed-rate loans held at 4.07 percent for the second straight week, up from 3.38 percent a year ago.

Higher mortgage rates over the past year have caused home sales to drop. But mortgage rates have declined in recent weeks as fears about an economic slowdown have caused more investors to sell stocks and buy Treasury notes.

Amid the purchases, the interest on a 10-year Treasury has fallen from 3 percent to under 2.8 percent in the past month. Mortgage rates generally correspond with the interest charged on U.S. government debt.

Sam Khater, Freddie Mac’s chief economist, said that lower rates should help to boost home sales.

“Given the further drop in rates we’ve seen this month, we expect to see a modest rebound in home sales as well,” he said.

Copyright © 2018 The Associated Press, Josh Boak. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

HUD: 55-and-older community can’t ban disabled child

WASHINGTON – Dec. 19, 2018 – The U.S. Department of Housing and Urban Development (HUD) announced that Tamaron Association – which represents residents of a 55-and-older condominium development in Waldwick, New Jersey – will pay $9,000 under an Initial Decision and Consent Order resolving allegations that the association refused to sell a condo to a man with disabilities and his wife because the couple planned to have their adult, disabled daughter live with them.

The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities and from refusing to make reasonable accommodations in policies or practices.

“No family whose members have disabilities should be denied the reasonable accommodations they need to make a home for themselves,” says Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Hopefully, today’s ruling will remind homeowner associations of their obligations under the Fair Housing Act and encourage them to follow the law.”

Under the terms of the Consent Order, entered by a HUD administrative law judge, Tamaron Association will pay a civil penalty of $9,000 to the United States, undergo fair housing training, and make changes to the associations’ bylaws as they relate to reasonable accommodations.

The wife, now a widow, is pursuing claims against Tamaron Association in New Jersey State Court. Tamaron Association denies that it discriminated against the family.

“HUD is committed to ensuring that housing providers, including homeowner associations, do not discriminate against individuals with disabilities,” said Paul Compton, HUD’s General Counsel. “This Consent Decree is a reminder to housing providers that making reasonable accommodations for persons with disabilities is an essential part of their legal obligation under the Fair Housing Act.”

FHA loan limits increased for 2019

WASHINGTON – Dec. 17, 2018 – The Federal Housing Administration (FHA) announced the agency’s new schedule of loan limits for 2019, with most areas in the country to experience an increase in loan limits in the coming year. These loan limits are effective for FHA case numbers assigned on or after Jan. 1, 2019 and mirror earlier limits announced by the Federal Housing Finance Administration (FHFA).

In high-cost areas of the country, FHA’s loan limit ceiling will increase to $726,525 from $679,650. FHA will also increase its floor to $314,827 from $294,515.

FHA says that increases in median housing prices required changes to FHA’s floor and ceiling limits, which are tied to the Federal Housing Finance Agency (FHFA)’s increase in the conventional mortgage loan limit for 2019.

Overall, the maximum loan limits for FHA forward mortgages will rise in 3,053 U.S. counties. In 181 counties, FHA’s loan limits will remain unchanged.

By statute, the median home price for a Metropolitan Statistical Area (MSA) is based on the county within the MSA having the highest median price. HUD has used the highest median price point for any year since the enactment of the Housing and Economic Recovery Act (HERA).

The cap for reverse mortgages – FHA-insured Home Equity Conversion Mortgages (HECMs) – will increase to $726,525 from $679,650. FHA’s current regulations implementing the National Housing Act’s HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county.

The National Housing Act, as amended by HERA, requires FHA to establish floor and ceiling loan limits based on the loan limit set by FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. FHA’s 2019 minimum national loan limit, or floor, of $314,827 is set at 65 percent of the national conforming loan limit of $484,350. This floor applies to those areas where 115 percent of the median home price is less than the floor limit.

Any areas where the loan limit exceeds this ‘floor’ is considered a high-cost area, and HERA requires FHA to set its maximum loan limit ‘ceiling’ for high-cost areas at 150 percent ($726,525) of the national conforming limit

More homes sell for less than asking price

MIAMI – Dec. 13, 2018 – According to the National Knock Deals Forecast, uses data for both predictive and historical analyses from ATTOM Data Solutions, the percent of home sellers who eventually sold for less-than-asking price in 2018 was about 2 in 3 (62 percent).

Of those homes that sold for less than asking price, six out of 10 are in the South, with Miami at No. 1, followed by New Orleans and Chicago.

As home values rise more slowly, Knock predicts that the trend of lower sale prices will continue into 2019, when 77 percent of on-the-market listings will sell for less than asking price, and half of the “top 10 markets for deals” will be in the South.

“Knock has developed six predictive algorithms to determine how much our Home Trade-in customers’ homes will sell for and when,” says Sean Black, co-founder and CEO of Knock. “By applying these algorithms … we hope to help more home buyers find and act on the best deals, and increase overall market fluidity.”

Knock analyzed on-market listings in the largest U.S. MSAs to determine the markets with the highest percentage of homes predicted to sell below their original list prices, what Knock defines as a “deal.” In November, Knock said that 80 percent of U.S. homes sold within 4 percent of its predicted final sale price, and 50 percent sold within 2 percent of the predicted final sale price.

The number one predicted MSA for deals heading into 2019, Miami, also saw the highest rate of deals in 2018.

“While there’s no denying that home prices have been steadily on the rise, list prices are clearly increasing above realistic levels, corroborated by the study’s findings that over 60 percent of homes sold well below their original list prices in 2018,” says Paul Habibi, economic advisor to Knock and Lecturer at UCLA Anderson School of Management.

The tendency to overprice

While the rate of home price increases has begun to slow, it’s still up 5.1 percent year-over-year, according to the S&P CoreLogic Case-Shiller Indices. As prices have gone up, so have home sellers’ expectations of their home values, and there’s a tendency to list a home for a bit more than recent nearby sales.

When sellers price homes aggressively, however, they can sometimes end up selling it not just below their original list price, but also below market value because buyers wonder about a home that has been on the market for a longer period of time.

For homes sold in November, Knock found that 92 percent of listings that had been on the market two months or more sold below their list prices – 22 percent more than the rate of all listings that sold below their original list prices in November. On average, these homes sold for 1.5 percent less than the overall market.

In Miami, for example: 76 percent of listings sold at least 2 percent below original list prices, compared to 3 percent of listings selling 2 percent or more above original list prices. The ratios are different in a market like San Francisco, where 58 percent of listings sold at least 2 percent above original list prices. But given that the majority of all U.S. listings still sold 2 percent or more below list price, underpriced markets appear to be the exception rather than the norm.

Based on predictions of all listings that hit the market in the past six weeks, five out of the 10 top markets for deals are in the Southern half of the U.S. Miami continues to top the list, with Houston, Texas, Jacksonville, Fla., New Orleans, La. and Tampa, Fla. also having some of the highest predicted rates of deals heading into 2019.

“Given that the slowdown of home price increases is just beginning to take hold, we can expect home sellers to continue to set their original list prices on the higher end, which has the potential to result in greater deals for home buyers,” Knock says it a news release. “Particularly as we head into January, which has historically been one of the best months for deals, the combination of seasonality and the slowing market make the perfect recipe for the increased rate of deals.”

I AM A VETERAN by Andrea Christensen Brett

You may not know me the first time we meet
I’m just another you see on the street
But I am the reason you walk and breathe free
I am the reason for your liberty

I work in the local factory all day
I own the restaurant just down the way
I sell you insurance, I start your IV
I’ve got the best-looking grandkids you’ll ever see

I’m your grocer, your banker
Your child’s schoolteacher
I’m your plumber, your barber
Your family’s preacher
But there’s part of me you don’t know very well
Just listen a moment, I’ve a story to tell

I joined the service while still in my teens
I traded my prom dress for camouflage greens
I’m the first in my family to do something like this
I followed my father, like he followed his

Defying my fears and hiding my doubt
I married my sweetheart before I shipped out
I missed Christmas, then Easter
The birth of my son
But I knew I was doing what had to be done

I served on the battlefront, I served on the base
I bound up the wounded
And begged for God’s grace
I gave orders to fire, I followed commands
I marched into conflict in far distant lands

In the jungle, the desert, on mountains and shores
In bunkers, in tents, on dank earthen floors
While I fought on the ground, in the air, on the sea
My family and friends were home praying for me

For the land of the free and the home of the brave
I faced my demons in foxholes and caves
Then one dreaded day, without drummer or fife
I lost an arm, my buddy lost his life

I came home and moved on
But forever was changed
The perils of war in my memory remained
I don’t really say much, I don’t feel like I can
But I left home a child, and came home a man

There are thousands like me
Thousands more who are gone
But their legacy lives as time marches on
White crosses in rows
And names carved in queue
Remind us of what these brave souls had to do

I’m part of a fellowship, a strong mighty band
Of each man and each woman
Who has served this great land
And when Old Glory waves
I stand proud, I stand tall
I helped keep her flying over you, over all



Presidential Proclamation on National Veterans and Military Families Month, 2018

Issued on: October 31, 2018

During National Veterans and Military Families Month, we salute the brave and dedicated patriots who have worn the uniform of the United States, and we celebrate the extraordinary military families whose selfless service and sacrifice make our military the finest in the world.

Our Nation’s veterans represent the best of America. Generation after generation, men and women have answered the call to defend our country and our freedom, facing danger and uncertainty with uncommon courage. They make tremendous sacrifices by leaving their families to serve throughout the homeland and in combat, contingency, and humanitarian operations worldwide.

Our heroes have always relied on their families for strength and support. Serving alongside our men and women in uniform are spouses, siblings, parents, and children who personify the ideals of patriotism, pride, resilience, service above self, and honor. They endure the hardships and uncertainty of multiple relocations, extended trainings, and deployments because of their admirable devotion to our country and a loved one in uniform.

President Ronald Reagan said, “America’s debt to those who would fight for her defense doesn’t end the day the uniform comes off.” Our Nation’s veterans fulfilled their duty to this country with brave and loyal service; it is our moral and solemn obligation to demonstrate to them our continuing gratitude, unwavering support, and meaningful encouragement.

I am steadfastly committed to ensuring our veterans and their families receive the care and support they deserve. I was pleased to sign into law the landmark VA MISSION Act of 2018, which revolutionizes the way veterans receive healthcare and other services vital to their lives. The Department of Veterans Affairs is continuing to raise its standard of service, including through the establishment of the first national center of excellence for veteran and caregiver research, which will improve services and outcomes for patients and their families. I have also mandated greater collaboration across the Government to support veterans transitioning to civilian life. Additionally, Second Lady Karen Pence and I have collaborated on ways to elevate the career and educational opportunities for military spouses and children in partnership with State, local, and tribal officials.

It is most appropriate that in this season of gratitude we stop to recognize veterans, military families, and those who gave their lives in service to this great Nation. We are indebted to these heroes for the freedoms we enjoy every day. I ask all Americans to join me in offering our sincere thanks to our veterans and the families who love and support them.

NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim November 2018 as National Veterans and Military Families Month. I encourage all communities, all sectors of society, and all Americans to acknowledge and honor the service, sacrifices, and contributions of veterans and military families for what they have done and for what they do every day to support our great Nation.

IN WITNESS WHEREOF, I have hereunto set my hand this thirty-first day of October, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-third.
                                        DONALD J. TRUMP

Kiplinger: Fla. No. 4 tax-friendly state – and top 3 are cold

NEW YORK – Oct. 17, 2018 – The economy is booming, with the unemployment rate at the lowest level in nearly 50 years. Wages have remained relatively stagnant, though, and for many workers, the only way to get a raise is by changing jobs, which sometimes means moving to another city or state.
But before you start packing, check out the cost of living in your prospective employer’s city. You’ll want to look at the cost of housing, of course, and don’t overlook the impact of state and local taxes on your bottom line. Our annual guide to state taxes shows that tax rates are literally all over the map – and the difference between living in a high-tax or a low-tax state can be thousands of dollars each year, depending on your tax situation.
Updated for 2018, here is our list of the 10 most tax-friendly states in the U.S. The top five states on our list have no state income tax at all. Take a look.
1. Alaska
State income tax: None
Average local sales tax: 1.43 percent
Gas taxes and fees: 15 cents per gallon
Alaska gives each legal resident who has lived in the state for a full year an annual “Permanent Fund Dividend.” But the dividend has been shrinking in recent years, reflecting lower oil prices and a drop in production. This year, each legal resident will receive $1,600, down from a peak of $2,072 in 2015.
Gas taxes in the Last Frontier are the lowest in the U.S., and Alaskans pay no state income taxes or state sales taxes. While municipalities – generally those without real estate taxes – impose local sales taxes as high as 7.5 percent, the average sales tax is 1.43 percent, according to the Tax Foundation. Anchorage, Alaska’s largest city, has no sales tax. The property tax on the state’s median home value of $257,100 is $3,048. That’s slightly above the average for the U.S.
2. Wyoming
State income tax: None
Average local sales tax: 5.39 percent
Gas taxes and fees: 24 cents per gallon
How does the Equality State continue to rank near the top of our list? Generous revenues from taxes on mineral and energy extraction. Wyoming has no income tax, and its gas tax is well below the national average of 31 cents per gallon. The property tax on the state’s median home value of $199,900 is $1,223, the ninth-lowest in the U.S.
While some states with no income tax make up for lost revenue with higher-than-average sales taxes, Wyoming’s combined state and local sales tax rate of 5.39 percent is effectively the lowest in the U.S. Prescription drugs and most groceries are exempt from sales taxes. And at 2 cents per gallon, Wyoming has the lowest beer tax in the land.
3. South Dakota
State income tax: None
Average local sales tax: 6.40 percent
Gas taxes and fees: 30 cents per gallon
You’ll need to bundle up in South Dakota’s winter, but because you don’t have to pay state income taxes here, maybe you can afford to fly south for a couple of weeks in January.
South Dakota’s combined state and local sales taxes are below average for the U.S. However, while prescription drugs are exempt from sales taxes, food, nonprescription drugs and many services are taxed in the Mount Rushmore State. You can expect to start paying sales taxes on more of your online purchases, too. South Dakota brought the case that led the Supreme Court to overturn previous court rulings that made it difficult for states to collect sales taxes for online purchases. It’s planning to start collecting sales taxes from many out-of-state online retailers on November 1.
Property taxes here are above average for the U.S. The property tax on South Dakota’s median home value of $146,700 is $1,943.
4. Florida
State income tax: None
Average local sales tax: 6.80 percent
Gas taxes and fees: 41 cents per gallon
Florida has no income tax, and its property taxes are below the midpoint for the U.S. The property tax on Florida’s median home value of $166,800 is $1,702.
Average combined state and local sales taxes in the Sunshine State are about average for the U.S., although in some counties the combined rate is as high as 8 percent. Food and prescription and nonprescription drugs are exempt.
Vehicles are taxed at the state’s 6 percent sales tax rate, but a county sales tax (based on where the buyer lives) is due on the first $5,000 of the purchase price or on each lease payment.
5. Nevada
State income tax: None
Average local sales tax: 8.14 percent
Gas taxes and fees: 34 cents per gallon
The Silver State is another no-income-tax haven. Also, the property tax on Nevada’s median home value of $191,600 is $1,478, 16th-lowest in the U.S. Gas taxes are the same as the national average of 34 cents per gallon.
Nevada receives more than $1.4 billion in taxes and fees annually from the casino industry. Still, Nevada relies heavily on sales taxes to pay the bills. The average combined state and local sales tax rate is 8.14 percent. Food and prescription drugs are exempt from the state’s sales tax, but counties may tack on as much as 1.42 percent.
In addition to sales taxes, vehicle owners are charged an annual “government services tax” that’s based on the vehicle’s value and age. The tax on a two-year-old vehicle with an original sticker price of $20,000, for example, is $238.
6. North Dakota
State income tax: 1.10 percent (on taxable income of less than $38,700 for single filers or $64,650 for joint filers) – 2.90 percent (on taxable income of more than $424,950)
Average local sales tax: 6.83 percent
Gas taxes and fees: 23 cents per gallon
The Peace Garden State imposes only modest sales taxes that favor agriculture (new farm machinery is taxed at only 3 percent), and its income tax rates are relatively minuscule, even for high earners. Gas taxes are well below the national average. Food and prescription drugs are exempt from sales taxes. Alcoholic beverages are taxed at 7 percent.
The property tax on the state’s median home value of $164,000 is $1,729, just below the average rate for the U.S.
7. Delaware
State income tax: 2.2 percent (on taxable income of $2,001 to $5,000) – 6.6 percent (on taxable income of more than $60,000)
Average local sales tax: None
Gas taxes and fees: 23 cents per gallon
Delaware’s income tax rate escalates quickly. Residents with taxable income of $60,000 or more (both single and joint filers) pay the top rate of 6.6 percent, and the capital city of Wilmington imposes its own wage tax of 1.25 percent.
There’s a reason Delaware’s Rehoboth Beach outlets are packed even when the sun is shining: The First State has no sales tax. And shoppers are inclined to gas up on their way home because Delaware’s gas taxes are well below average.
Property taxes as a percentage of home value are the fourth-lowest in the U.S. The property tax on the state’s median home value of $233,100 is $1,274, according to the Tax Foundation.
Little Delaware, sandwiched between high-tax states such as Maryland and New Jersey, pulls off this low-tax trick by being a very friendly place for businesses to incorporate, and then collecting fees and taxes from these absentee businesses, whose real operations are elsewhere.
8. Arizona
State income tax: 2.59 percent (on taxable income of less than $10,346 for single filers or $20,690 for joint filers) – 4.54 percent (on taxable income of more than $155,159/single or $310,317/joint) Income levels are for the 2017 tax year.
Average local sales tax: 8.38 percent
Gas taxes and fees: 19 cents per gallon
Arizona’s top income tax rate of 4.54 percent doesn’t kick in until taxable income exceeds $155,159 for single filers or $310,317 for married couples filing jointly.
The property tax on the state’s median home value of $176,900 is $1,367, below average for the U.S. And at 19 cents per gallon, state gas taxes are well below the national average of 34 cents per gallon.
Like most states, the Grand Canyon State excludes prescription drugs and food for home consumption from state sales taxes. However, all 15 counties levy additional taxes, as do many municipalities, and some jurisdictions extend their taxes to groceries. The average combined state and local sales tax rate is 8.38 percent, the 11th-highest in the U.S., according to the Tax Foundation.
While the gas tax is low, car owners must pay an annual vehicle license tax. The tax is based on an assessed value of 60 percent of the manufacturer’s base retail price, reduced by 16.25 percent for each year since the vehicle was first registered in Arizona. The rate is $2.89 for new vehicles and $2.80 for used vehicles, for each $100 of assessed value. For example, for a new vehicle that costs $25,000, the assessed value in the first year would be $15,000 – and the corresponding license tax would be $420.
9. Mississippi
State income tax: 3 percent (on more than $1,000 of taxable income) – 5 percent (on more than $10,000 of taxable income). Income tax rates are being gradually reduced. By 2022, the first $5,000 of taxable income will be exempt.
Average local sales tax: 7.07 percent
Gas taxes and fees: 19 cents per gallon
Mississippi is moving to ease its income tax bite on the lowest-earning residents. Starting in 2018, the first $1,000 of taxable income is exempt from the 3 percent rate. By 2022, that bracket will be completely gone, and the income tax will start at 4 percent of $5,000 of taxable income.
Gas is taxed at 19 cents per gallon, one of the lowest rates in the U.S. Vehicle sales are taxed at 5 percent, two percentage points below the general sales tax rate. Mississippi also charges an annual personal property tax based on vehicles’ age and value. Rates are set at the county level. (In Lafayette County, for example, you’d pay $285 on a vehicle valued at $20,000.)
The property tax on the Magnolia State’s median home value of $105,700 is $841, the 19th-lowest in the nation. Mississippi’s state sales tax rate of 7 percent is the second-highest in the U.S. (only California, at 8.25 percent, is higher), and Mississippi is one of a minority of states that charges sales tax on groceries. But prescription drugs, residential utilities, motor fuel and newspapers are all exempt, and localities add very little on top of the state’s rate, if anything.
10. Louisiana
State income tax: 2 percent (on taxable income of less than $12,500 for single filers or $25,000 for joint filers) – 6 percent (on taxable income of more than $50,000/single or $100,000/joint)
Average local sales tax: 9.45 percent
Gas taxes and fees: 20 cents per gallon
With the third-lowest property taxes in the U.S., the Pelican State is a great place to own a home. The property tax on the state’s median home value of $148,300 is $750. Another plus: At 20 cents per gallon, Louisiana’s gas tax is well below the national average of 34 cents per gallon.
Louisiana’s top income tax rate of 6 percent kicks in at $50,000 of taxable income for a single filer. Louisiana allows residents to deduct their entire federal income tax liability, minus nonrefundable tax credits, from their state income taxes. However, as a result of the federal tax overhaul, most taxpayers are expected to see their federal taxes decline in 2018. That means Louisiana’s deduction won’t be worth as much, and state taxes here will go up. The state has a budget shortfall of more than $1 billion, so lawmakers are unlikely to approve measures that would reduce the tax hike.
Local parishes and jurisdictions can add their own levies to the state sales tax, boosting the average combined rate to 9.45 percent, the second-highest in the country. In some jurisdictions, sales taxes are as high as 12 percent.
About our methodology
To create our rankings, we evaluated data and state tax-policy details from a wide range of sources. These include:

  • Income Taxes
    We looked at each state’s tax agency, plus this helpful document from the Tax Foundation. Rates and brackets are for the 2018 tax year unless otherwise noted.
  • Property Tax
    Median income tax paid and median home values come from U.S. Census’ American Community Survey and are 2016 data.
  • Sales Taxes
    We also cite the Tax Foundation’s figure for average sales tax, which is a population-weighted average of local sales taxes. In states that let municipalities add sales taxes, this gives an estimate of what most people in a given state actually pay, as those rates can vary widely.
  • Fuel Tax
    The American Petroleum Institute
  • Sin Taxes
    Each state’s tax agency as well as the Tax Foundation
  • Inheritance & Gift Taxes
    Each state’s tax agency.
  • Wireless Taxes
    The Tax Foundation
  • Travel Taxes
    Each state’s tax agency, plus a lodging tax study published in 2015 by HVS Convention Sports and Entertainment Consulting.
  • Fiscal Stability
    Each state’s balance sheet gives an indication of what its tax future might look like. We drew on the study Ranking the States by Fiscal Condition by the Mercatus Center at George Mason University.

Copyright © 2018 The Kiplinger Washington Editors; Sandra Block, senior editor, Kiplinger’s Personal Finance; David Muhlbaum, senior online editor, Kiplinger.com

Zero-down loan program aims to expand mortgage access

MIAMI – Oct. 16, 2018 – A new effort is underway to raise the low homeownership rate among underserved groups of homebuyers.

The Neighborhood Assistance Corp. of America (NACA) is hosting several events across the country to help borrowers with low credit scores apply for 15- or 30-year mortgages with cheaper interest rates. One recent event in Miami drew thousands looking for a chance to get a no-downpayment, low-interest-rate mortgage. NACA officials say more than 10,000 potential borrowers have attended various NACA events in cities such as Charlotte, N.C., and Atlanta.

“The low rate of homeownership and number of mortgages for low- and moderate-income people, and for minority home buyers, is a national disgrace,” NACA CEO Bruce Marks told CNBC. “There have been zero foreclosures among the loans that we’ve originated in the past six years.” Bank of America is backing the NACA program with $10 billion in mortgage commitments.

To qualify, borrowers must go through an education session about the program, as well as counseling for budget planning, to make sure they can afford a mortgage payment. They also must submit all necessary documents, including income statements and phone bills.

The program serves only those who are buying a primary residence, not an investment property. The loans for 15- or 30-year fixed-rate mortgages are below market, at around 4.5 percent.

“That’s what’s going to help people who’ve been locked out of homeownership really become homeowners and build wealth,” Marks told CNBC.

However, critics of the program worry that loans with a no-downpayment requirement could carry too much risk.But program officials say buyers have “skin in the game in a real way,” meaning it’s their home and an investment for their family.

“We have seen significant wins in this partnership,” A.J. Barkley, senior vice president of consumer lending at Bank of America, said. “Just to be clear, when we get those loans with all the heavy lifting here, we’re over a 90 percent approval, meaning we actually underwrite the loans for 90 percent of the people who go through this program.”

Source: “Thousands Line Up for Zero-Down Payment, Subprime Mortgages,” CNBC (Oct. 12, 2018)