Which of the following can influence property tax rates?

Local government budgets play a crucial role in influencing property tax rates. Property taxes are primarily a source of revenue for local governments, funding essential services like schools, public safety, infrastructure, and community services. When local governments establish their budgets, they determine how much revenue is needed to meet their expenses. Consequently, if the budget rises due to increasing costs or new projects, property tax rates may also increase to generate the required revenue. This direct correlation makes local government budgets a fundamental factor impacting property tax rates.

In contrast, while other factors mentioned like the weather, square footage of properties, or real estate market hype may affect property values or market dynamics, they do not have a direct and systemic influence on how tax rates are established by local governments. Weather can affect property values but does not govern tax policy; square footage impacts assessments more than rates; and while market hype may spur demand or affect values, it does not directly dictate the tax levies necessary to fund local services. Thus, the local government budget stands out as the principal influence on property tax rates.