In California, homeowners are requesting property reassessments. Can Massachusetts be far behind? The NYT reports:
LOS ANGELES – Home owners across the nation are looking to county governments to reassess the values of their homes in the face of flattening and falling prices that have befallen scores of markets. Downward assessments, done at the request of homeowners or pre-emptively by government, appear to be most pronounced in areas where the housing market was exploding just a few years ago, or where economic conditions are poorest.
In Maricopa County, the largest in Arizona, a “large percentage” of the one million single-family home owners will see their houses reassessed at lower rates in February, said Keith Russell, the county assessor. In Phoenix, the largest city in the county, housing prices fell 8.8 percent over the last year, according to the S&P/Case-Shiller index, which monitors the residential housing market.
Among the roughly 200,000 parcels in Lucas County, Ohio, 7,083 owners requested reassessments in 2007, about 10 times the yearly average, said Anita Lopez, the assessor, who ran for office on a campaign to adjust assessments.
“Citizens know the market is slow if not declining,” Ms. Lopez said, “and they are informed and feel comfortable in challenging their county values. People here can’t sell their homes, they have less money, and they don’t understand why the government is asking for more money in a declining housing market.”
Local governments, which rely heavily on property taxes, will have to find ways to replace lost revenue or face having to cut services, lay off staff members or delay projects. The possibility of those losses has alarmed officials in areas already facing large numbers of foreclosures and slumping sales, products, in part, of the mortgage credit crisis that has rippled through the country. [Sunday Business.]
<
p>…in 1987-88 here in MA we saw a rather substantial decline in market prices. IIRC, there was no rather substantial decline in property taxes in MA. Is that correct? If so, I would not expect a substantial decline, this time around.
<
p>One thing that I find annoying is when people come around asking us to sign petitions to put prop 2 1/2 over-rides on the ballots. The only thing that they refer to is “it will preserve your property values” because of the schools! the schools! As far as I can tell, over-rides do nothing of the sort, and I’d rather have more money assured in our accounts sooner rather than a possible profit later.
Towns with good schools do tend to have much higher property values (and taxes) than towns with less good schools. For instance, you can buy a house for much less in Boston near the Brookline or Newton borders than a comparable house across the border. To be honest, I don’t think it is entirely rational since the difference can be so big that often you should be able to use the money you save in a cheaper town on private school, but it does seem to make a difference.
There is no restriction on the amount that the tax rate may change from year to year.
<
p>You’ve mis-interpreted the statement in the first sentence of #2.
<
p>The restriction in #2 is a restriction of the amount of revenue that can be raised. If your town raised $10 million last year, then the limit for the next year would be $10.25 million. Now if there is new development (new subdivisions or condo conversions or major upgrades in existing property), this new development can be added on proportionately. If the new development is worth 5% of the existing base, then the limit becomes 5% higher than the $10.25M, or about $10.8M.
<
p>Now from this, you determine the tax rate by dividing the levy by the tax base.
<
p>What’s important is that there is no impact on the total levy based on the increase or decrease in existing properties. If every property in town doubled in value, then the tax base would be twice as high, and the tax rate would be half as high, which means that each taxpayer’s bill would be the same as before the doubling.
<
p>Now the special case is a catastrophic collapse of the real estate market. In the case of most cities and towns, the real estate value would have to drop by 50% before rule #1 kicks in. In your case, since the last tax rate I saw for Granby was 13.68, the property level would have to drop to 13.68/25.00, about 55% of current.
As you can see, I’m not a numbers guy. I tried to hedge my statements with the conditional mood. I also write for my town and try to keep things simple for some of my readers who are less literate.
<
p>If I understand you correctly, the tax rate and the tax levy are inversely related? Can you explain more to me about why property values would have to drop over 50%?
<
p>Thanks,
<
p>Mark
I’ve been way due to the holiday.
<
p>Actually, it’s the “tax base” and the “tax rate” that are inversely related.
<
p>If property values are $1B and the tax levy is $10M then the tax rate is 1% (or $10 per thousand, as it’s normally expressed). If the property values doubled in the next year to $2B, then the tax rate would have to be cut in half to $5 per thousand. At the same time, the tax levy would be allowed to rise by 2.5% to $10.25M, which would get a final tax rate of $5.125 per thousand.
<
p>Likewise, if property values were cut in half, the tax rate would double from $10 to $20 (and then rise to $20.50 with the increase).
<
p>The kicker is that the tax rate can never exceed $25 in this process. So in this example, if the property values fell by 60% to $400M, the tax rate would become $25 and could never get any higher without an override.
<
p>This is reflected in the history of Massachusetts property taxes since Prop 2 1/2. In most towns, the tax rate had to be cut to get to the $25 limit. When property values started increasing more than the 2.5% limit on the tax levy, the tax rates started falling to where they are today, mostly in the $10 to $15 range.
Certain services, such as Fire & Police protection were cut, as were a number of other services, such as social services, etc. In states with lower taxes, there are fewer services.
<
p>Therefore, the bottom line is this: If we want snow and ice removal and road sanding when winter storms and weather hit, we want pollice and fire protection, we want education and public transportation and the necessary social services, and the upkeep of parks, schools, etc., well….we have to pay taxes. There’s no two ways about that…it goes with the territory, so to speak.
The ballpark figure I always hear tossed around is 2/3.
Thats 2 od every 3 local tax dollars are thrown at the school system. Viva America!
n/m
Health Insurance, Pension and Energy increases in double digit numbers juxtaposed with Proposition 2 1/2 create the current untenable situation in which local governments (incl. school departments) can not deliver level services. Capital needs, infrastructure, educational improvements/expansion of progams and public safety are starved. The local situation has been dire throughout this decade.
<
p>The Administration needs to find some cuts in the largess of state government (perhaps an adjustment to the employer:employee contribution in health insurance like many cities and towns have done on the local level?) and come forward with a House 1 budget that addresses the condition of towns and cities. The Legislature needs to hear (over the casino din) that corporate loopholes need to be closed. Everyone needs to pay their share.
To sum it up in one word: Iraq.
It’s an impossible argument to make that iraq spending has impacted State spending or taxes, but hyperbole-R-Us I reckon.
but that’s my opinion.
<
p>It’s also true that governmental response to Katrina was impacted too, since too many men and women from the military, coast guard, etc, were sent overseas and there wasn’t enough man/woman power for an adequate response. Plus lots of that money being invested in our war on Iraq could/should have gone into helping NOLA rebuild, too, as well as many other things.
Check the proportion of the $22 Billion state budget which is spent on the National Guard, and you will see how hyperbolic your assertion is.
Sorry, but I have to disagree here, Peter Porcupine. There’s really no excuse whatsover for our being in Iraq or for having gone in there in the first place. A lot of our National Guardsmen-and-women have been sent over to Iraq, and the same thing with the Coast Guard, not to mention our soldiers. To make a blunt point: We need them all here, at home…now, and we need to free up some of that money/man&womanpower going towards our Iraq debacle for use here at home,
<
p>Money we could be spending on education, repairing roads and bridges, public transit system improvements, healthcare, jobtraining programs, alternate forms of energy, more medical research, more affordable housing, the Arts–etc. The list could go on and on. I’m sure that if we took 3/4 of our military budget, and freed up that money, it could go a long way.
The original point, is and was that our State tax dollars aren’t significantly going to Iraq. Further, you can’t make the case that the State’s National Guard is stretched because of deployment to Iraq.
<
p>
<
p>That is a good point. Similarly, if you took 3/4 of our domestic entitlement spending and freed up that money back to the taxpayers, it could go a long way.
I think that our war on Iraq really does have an impact on our state budget, and the budget on other states as well. Regarding domestic programs;
we need that money for domestic programs. Our war on Iraq has a substantial impact on that, too.
The horrifically underfunded federal contributions to infrastructure, education, community development block grants (to name only a few items) because we are supporting the Bush/Cheney war, are significant contributors to the fiscal issues on the state and local level.
…putting tolls on the users of the results of the Big Dig project.
<
p>It’s no mystery.
<
p>That’s one way to do it. The only trouble is, however, that the people who commute into from afar and use the city would probably raise Cain. Everybody seems to want something for nothing, particularly nowadays.
The only trouble is, however, that the people who commute into from afar and use the city would probably raise Cain.
<
p>Users of the Mass Pike, the Tobin Bridge and the tunnels have to pay tolls to get into (and out of) the city. Why shouldn’t users of the Big Dig be required to pay tolls, too? They’re the primary beneficiaries of the Big Dig project.
…it does kind of ruin the idea of the Big Dig, which was to accelerate the commute through downtown, something that toll booths wouldn’t really do.
<
p>And even if we threw privacy out the window and forced people to use transponders, the surface streets of Bahston would be filled with people driving around the toll booths to save the dollar.
was to re-route the traffic around town, as opposed to going through
the very heart of town, the way it did prior to the Big Dig.
<
p>The Big Dig (or, to be more accurate, the Big Pig), has been a disaster from the get-go, imho, It never should’ve started.
…increasing the pace of north-south traffic through Boston. What I do care about is that we west of Boston are suffering because of the unwillingness of north-south commuters and others to pay for their transit. The disastrous Big Dig Boondoggle has delayed road and bridge repairs west of Boston for years. The north-south drivers can pay their fair share by paying tolls for the privilege of using the BD product.
<
p>The only time that we go through Boston is to get to the idiotically located Logan Airport. And we have to pay MA Pike tolls, Ted William Tunnels tolls, as well as the ridiculous taxi fees.
You and your put-upon confrères in Wellesley may not care, but we to the north and south outnumber you, and that’s what counts in a democracy. If you can come up with a way to make me pay tolls on 93 in a way that doesn’t obviate the whole idea of the Big Dig (or wreck what’s left of personal privacy), I’m all ears.
<
p>You mention Logan. Out of curiosity, I compared prices for a Boston-Munich flight with a Providence-Munich flight, same day. The results:
<
p>Logan-Munich $369
Providence-Munich $1281
<
p>~~~~
What I don’t say here, I say here.
…as an admission that you believe that it is perfectly proper for a majority to screw a minority, by forcing the minority to pay for the majority’s services? While the majority is not paying their fair share for the services that they are receiving, when they are perfectly capable of doing so? You want your services, but you don’t want to pay for them. An interesting notion.
<
p>I’m not sure where you got your Boston->Munich flight figures from, nor do I know the routes or the airlines involved. I doubt very seriously that Lufthansa, for example, flies out of Providence, so one would have to fly from Providence to either BOS Logan or NY JFK to pick up a Lufthansa flight. Hence the added cost for flying out of Providence. It’s no mystery.
About the airline thing, I just used kayak.com Don’t even know which airline. The differential just stunned me, and it may be something to play with later on. That said, unless a PVD-BOS flight costs over $900, there is something seriously wrong there.
<
p>As for your other remarks, Southeast Mass. has been screwed over by a long line of metroBoston “leaders” from Tom Finneran to Deval Patrick, who can’t seem to find it on a map. Considering the amount of my taxes that go to metro Boston projects, it is I who get screwed regularly for all the infrastructure work the state does for you and your neighbors (and boy, does the West get it big time). The state’s budget tilts heavily toward metro Boston, so in a way it’s not surprising to hear someone from a moneyburb look to screw us over again for “fairness”. If we’re going to do user fees, let’s do it all the way. Let’s have equal per-mile user fees for everything the state does…I know I’d come out WAY ahead.
…your first paragraph (airlines) since you don’t even know which airlines are involved, you are obviously comparing apples with bananas (and I’m being generous). In my experience, short-range flights are considerably more expensive than long-range flights. Depends on the code-sharing arrangements among the various airlines, too.
<
p>…your second paragraph, you continue to admit that you do not wish to pay for the services that you north/south commuters want to make use of. I seriously do not care what Tommy Finneran (Cambridge–North) or Deval Patrick have said. Finneran’s predecessor (the fat guy, whose name I don’t recall) was from the north. DiMasi isn’t exactly an east/west kind of guy. People from southeastern MA may believe that they have been screwed over by the state goverenment, but the least you can do is pay your fair share for the roadways that get into the city. The state has been derelict in its duty to repair overpasses in, for example, Wellesley, for your convenience. And I’m sure that that dereliction is not limited to Wellesley.
<
p>You’re right on that count. I stand corrected on this one. One difference, however: When people drive out of the city via the Tobin Bridge, they don’t have to pay tolls. The outbound ride via the Tobin Bridge is toll-free…and, from what I understand, it seems to work.
Trying to figure out the ramifications of Proposition 2 1/2 is complicated enough that I enter into this with some trepidation. But if you break it down into its simplest components, then there’s really no reason that cities and towns should have to cut taxes, even if property values fall significantly.
<
p>As Mark notes, a city or town can’t tax beyond 2.5 percent of the community’s assessed valuation. What that translates into is a maximum average property-tax rate of $25 per $1,000 valuation. But look around — you’ll see that most cities and towns have tax rates that are half that or even less. Heck, Peabody has a tax rate below $10.
<
p>Here’s what happened. When Prop. 2 1/2 first went into effect in the early 1980s, cities and towns had to cut a lot, since their tax rates were well in excess of $25. Over the past quarter-century, though, property values have risen much faster than the rate of inflation, while Prop. 2 1/2 has held annual property-tax increases to less than the rate of inflation.
<
p>As long as a community is taxing its property at less than 2.5 percent, it can keep raising taxes by 2.5 percent plus growth every year. (This is where folks often get confused. These two “2.5 percent” figures have nothing to do with one another.) Thus, even a huge drop in property values, like 10 or 20 percent, should not have much effect.
<
p>Although I think there should be some provision so that property taxes can keep up with inflation without an override vote being necessary, I also believe my vote in favor of Prop. 2 1/2 was one of the best I ever cast. Very few people deserve as much credit for keeping Massachusetts at least somewhat affordable as does Barbara Anderson.
<
p>BTW, Mark, I think you mean Carla Howell.
There are some communities in danger of having to cut taxes due to the $25/1000 levy ceiling.
<
p>You can see a list on the state’s website. The last column, “Tax Levy as % of Assessed Value:, is the tax levy.
<
p>Monroe: 21.2%
Springfield: 19.6%
West Springfield: 19.6%
Holyoke: 18.9%
Pelham: 18.4%
Heath: 18.1%
Hawley: 18.0%
Wendell: 17.9%
Shutesbury: 17.8%
<
p>The $25/1000 ceiling is a little absurd. Municipal services typically need to be higher when property values are lower. How many cops are needed to make sure the residents of Dover toe the line? How many firefighters in Wellesley are needed to combat fires started by people using space heaters in their poorly-insulated apartments? How many extra teachers are needed for all the non-English speaking students in Chatham? Yet if property values fall by 30%, the towns listed above will have to reduce property taxes.
<
p>Do you think the residents of those communities will be dancing in the streets as their taxes go down by $100 or so but police are laid off, fire stations are closed, and street lights get turned off? Do you think that this reduction in taxes will increase property values in those communities? Will people move there because of the now-lower taxes? Or is it more likely that people will put their houses on the market, triggering a further reduction in property values, and requiring further reductions in service? Will those communities go into death spirals?
<
p>Why are property values currently so low in those communities? Perhaps because few people want to live there because the services pale in comparison to those in other communities with higher taxes? Do people use tax rate when deciding which community to move to? Or do they use service level?
<
p>Remember, when Proposition 2.5 went into effect several communities (Springfield, for example) already had taxes over $25/1000. Springfield had to cut services, even though the taxes in Springfield weren’t among the highest in the state — the tax rate was because property values were low. Would Springfield be in the situation it is now in, with a primarily low-income population, if service levels kept up with surrounding towns?
<
p>If Proposition 2.5 proponents were intent on keeping taxes low, they would have placed a cap on the average tax bill, not the rate. But the groups rallying behind such caps are actually proponents of economic segregation, and what better way to segregate than to mandate that poor people can’t pool their resources to offer better services, but rich people can? Here’s an article by Grover Nordquist’s Americans for Tax Reform group:
<
p>
<
p>”Sorting themselves” is code for “segregation”. It’s clearly the goal of this group.
<
p>Proposition 2.5 is a dumb law. There is already a mechanism to govern property taxes — it’s called “the free market”, and if any community raises taxes too high, people and businesses start to move.
Telling people and businesses they can move if they don’t like the taxes is rather different from telling them they can shop at Costco if they don’t like the prices in Shaw’s. And you don’t say why it’s any “dumber” to hold property taxes to no more than 2.5 percent of assessed valuation than it is to have set rates for taxes on income and sales.
<
p>As for your outlying tax rates, you’ve cherry-picked a few microscopically tiny towns and a few cities that are economic basket cases. If dropping property values become that big an issue, I would hope the state could step in and help.
Holding property tax increases to 2.5% of assessed valuation is dumb (never said dumber than a sales tax) because it does not take into consideration the needs of a community (particularly when those needs change), because when it started, every community was at a different starting position, because it focuses on a rate rather than a total tax bill, and because 2.5 is a completely arbitrary number. (It could have been 1.5, it could have been 3.5.)
<
p>Sure, there is an ability to override, but overrides simply do not work well in heterogeneous communities without a strong singular identity. They tend to fly in smaller communities where everyone is there for the schools, or because they like curbside leaf pickup.
<
p>We shouldn’t be relying on property taxes in general – we should have a more broad-based tax such as an income tax, or money from a sales tax. Better yet, communities should have a broad range of options on the table — diverse revenue streams, so that when one goes down, the others are still there. Communities should have the ability to raise revenue from their strengths, not one method which creates winners and losers.
<
p>However, something like property tax is still necessary to serve as a safety valve — if we relied only on sales taxes, for example, it becomes more difficult to respond to unforeseen problems, such as rapidly escalating fuel costs or a crime wave. It should serve as gravy.
<
p>Regarding the “market-based” control that would control property taxes, while it’s not as easy to move as it is to switch from Shaws to Costco, it is still a check against unconstrained property taxes. There’s this other little thing that keeps things in check — voters. Raise taxes too high and get tossed out of office. That seems to work in the states that do not have levy-limit laws — which, I think, is most states, including a number that are considered to be “booming”.
<
p>Regarding those communities I listed, I did no “cherry picking”, I simply picked all the communities that would be over the cap if we see a 30% decline in property values. I did this in response to other posts that said “this just isn’t going to be a problem”. For the entire state, no, it will not be a problem, but there are a handful of communities for which this will be a problem. And it won’t be a problem because they are “economic basket cases” — it will be a problem because not every community has housing prices that average $750k. There are still some “affordable” communities in this state, but affordability brings with it a severe penalty — mandated reductions in services if the community is too affordable.
<
p>Is it a coincidence that the two states most famous for their tax-limiting laws — California and Massachusetts — seem to be the least friendly towards development and affordable housing? Of course — because of the now-conventional wisdom that any development needs to be at the upper-end of the spectrum, because people living in even $300k houses “cost more in services than they bring in for revenue”.
<
p>And do you really think the state would step in and do some spot-increases in aid to communities hurt by this? I can hear the cat-calls already — “why give those communities more money when you can’t give it to me?”
Telling people and businesses they can move if they don’t like the taxes…
<
p>About a dozen years ago there was an article in the Globe from Acton, but it could have been from anywhere in MA. Rising property taxes were inducing (not driving, inducing) people, like the elderly, who used little public services–no kids in the public schools–out of town. Probably to Florida, but who knows? In FL you can buy a double-wide trailor and pay very little in property tax.
<
p>Who were they replaced by in Acton? People with children who were demanding spaces in public schools for their children, of course. So, as property taxes kept rising, more and more “low cost” (to the town) people would leave, to be replaced by “high cost” people. And, by the way, the revenues from the property tax didn’t come close to covering the full cost of.the public schools, so the town got a double whammy.
<
p>They can, indeed move if they want to. But the town should be careful for what it wishes when it comes to raising taxes on people who can move.
Then the town can tell the folks who yelp about green space and large minimum parcels to shaddap, and get some commercial development to broaden the tax base.
…Kelo. Town governments already can do that, solely to the extent that they are not constrained by state government. As far as I can tell, town governments can “sequester” property as “green space” and then a couple of years thereafter sell it off to developers.
You don’t need to steal property in order to allow development. Many Massachusetts communities– Acton is mentioned above– that struggle with an insufficient tax base could increase the tax base by actually allowing the property owner to develop a parcel for commercial purposes, even if this brings in the riffraff to shop.
<
p>I’m taking a swipe at the protectors of the “character of our town” (whatever town) that would tax existing residents to the point where old-timers are driven out, rather than allowing development, any development.
Many Massachusetts communities– Acton is mentioned above– that struggle with an insufficient tax base could increase the tax base by actually allowing the property owner to develop a parcel for commercial purposes…
<
p>makes no sense. If I own a 1/2 acre parcel of land, with a house sitting thereon, how would I as a homeowner be able to develop a part of that parcel for commercial purposes? Maybe a group of the parcel owners could band together to develop a bunch of parts of 1/2 acre parcels. But, do you know how many 1/2 acre parcels something like Burlington Maul* occupies? A whole bunch. I’m sorry, but, without Kelo it would not be possible.
<
p>I’m taking a swipe at the protectors of the “character of our town”
<
p>Point taken, and that’s one of the things that I have a problem about concerning the opponents of the Middleboro “town meeting” vote to allow a casino there. They, by their vote, made their bed, now let them sleep in it.
<
p>*With due regards to the caption of one of the commenters here.
I hast the need to come up with a subject line.
<
p>There are towns that have large tracts– not 1/2 acre– that cannot be developed because local zoning makes any such development impossible. Proponents of these zoning regs are wont to rhapsodize about the glory of “green space.” Green space is great, but if your town buget is busting, you need tazable property, not green space.
<
p>As for the 1/2 acre, the town that puts a floor on the minimum lot size is making a determination to limit its tax base, because one house on 1/2 acre is less than 2 houses on 1/2 acre. These limits are often far more than is needed to be sure that septic systems aren’t overloaded.
<
p>In summary, I have little sympathy for the suburban towns that make a conscious decision to limit their tax base, and then complain that they have inadequate revenue for their needs.
I hast the need to come up with a subject line.
<
p>is why I use innocuous “subject lines” such as “a couple of observations.” It is not meant to be sarcastic, but I feel obligated to put something on the subject line.
<
p>There are towns that have large tracts– not 1/2 acre– that cannot be developed because local zoning makes any such development impossible.
<
p>Riddle me this. When I grew up in a near-in suburb of Cincinnati in the mid 1960s, we did not have public sewage service. We had “private sewage, which involved various types of systems, and (and this is important) leaching fields. (You’d be amazed at what that did for the folliage.) As a result, the minimum lot siize was 1/2 acre.
<
p>Fast forward to the Boston suburban area. How much of that zoning restriction is due to a festige of the lack of public sewage in earlier days?
<
p>BTW, I’ll refrain from discussing the taxation of property occupied by colleges and esstablishments of religion. We’ve gone through that many times before.
<
p>Isn’t this just a convenient barrier against development? Why can’t such communities build sewage lines? Please don’t tell me “because with 2-acre lots it isn’t dense enough to justify the expense”…
<
p>If communities were allowed to raise revenues via property taxes, sales taxes, and a local income tax, you’d see opposition to development drop pretty quickly. The current scheme is skewed to encourage developments with as few people as possible in the most expensive housing unit possible. And people come up with excuse after excuse to support this paradigm.
…sewage systems normally work
<
p>Why can’t such communities build sewage lines?
<
p>There is nothing preventing them from doing so. But usually sewage lines rely on the fact that water, and the accompanying sh!t, flow downhill. Moreover, the sewage lines are under the streets. So, if the community is in a hilly region, the community would have to provide pumps to pump the waste water and accompanying sh!t to the peak of the next hill so that it can eventually flow downhill to the waste processing plant. It isn’t a simple engineering problem, and that’s one reason why more than a few people have “private sewage systems” and leaching fields.
<
p>If communities were allowed to raise revenues via property taxes, sales taxes, and a local income tax, you’d see opposition to development drop pretty quickly.
<
p>Thank you for repeating something that I’ve pretty much been saying here for almost a year. Although, it’s the undue reliance on the property tax that’s the problem
<
p>Downstream to CMD’s Septic systems and leaching fields, are in my view, often used as an excuse, right along with protecting green space.
<
p>Leaching field, no. Septic storage tank, probably yes, but they have to be pumped out. I forget the name of the septic system that we had in Cincy, but it was something like an “aerator.” It decomposed the waste matter, but it discharged the decomposition into a gully between our lot and the next. I don’t know what my parents (house built in 1957) would have done had there not been a gully–a leaching field? There were two rather major hills between our house and the nearest “main drag” so (with reference to the above) it was unlikely that the area would have installed sewage service any time soon.
<
p>I have little opinion regarding “protecting green space.” The town could encourage development by getting rid of Wellesley Country Club, Wellesley College, Babson, and so forth. But it isn’t going to happen.
Septic systems and leaching fields, are in my view, often used as an excuse, right along with protecting green space. I suspect that many towns maintain a minimum lot size well in excess of the necessary threshold.
…the perennial candidate for the Libartarian Party for everything. It’s hillarious: she starts out with “small government is beautiful” and ends up sounding like “Annie Get Your Gun.”
We all know that our property values and taxes have steadily increased each year. Towns play the numbers game but reassessing home values while maintaining or sometime decreasing the tax rate. But the end result is you pay more tax.
<
p>Does anyone know if house assessments are required to be done every “x” amount of years?
Cities and towns are supposed to certify their reassessments to the DOR every three years. They also keep track of “new growth,” which includes new construction and renovation of existing properties. New growth increases the levy limit outside of the 2.5% cap.
If you survey 100 people, I bet 95 will tell you that a town can increase its revenue by inflating valuations. But that’s false with the minor exception of keeping valuations high to avoid the levy ceiling (which is the focus of this article).
<
p>Proposition 2.5 limits the amount of the increase in the tax levy (the total amount of property taxes collected by the municipality) to 2.5% over the previous year’s tax levy. New construction is excluded from this cap.
<
p>Tax valuations are simply a way to decide the percentage that everyone pays of that tax levy. A city cannot falsely everyone’s values by 50% to collect 50% more revenue. If they did that, the tax rate would have to drop by 50%.
<
p>In fact, although most politicians crow about how they’re “keeping taxes down” when they set the rate, the rate is set by default.
<
p>The tax rate = the levy / the value of all property. Communities with a split rate can affect the amount of taxes shifted onto commercial property, communities that opt for the residential exemption (charging investment houses more in taxes) can affect the rates slightly, and communities can affect the rate by opting to not take all of the 2.5% increase in levy that they are allowed to take, but generally speaking, once the levy and the property values are set, the rate is set too.
In fact, although most politicians crow about how they’re “keeping taxes down” when they set the rate, the rate is set by default.
<
p>That’s interesting. I’ve been involved in municipal politics for quite a while, and I don’t remember anyone from any town (politician or otherwise) ever claim that they are keeping taxes down because the rate dropped even when taxes increase – could you give some examples?
<
p>It would be sad if some officials think the electorate is that stupid. Of course, if they get away with it, maybe they’re right.
Here are some quotes, all from the Springfield Republican. Whenever anyone talks about a “lower tax rate”, except for businesses, they’re crowing about something they have little control over.
<
p>
<
p>Maybe I’m just getting this impression due to the inept reporting on the topic in the Republican — they are the ones that seem to focus on the rate rather than the average tax bill.
Not to mention an argument against direct democracy. If Prop. 2 1/2 was ever worth anything it overstayed its welcome about 20 years ago. At least in my town, I see nothing but damage done as a result. When it first became law my town was forced to close schools before we were ready to. In the late 80s we tried to override and failed, resulting in teacher layoffs, overcrowed classrooms, and cuts in extracurriculars. My town has endured times of closed fire stations and only two police cruisers. If I recall correctly we tried again in 1990 just as I was about to enter junior high school, and failure to do so resulted in cuts in classes. This wasn’t just at the margins either. I actually started eight grade without any History or foreign language. We had several study halls a week to fill the time. This was also the time when my town’s high school was struggling to maintain accreditation, but of course could not fund necessary improvements. In 1992 we were asked to vote on an override in a way that we could choose which things got funded. The library was one line, other lines included police, fire, highway department, and Council on Aging. Schools had four different funding level options. There were nine questions in all and they all got voted down. This resulted in the dubious distinction of being the only town to ever close its public library.
<
p>There have been signs of hope, however. In 2002 we had debt-exclusion questions on the ballot for the library and police station. I chaired the committee which campaigned for passage of these questions, the first time I believe there was really an organized campaign in this regard. I am pleased to say we got 55% of the vote in favor of both questions and we now have the new library and police station that we very much needed. I’d still like to get rid of the law entirely as excessive increases can always be rejected year-to-year at Town Meeting. I understand there is a regressive element to property taxation and would like to see it overhauled entirely at the state level. As long as this is the way municipalities can get money for essential local services I will continue to support the weakening of Prop. 2 1/2.
…then you were never trying to pay a property tax bill that increased 10 -15% per year, regardless of assessment.
<
p>That is where the law came from – an inability for taxpayers to stop excessive spending. It sounds like your town opted to make punitive cuts – happened a lot – to try to force voters to override taxes. Besides closing the library and laying off teachers – were cuts made to town hall staff? To administrative positions? To overtime on DPW jobs? Or were the cuts skewed to the ‘front lines’ to ‘show THEM’ what would happen?
My parents were paying property taxes as were many other parents of school children who I know supported the overrides. (Just because I was young you should not assume I wasn’t paying attention.) I believe there were cuts all around and for the most part my town has never been very administration-heavy anyway. In my town we still have open town meeting (as do, I believe, the vast majority of MA communities). If we didn’t like what our leadership was asking for in revenues in a given year we can always vote it down. If elected leadership is raising taxes more than you like vote against them next time (or run yourself if nobody else will). Prop. 2 1/2 shackles us and limits our potential while not recognizing that the town has grown signficantly. My philosophy in the public sector is we need services, services cost money, ergo – find the money! As Justice Holmes once said: “Taxes are the price we pay for civilized society.”
<
p>It never occurs to us to try an override when times are good because then we don’t feel the pinch. When the economy turns down towns suffer as do families, so I can understand it’s probably the least desirable time to ask for more taxes. We would be more successful maybe if we fixed the roof while the sun is shining and asked for an override during good times. Then it would not hurt as much later on. Some have said that just as the private sector feels the pinch of a bad economy so should the public sector, but I could not disagree more. In a system such as ours where private ownership is presumed, those things we do own publicly are the things that we as a society deem so essential that they must be protected from the business cycle.
Regarding Prop. 2 1/2: I remember when that law came into affect. The people in some communities howled because their police and fire protection had been cut. Is closing down the library and laying off teachers necessarily a good thing? What about the cutting of snow and ice removal and sanding in the wintertime?
Suppose somebody has a child with a learning or developmental disability whose teacher ends up getting fired or the special programs get whittled to the bone or closed down completely? What about public transportation? What about education, the upkeep of parks and schools, etc, and street cleaning? What about people receiving some type of public assistance? One has to really
think about these things while mulling over any tax cuts. It’s also a known fact that Prop 2 1/2 has had disastrous results in many places.
<
p>In communities and/or states with fewer taxes, there are fewer services available, too.
I’ll use this as an example
<
p>When it first became law my town was forced to close schools before we were ready to. In the late 80s we tried to override and failed, resulting in teacher layoffs, overcrowed classrooms, and cuts in extracurriculars.
<
p>What you apparently do not understant is that, if the “town fathers” do not get what they want, they…cut things that are most immediately obvious to the residents. That’s how it works. That’s so that they can try to seduce the sheeple into passing the next over-ride attempt.
<
p>Aside from the fact that “extracurriculars” shouldn’t be part of the school budget in any case, let me tell you. something When I was in public school in OH in the 1960s, if a mil increase (essentially a property tax increase) didn’t pass, we would be required to pay for use of school buses(!), extracurricular activities (sports are not inexpensive, particularly considering the insurance expense).
<
p>You complain that the history program and the foreign language program in the lower grades were cut. I sincerly doubt the former, but we didn’t get foreign language instruction until high school. You poor dear: you were so deprived.
<
p>This resulted in the dubious distinction of being the only town to ever close its public library
<
p>More illustration of the above. Public libraries are warehouses for books printed on paper (an archaic technology). During the two years that it took the town of Wellesley to build its US$42M Taj Mahal that is now the “public library” the books were warehoused in trailors behind the town’s fire department. Directly accessable
<
p>No, Christopher, your town did not have to close its public library.because of the failure of a Prop 2 1/2 over-ride. If the town fathers told you that, they were defrauding you. The building was there, the books were there, and if you wanted a book that was not there it was probably available by inter-library loan. The reason that the town fathers closed the library was because they wanted to force a Prop 2 1/2 over-ride.
<
p>It’s very cynical, but I’ll give you and example from here in Wellesley. Despite our US$8K/year property tax, the town does not provide trash pick-up so we have to either pay private companies to do the pick-up or take it to the dump ourselves (we do the latter). Before the next-to-last over-ride attempt the dump would be open all day every day (except Sundays, half day). After that next-to-last attempt failed, the town fathers, in their infinite lack of wisdom, cut the dump hours in half Mon-Wed, closed it on Sunday. The next over-ride attempt passed. Did they restore the hours? No. Do you know how much restoring the hours would have cost? US$45K, a pittance. And that was after they had bonded US$42M for a Taj Mahal.
<
p>Don’t believe anything that your government officials tell you, merely because they tell you.
My town’s leadership knows darn well that our people are frugal and would never dream of proposing an override unless they could prove it was a proposal of last resort. Let’s go down your list of rebuttals:
<
p>User fees – public school students should not have to pay to get to school; it’s part of the package. As for extracurriculars I was actually not talking about sports for the most part which I believe have some user fees anyway and I agree that they should. I was talking more about band (a credited course on par with the basics) and specialized afterschool and during school programs of a more academic nature. A true education is a lot more than the 3Rs.
<
p>I’m sorry you don’t believe me about history, but sadly it is true (I was there!) and even once the situation got a little better we did not get it more than a couple days a week when it should have been all five. Foreign language should absolutely not wait until high school. The younger you are the easier it is to learn a language and I understand that our town once had language instruction as early as third grade. I still remember vividly the conversation with my 8th grade French teacher (which, like history, we eventually managed to get just a couple times a week) in which she denied my request to be recommended to French II in high school. I got all A’s in 8th grade French, but we simply had not learned enough to jump to a second year.
<
p>The difference between your library illustration and mine is that your town was actually building a new facility. In fact your scenario more matches my town’s following the 2002 debt-exclusion vote that passed rather than the 1992 failed override vote to which I was referring. During the building we too had access to at least some of the library collection housed in a few empty jr. high school classrooms. In 1992, however, the entire collection was locked up in the abandoned library for six months and the surrounding town libraries withdrew their borrowing privileges from my town’s residents. This made doing school projects very difficult to say the least my freshman year of high school. (I had fled my public school system for a nearby private school due to the accreditation problems referenced in a previous post.) As to your snide remark about books, this was 1992 before widespread use of the internet and even now books continue to be published with new knowledge. A growing town needs more space for more books as well as more multimedia resources. The library, more even than the schools, is the great leveler of the town as all residents are welcome regardless of age, literacy level, or side of town they live on.
<
p>I have worked directly with the town’s leadership, especially on the 2002 debt-exclusion campaign and I have seen the numbers myself. Yes, there were criticisms here about “Taj Mahals” too, but the library and police station which we did build are the size we need both for current size and anticipated growth. We are not the small farming community that some of our older residents remember. It is also clear that you are willing to settle for less than I am. I am confident that my town’s leadership is being honest with the people.
public school students should not have to pay to get to school; it’s part of the package.
<
p>It obviusly isn’t “part of the package.” When I was riding on the school bus–and paying for it–there was no instruction going on. Instruction is “the package.” If your parents” wanted to get you to public school, they could have gotten you there.
<
p>I was talking more about band (a credited course on par with the basics) and specialized afterschool and during school programs of a more academic nature. A true education is a lot more than the 3Rs.
<
p>We agree on the last. But if music instruction is considered an accredited course, it should be part of the school day. It was when I was going to school in the olden days (in fact, as I’m typing this, I’m listening to Capriccio Italien by Tchikovski, and, yes, I understand the motifs). If you want to learn how to play a musical instrument when I learned how to play a violin, do what I did: pay a private instructor. If the school is willing to provide instruction during normal school hours, fine, but that’s not “extracurricular.”
<
p>I’m sorry you don’t believe me about history, but sadly it is true (I was there!) and even once the situation got a little better we did not get it more than a couple days a week when it should have been all five.
<
p>Do you know how to learn about history? Read a book. When I was in HS(!) we had what was jocularly referred to as “social studies” classes (American and World history–the latter being nothing more than western European history), which were three days a week, certainly not five. Read a book.
<
p>The difference between your library illustration and mine is that your town was actually building a new facility.
<
p>Since you haven’t identified your town, I have no idea what your town’s library was. Our town’s library was perfectly adequate to warehouse the books, magazines and newspapers that it was warehousing. There was no necessity to build a bigger warehouse. Except, I guess, for the fact that the librarians in Wellesley wanted to “keep up with the Joneses”, Newton and Weston, which had already built their Taj Mahal libraries. An insane concept.
<
p>BTW, regarding A growing town needs more space for more books as well as more multimedia resources. as to the latter, no it doesn’t–have you ever heard of the Internet? As to the former, as a result of Wellesley’s Taj Mahal, the two branch libraries in town were basically closed. Not a big improvement. Apparently you do not understand that the Taj Mahals provide meeting rooms in competition to private operations, which also provide meeting rooms. It’s interesting that you would support taxpayer-subsidized facilities to compete with private operations.
First, just for the record, the town is Dracut (between Lowell and the NH line).
<
p>As to the buses, a philosophical difference maybe, but if we are going to require school attendance (which we certainly should) we need to provide transport. My parents probably could have driven most of the time, but not everyone is so lucky. That being said if I had to choose I’d cut buses before classes, but I’d rather not make the choice.
<
p>The band I was refering to WAS during the school day; like I said it was a credited and graded course on par with the basics. We still had to pony up $50 or $100 (I forget now) at least one of the years I was in Jr. High. I had both in school and private instruction, but whenever you suggest that we pay for something ourselves you are assuming we have the resources. As with transportation, my parents could do it, but not everyone can. Less well-off students should have access to these opportunities as well.
<
p>You seem to see History as an option whereas I most emphatically do not. Believe me, I personally have the “read a book” concept down quite well. I own shelves full of history books at home and used to belong to the History Book Club. History is vitally important, as are other forms of Social Studies, especially Civics. It tells us how we got to where we are and if taught correctly can facilitate discussion about how things could be different. Those who do not remember the past are condemned to repeat it and I certainly don’t think everyone would read history on their own. There again, one needs to be able to afford books and if they can’t they might have to resort to a library…
<
p>…but wait, that’s right, you don’t value libraries either. First, just to be clear, we don’t have branch libraries. We renovated the historic 1922 library which had water damage rendering it basically unusable dating back to Hurricane Bob in 1991 and completely replaced the addition built in 1978. Your use of the term “warehousing” makes it sound like the books, etc. are just collecting dust. I fervently hope (and assume) that is not the case. Our library definitely was getting overcrowded, with some material in a small lobby, and too little room between shelves, especially for a wheelchair. Yes, the library is also a community center which does have a meeting/program room which I believe can be used by outside groups. The old one had such a room as well, but we had to move books in there following Hurricane Bob making it nearly impossible for the library to put on programs. It also serves as a polling location and venue for public meetings.
<
p>As to your point about the Internet, that too is a reason for a library to be up-to-date, as once again not everyone has access at home. Those of us with dial-up (DSL isn’t available and cable is expensive.) use it for some functions also. You seem to think the Internet can give you everything. There is still a place in this world for books otherwise Barnes & Noble and Borders would be out of business.
<
p>The difference in our perspectives it seems can be summerized thusly: You assume that people can access what they want/need on their own. I want to guarantee that everyone in the community regardless of wealth has access to the best educational resources and opportunities via the schools and library.
<
p>I know where Dracut is. From 1980 to 1983, we lived in Tewksbury, so we know where Lowell is, too,
<
p>As to the buses, a philosophical difference maybe, but if we are going to require school attendance (which we certainly should) we need to provide transport.
<
p>The issue that you seem to wish to ignore is the question of who should pay for it, and how it should be paid for. Presuming that we are in an era of limited resources (and we are always in such an era), where would you have taken the resources from to provide transportation to you? You have been complaining about middle school band and unavailability of foreign language instruction. But when I was in school in the dark ages, we had no music instruction or foreign language instruction until high school. Poor dear, you were so deprived.
<
p>You seem to see History as an option whereas I most emphatically do not.
<
p>Horse manure. Follow the discussion. (What did they teach you at the Dracut school system?) The issue was never whether, but when, history was taught, and the resources that were devoted to it. HS was when we were taught history, particularly in some detail. Jr HS was not. BTW, I was not flippant when I wrote “read a book”; you can learn a lot more history by reading a book than relying on someone else to spoon-feed you information.
<
p>but wait, that’s right, you don’t value libraries either. First, just to be clear, we don’t have branch libraries.
<
p>More horse manure. What in heck do you believe libraries are? They’re book warehouses. Home Depot is nothing more than a warehouse. They allow you go browse, pick out a tool–or book, and take it home to use or read. You do not need a Taj Mahal to do that. If you want to have a “community center” debate it and put it on a separate budget and charge for its usage.
<
p>Um, relating to your paragraph that begins with
<
p>As to your point about the Internet, that too is a reason for a library to be up-to-date, as once again not everyone has access at home.
<
p>No, aside from the fact that keeping a “library up to date” is completely ambiguous..
<
p>Those of us with dial-up (DSL isn’t available and cable is expensive.) use it for some functions also.
<
p>Move. I used Dial-Up for over a decade, up until a year ago. And the only reason that I got FIOS was because it was difficult do download PDFs of Der Spiegel.
<
p>There is still a place in this world for books otherwise Barnes & Noble and Borders would be out of business.
<
p>I do believe that this makes my point. You acknowledge that libraries are places for books. Not computers, not community centers, but books. Fine. We have 30 boxes of books in our basement here, completely categorized and indexed. If you are suggesting that I devalue books, you are quite wrong.
…and yes, I realize your “poor dear you were so deprived” comment now and previously was intended as sarcasm, but I actually mean it. It sounds to me that where you went to school they only taught the most basic things until you got to high school. Again we’re down to philosophical differences and what you describe (and even yourself call “the dark ages”, which I realize you probably mean mockingly but sounds about right to me) is to me simply unacceptable. I can’t prove it; it is a matter of opinion, though an opinion I hold quite strongly.
<
p>I can see you value books as demonstrated by your boxes in the basement, but that still means you own them. I am in complete agreement that you can learn alot more by reading than you can in school. When it comes to history I know I certainly have. What I’m not sure you value is universal access. What about those who cannot afford the ton of books that you and I have? Access to educational resources is the ticket to individual and collective advancement.
<
p>This is why libraries and schools are so important. Classroom instruction is necessary as not everyone is going to take the initiative that you and I have, but the subject is still important. Libraries are the great leveler even more than schools. You have access to its materials regardless of age, socio-economic status, or literacy level. I DO believe that libraries are intended to provide books, multimedia technology, and program space. All of this was part of the deal in 2002 and the voters knew it. There is no need for a separate community center debate and a separate building would be even more expensive. Keep in mind too that there was state money available which might not have been again for ten years. The building needed to be replaced sooner rather than later. State law also regulates the size of public libraries and what needs to be made available.
<
p>Finally, don’t tell me to move. This is the town I have lived in almost all my life. I have every right in the world to try to make my hometown a better place to live and raise a family. Moving is certainly a lot more expensive than paying more property taxes to the tune of about $1.00 a day, which is what the 2002 questions cost the average property owner. Rather than concede, as you do, that we almost always live an era of limited resources, I prefer to lay out a vision and find ways to fund it. Ultimately, we need to find a completely different way to do this anyway, but as long as this is where the money comes from I will support this method of getting money.
Coming from a town with a more or less functional town meeting and an above average willingness to consider overrides, I see the housing bust as problematic just because it means many people will have a hard time making rising mortgage payments with falling home equity, let alone raising the ante on property taxes to fill in for a pinch in state revenues.
<
p>It’s a pity Alan Greenspan coaxed so many people to get into adjustable rate mortgages. One of the most irresponsible things a federal reserve chairman has ever done.
<
p>Declining real estate values may make the state’s school Chapter 70 funding formula rather volatile this year. Don’t think I’ll speculate about that further until the governor’s preliminary budget numbers come out next month, though!