[Speed Gibson,
Sunday December 4, 2005 at 10:37pm]
More Property Tax Reform We Can't Afford
Maybe you're old enough to remember the Minnesota Miracle circa 1971. We made a deal with the devil, enacting a sales tax to pay for education and property tax cuts. The sales tax was just 3%. Today it is 6.5% or more depending on where you live, and it applies to many more items than in 1971. To be fair, equalizing school funding was its most stated goal, but the fact remains that this was our first attempt to buy down property taxes.
As might be expected, school district spending exploded, freed from more careful local control. Freed from a big chunk of the education costs, these once careful locals now could also raise spending dramatically. That, the business cycle, and politics once again have property taxes near the threshold of pain. Both parties are talking about it next year.
An honorable state government would repeal the health impact fee that it turns our we never needed. But now it also will be used for property tax relief. I'm also wondering just what the Ventura Administration implemented in "taking over" a big chunk of education funding. You couldn't tell looking at my property tax bill.
We have over 30 years of history now regarding property tax relief / reform. It simply doesn't work. All that each buy down has done is given the locals room to raise taxes back to that level. It's like raising the Federal debt ceiling.
The only way we'll get real property tax reform is to restrict property taxes to property-related spending. If you own more property, you need more police, fire, water, sewer, streets, parks, and most related city departments. You can also make an argument that a more expensive house's owner should pay more. You're more likely to be burglarized, for example.
Education, welfare, and probably courts are not property-related. They should not be funded by property taxes. Indeed, the buildings they build or occupy should pay property taxes, too. There should be no exemptions or exceptions, not even for religious or chartible organizations.
Beyond that, the property tax becomes a wealth tax, as Joe Soucheray sort of noted a couple of weeks ago. He read a story about residents in New Hampshire saw a line on the assessor forms for the "view" of the property. You have a nicer view, you pay more taxes. Like its big brother the estate tax, it is profoundly un-American in concept and should be repealed.
Yes, our income and sales taxes will go up, but it better puts the responsibilities where they belong.
UPDATE/CORRECTION: My memory of 1971 is faulty, per the excellent substitute hosts and guests on Taxpayers League Live this past weekend. The sales tax had already been established. The Minnesota Miracle raised it from 3% to 4%.
As might be expected, school district spending exploded, freed from more careful local control. Freed from a big chunk of the education costs, these once careful locals now could also raise spending dramatically. That, the business cycle, and politics once again have property taxes near the threshold of pain. Both parties are talking about it next year.
An honorable state government would repeal the health impact fee that it turns our we never needed. But now it also will be used for property tax relief. I'm also wondering just what the Ventura Administration implemented in "taking over" a big chunk of education funding. You couldn't tell looking at my property tax bill.
We have over 30 years of history now regarding property tax relief / reform. It simply doesn't work. All that each buy down has done is given the locals room to raise taxes back to that level. It's like raising the Federal debt ceiling.
The only way we'll get real property tax reform is to restrict property taxes to property-related spending. If you own more property, you need more police, fire, water, sewer, streets, parks, and most related city departments. You can also make an argument that a more expensive house's owner should pay more. You're more likely to be burglarized, for example.
Education, welfare, and probably courts are not property-related. They should not be funded by property taxes. Indeed, the buildings they build or occupy should pay property taxes, too. There should be no exemptions or exceptions, not even for religious or chartible organizations.
Beyond that, the property tax becomes a wealth tax, as Joe Soucheray sort of noted a couple of weeks ago. He read a story about residents in New Hampshire saw a line on the assessor forms for the "view" of the property. You have a nicer view, you pay more taxes. Like its big brother the estate tax, it is profoundly un-American in concept and should be repealed.
Yes, our income and sales taxes will go up, but it better puts the responsibilities where they belong.
UPDATE/CORRECTION: My memory of 1971 is faulty, per the excellent substitute hosts and guests on Taxpayers League Live this past weekend. The sales tax had already been established. The Minnesota Miracle raised it from 3% to 4%.