I find the discussion of increasing real estate taxes to be symptomatic of how we deal with financing our government. There is a lot of discussion by taxpayers concerning should taxes be progressive, should there be caps on increases, should those who buy condemned properties and restore them be burdened with signifcant tax increases when their work is completed, should elderly people pay any increases after they reach age 65?. The missing question, not being discussed, has become an assumption. That assumption, that it appears we have all made, is that if our property values go up our taxes should go up at the same rate. The missing question is simple. What does the increase in my real estate have to do with how much money the government needs?
Understand that I am not against paying an appropriate tax. I am not even against raising taxes (beyond inflation) if need be. But how does the fact that my real estate value goes up lead to the assumption that the government needs more money in some way proportional to that increase? Assume that my home went up in value by 10% one year, 15% the next. Does that mean government spending needs to go up 10% and then 15% the next? Assume the market determines that prices went up to fast and they decline 10% in a bit of market deflation. Does that mean government spending should go down 10%? Lets look at the question in a diferent way. If my house value increases 10% in one year, does that mean I should pay 10% more to Minnegasco for my gas? Does that mean I should pay 10% more to Excel? to the water department? Does that mean I should pay 10% more to anyone? Not at all. It simply means that some unknown individual has determined that I have an asset worth more this year than last. Next year the asset value might go up a little, it might go up a lot, it might go down, there is no way to know. Why is this a concern? I believe that politicians have been looking at the increasing valuation in Minneapolis and feeling that they can spend money, money that is not yet being collected based on todays valuation, but money they predict will be available in the future if valuations continue to increase. I have heard the argument in City Hall that essentially says, we (the city) have helped create higher housing values through our government actions, therefore the city is entitled to our percentage of the increase. The other problem is that politicians want to make their mark on the city. They want to make it today. I suppose that is appropriate and not to be unexpected. Mayor Belton led a city in the early nineties that faced some significant problems. She needed to do more than just fix potholes. I believe the temptation becomes too great however to keep dipping into future projected income streams once the politcos figure out how it works. To make the biggest splash, to create the largest signiture projects, you not only need to defer costs until future income increases hit, it also becomes necessary to defer basic ongoing costs that will not easily be noted for awhile. Who really pays attention if we only replace 2.5 miles of roads instead of the 10 that need replacement. Consider the proposed property tax form for 2002 that was recently receieved by taxpayers. What you are paying for Library Board does not yet include the bonds for new libraries. That will be phased in. Money to pay for operating the new libraries? No plan for how to pay that yet. Will be phased in later. Park Board does not include the full levy for its increase. That will be phased in. The City Tax does not include paying back the Internal Deficit Fund. How many people understand an Internal Deficit Fund anyway. That will be paid back with future surpluses, when they come. The City Tax does not include enough money to adequately pay for roads, bridges and our Public Works infrastructure, that has not even been scheduled to be phased in yet other than a diminished attempt to cover a fourth of the estimate shortfall. What needs to be done? Lets start by being more realistic with what our city government can and cannot do. Before spending additional dollars lets make sure that first of all we are paying for what the base needs of government are. Lets be more realistic about spending dollars today that we hope to pay back with tomorrow's tax increases. Lets ask more questions of our politicians before we automatically give them more of our tax money each year. Bob Gustafson MMM __________________________________________________ Do You Yahoo!? Yahoo! GeoCities - quick and easy web site hosting, just $8.95/month. http://geocities.yahoo.com/ps/info1 _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
