Posted on 02/23/2005 7:32:04 AM PST by ReagansRaiders
Budget proposal includes real estate tax rate cut
By CHAD UMBLE cumble@potomacnews.com Wednesday, February 23, 2005
Prince William County's proposed fiscal year 2006 budget includes a 14 percent cut in the real estate tax rate, but most homeowners will still pay higher taxes since the value of homes rose by an average of 23 percent over the past year.
On Tuesday, county executive Craig Gerhart unveiled the tax-rate reduction for the Board of County Supervisors as part of his proposed fiscal year 2006 spending plan.
The plan includes a 14.6-cent reduction in the real estate tax from $1.07 to 92.4 cents. The fire levy would drop from 6.6 cents to 5.69 cents in Gerhart's proposal.
(Excerpt) Read more at potomacnews.com ...
What a misleading headline. If you cut tax rates but raise assessments, taxes still go up. Ridiculous.
I was just going to ask how they were going to make up the tax "cut"
Gotta be careful when government drops property taxes and or assessments. It has, in other instances, been a precursor to "eminent domain" property grabs. A lower assessment makes property setlements cheaper for the usurping agency.
</tinfoil beanie>
Top sends
What a crock! If the reduced the tax rate by 14%, you can bet that it probably could have been reduced by 20%. Policticians, Republicans and dem scumbags alike, will ALWAYS spend as much as they can and NEVER try to be fiscally responsible. Sure, you may get one guy for a short time but even he will eventually want to be a big spender using tax revenues.
All it says is that the tax "RATE" is going down, not the tax liability. If I still lived in Alexandria, they would have kept the rate at the same level and really screwed me. My tax liability is going up, but nowhere near as much as it would have without the cap and the reduction in the rate. In 5 years, my home value has tripled....
I wish our Loudoun County officials would get a clue. Our assessments are going up anywhere from 25-40% a year, while our "Republican" BOS members practically dislocated their shoulders patting themselves on the back for cutting the rate by 1/4 cent last year from 1.11 to 1.1075, and now three cents this year. I'd love to see a 15 cent decrease!
It's The Spending, Dummy!
Has the budget gone up? Has the taxable portion gone up and has it gone up at a greater rate then new economic development will cover?
It's The Spending, Dummy!
Has the budget gone up? Has the taxable portion gone up and has it gone up at a greater rate then new economic development will cover?
Hello, it's just like income taxes. If your income goes up, your taxes go up, even with a flat tax. Do you call THAT a tax increase? Waaaaaaaahhh, waaaahhhhh, I made more money, my house appreciated, I'm richer now I have to pay more taxes!
Some parts of South Florida have a 3% cap on yearly property tax increases.
JohnnyZ has it right. Good analogy. (And thanks for bringing up the flat tax, as Steve Forbes' Deputy Campaign Counsel in '96, I appreciate any mention of his signature issue.)
After hearing what has gone on in Loudoun County, I'm glad that my wife and I didn't build there! Beautiful place, but that's not much of a rate cut at all and I can only imagine the increase in home values there.
Spending has gone up in the county, but it has pretty much been kept down to the level needed to sustain the population explosion in the county.
Now if we can only figure out how the *county* can get rid of the car tax since the state won't be doing it anytime soon and the tax is really a county tax that the state pays a portion of on behalf of residents.
You're comparing apples to oranges. The county is obviously touting the fact that they have reduced tax rates, while the other hand is raising the assessments that the tax rates are based on. It's called bureaucratic slight of hand.
I have no problem paying my fair share. I have a problem with government telling me they're doing me a favor when they're not.
If you have a problem with that, tough.
It's the same as income taxes. The tax base goes up, tax revenues go up, they lower the tax rate a little and everyone accepts that it's a tax cut -- because it is a tax cut.
I think that, in general, additional property tax revenue should be offset by reducing the tax rate proportionally, so the average taxpayer sees no difference while others see a modest increase or decrease. That's what my co commission did last time around.
But if your tax rate goes down, that's a tax cut. Maybe you're getting cheated because the govt is spending too much and not giving you ENOUGH of a tax cut, but it's still a tax cut. Property at the same value pays less after the rate reduction.
So, since they are saying that most homeowners will still pay higher taxes since the value of homes rose by an average of 23 percent over the past year” I assume that to mean that the property assessments (this is, the county’s declared value of each property on which the tax is assessed) also went up. So, in this case, if your tax rate goes down, your taxes do not necessarily do so, because the property value on which they are assessed has increased. So your “But if your tax rate goes down, that's a tax cut” is not correct in this case, and they say so right in the article (“homeowners will still pay higher taxes since the value of homes rose by an average of 23 percent over the past year”).
(P.S. How's the recital coming along?)
Like I said, it's the same as income taxes. You double your income and they lower the tax rate, you're still paying more $$ -- but that's because you're making more money.
If you're making 40k one year, and 50k the next, your taxes go up. Did the government increase taxes? No, your taxable income rose. If the govt cuts the tax rate, you're getting a tax cut because you're paying less than what you would have paid at the previous rate -- NOT necessarily "less than what you paid last year", because last year's taxable income (or "property value") was different. "But my taxes went up!" -- well of course they did, your taxable income went up. That's how percents work -- 25% of 50k is more than 25%, or even 30%, of 40k.
If your house is worth 300k one year and 330k the next, your taxes go up. Did the government increase taxes? No, your property value rose.
.............. I'm not saying you're getting some kind of screamin' deal out of this. If they cut the tax rate but not by as much as they SHOULD cut it (which is S.O.P. for county boards), I agree that you're getting screwed. Just because the tax base grows quickly doesn't justify the govt growing quickly along with it, especially if the growth is just appreciation of existing property rather than new construction of homes and businesses that require govt services.
Two items here. First, home values may go up on average 23 percent, but the increase in assessments has been capped by the county at 5.9 percent. Second, assessments are based upon the free market and what similar homes have sold for in your immediate area in the past year, so it is not some completely arbitrary number being issued by the government. It just so happens that it is a hot real estate market right now in the area. Assessments can theoretically go down, but if the free market is pushing your home value down, it is time to move someplace else.
I have served as my township tax collector for twenty-two years. Among other taxes, I collect both township and county real estate taxes. I have seen countless real estate tax rate increases, only one rate decrease, and three countywide property reassessments. The countywide property reassessments have each cost the taxpayers millions, and their primary purpose is to eventually allow the county and local taxing jurisdictions to increase tax revenues (as opposed to the claim that reassessments are performed in order to ensure ‘fairness’ among assessed property values. That lofty claim is a crock, because the desired 'fairness' could be obtained in other ways that don't involve such enormous expense, in dollars or man hours).
The fact that citizens have been programmed to assume that, as the tax base valuation (i.e., the total assessments for all properties within a taxing district) increases, so naturally should tax revenues also increase, is ludicrous.
Is it written somewhere, either in federal, state or local law or ordinance, that the taxes to be collected by a taxing jurisdiction should be based on (1) the taxpayer’s ability to pay them or (2) the amount of the taxpayers’ income or the value of his possessions?
No to both! Taxes levied (real estate taxes especially) are supposed to be reflective of the financial needs/expenses of the taxing jurisdiction – completely independent of the collective ability to pay of its taxpayers, or the value of their possessions.
When assessed property values increase, real estate tax revenues also increase. But, more often than not, the money required to maintain the taxing jurisdiction does not increase proportionately. The result is a surplus. So the logical response would be to decrease the tax rate. But that rarely occurs. What generally occurs instead is that the taxing jurisdiction increases its ‘expenses’ (by increasing employee salaries and benefits, modernizing, upgrading, expanding government programs, and generally increasing government budgeting and spending).
My point is that the bottom line in taxation should depend on the (prudent) financial needs of the taxing authority, not on the collective affluence of the taxpayers (and resulting increased confiscatory power of his government).
Anyone who argues that income increases, or increases in property values, should automatically proportionately increase tax revenue is embracing a quasi-socialist redistribution of wealth philosophy – not a responsible republican taxing philosophy. Because such a mindset simply has served, and continues to serve, to increase the scope and power of government at all levels – which needs to be recognized as one of the deadliest enemies of our individual liberties.
~ joanie
(Steve, will answer your rectial question when I’m not working about half a bubble off plumb. :)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.