Reacting to home property tax

Following all the complaints about the latest tax code changes that resulted in some outraged taxpayers at the recent tax workshop, today the county council began the process of considering a raft of new bills that attempt to mollify the uproar.

Today's meeting agenda introduced several bills taking various approaches. I won't attempt to summarize but the titles provide a very general idea what it is about. There's a bill by bill breakdown in a sidebar in TGI coverage.

• PDB No. 2554: Real Property Tax Relief for the 2014 Tax Year
• PDB No. 2555: Real Property Tax Relief Funding
• PDB No. 2556: Reinstating the Permanent Home Use Tax Limit
• PDB No. 2557: Low Income Tax Credit
• PDB No. 2558: Retroactive Real Property Tax Measures and Extensions
• PDB No. 2559: Tax On Use (instead of tax at highest rate use, proportionate tax by % use)

The Funding bill (2555) allocates the money from reserves to make up for the lost revenue from whatever taxpayer's bills the council chooses to reduce. The rest are all schedules at tax relief for taxpayers impacted by the recent tax code changes, capping the increase, restoring some relief measures that were removed, or generally undoing the whole thing (which would have the effect, it was noted, of  re-raising taxes on many taxpayers that benefitted by the latest changes).

One point I wished I could make to the council that seemed terribly obvious to me -- before attempting to fix the tax code, please clearly describe what problem there is that so desperately needs fixing. Recently at the tax workshop we heard from many disgruntled taxpayers that their taxes were too high. When asked what classification and exemptions they had and so forth, I don't believe any had those details. There were suggestions that filing the right forms would fix everything but it was all speculation. How about follow up with those people, reporting if their tax situation was actually fixed or not? Are they happy now or not?

I think we should let each council member pick one homeowner property (anonymously) as an example and show us the actual before/after tax computation, tell their story, and make the case this is fair or unfair. While of course we need things to be fair for everyone, at least we can easily get a handful of cases where the current system is grossly failing that would exemplify the problem. Instead, we just have vague accusations of problems but zero details, no examples.

How are we going to fix the problem if we have not clearly defined the problem?

And remember, the premise is that the budget be balanced so whatever tax bills are reduced, that money will have to come from somewhere, probably reserves unless we raise other people's taxes too (which I think will lead to double indignation: once you get handed a tax break, nobody is going to give it up as if it never happened). 

It was good to see Bill Asing (long time county council member and former mayor) testify since he was part of so much of the history of the system that brought us here, yet I was disappointed that mainly he read excerpts of recent council member statements why they were voting "No" on this latest tax code change. And he offered no ideas other than he didn't like what had been done. He said he did not have enough information but did not mention what information he wanted to have. So with the extraordinary extra time to speak he was granted, I got nothing from it.

Several council members suggested we get "tax experts" to study the situation and advise council, but they did not name anyone nor even suggest what qualifications might be necessary. It seems to me that understanding and legislating taxes is an important part of the job council members are elected to perform, so leaning on "experts" strikes me as the wrong approach. How are council members going to make the actual decision responsibly if they are so dependent on whatever experts tell them?

The chair raised an interesting point, corroborated by Steve Hunt the finance director, that this recent tax code change is being closely eyed by the folks who rate bonds. Since Homestead classification makes up 29% of the tax base, yet with all the exemptions and tax breaks given to homeowners, generates about 10% of the revenue, this is viewed as a structurally weak system. To the extent the cap held down homeowner taxes, that would have the same issues.

Different council members are still saying different things about this. Opponents of the recent tax code changes are more or less saying, "told you so" as more talk of unfair taxes continues to be heard (but never with full detail). Proponents continue to defend the tax code - possibly with a little tweaking - and say that all the outcomes were predicted and explained before its passage, denying that there is a real problem at all. Nobody has identifying anywhere the administration projections were off by much. Again, it seems that hard facts and clear problem definition are desperately needed - and if the council skips that step they will be going in many different directions, each attempting to solve the problem they perceive.

Next meeting on all this is slated for September 24.