Friday, January 2, 2009 10:09 PM CST
OUR VIEW: 'Business-as-usual' prevails in tax levies
The real estate tax levies for 2008 are in, and it appears that business-as-usual logic prevailed rather than making any allowance for the economic times in which we live.
Many taxing bodies approved what sometimes are called “balloon” levies, in which the levy swells well beyond what a board expects to receive.
The balloon allows taxing bodies to receive every possible dollar should real estate assessments increase.
Occasionally, rising assessments in a taxing district have the effect of bringing a tax rate below its maximum, which spreads more modest increases in revenue across a larger base, and thus allows some property owners to save a few dollars. Balloon levies prevent this from happening, and use the larger base to further increase revenue.
We are not arguing here the merits of relying on real estate ownership as the vehicle to determine local taxes that are important parts of many budgets.
It is unfortunate, however, that most all local taxing districts seem to have the same attitude toward levies regardless of how the larger economy is treating the property owners who are paying the bill. That attitude is one of entitlement to every dollar that can be collected when tax bills go out in 2009.
To justify that attitude, leaders of taxing units point to increased costs for payroll, health insurance, programming demands, utilities and any number of other areas. They point out the number of people affected by their service, and the strong need for funding.
We would agree that local taxing bodies, by and large, provide valuable services that are worthy of our support.
We would suggest, however, that the current economic climate calls for an attitude adjustment away from considering tax revenue as an entitlement to pay the obligations for expenses. Not every good idea should be implemented and sometimes budget considerations demand reconsideration of existing expenses.
Now would be a great time to find ways to cut back. That means looking at ways to cut budgets, including not filling some positions, delaying implementation of some programs and/or scaling back others.
It makes sense that government leaders should recognize trends in the broader economy, and adjust spending appropriately. That attitude should come through when setting things like property tax levies.
We want to know that government leaders (and those who work in the public sector) recognize they are part of the larger economy.
— JG/T-C Editorial Board
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Tom Andres wrote on Jan 2, 2009 10:57 PM:
I only wish the Editorial Board had gone further, with names of those who exploit taxing methodology and perhaps a few specific examples of potential cuts in government-provided services and delays in capital projects.
Maybe the Editorial Board could offer a Part Two, Part Three, etc, until these taxing bodies (and the taxpayers) get the message. "