Patrik Jonsson
Staff writer of The Christian Science Monitor
Wed Mar 8, 3:00 AM ET
"Not even the IRS is so bold as to tax people on unrealized gain," says Mr. Lindsey. "These are essentially backdoor tax increases that give government no incentive to be efficient or responsive."
Robb
Republic columnist
Mar. 3, 2006 12:00 AM
For years, Arizona politicians have played a con game about property taxes.
They would hold the line on property-tax rates and claim not to be raising taxes. They would then pocket and spend the additional revenue brought in when those rates were applied to increasing property values.
That gig may be on its way to being over. The shock of the huge increases in property valuations being handed out by county assessors across the state has focused public attention on the true relationship between property values and taxes.
The con game has been quite a moneymaker for local governments. If the property-tax rate remains the same and property values increase by just 10 percent a year, property-tax collections double in about seven years.
When value increases are incremental, it's easier for politicians to get away with the con about holding the line on rates. It also enables them and others to imply, as the proponents of the Phoenix bond election are now doing, that debt doesn't cost anything. We'll hold the line on property-tax rates, goes the pledge. In reality, that means that taxes will go up as property appreciates.
Rick Lyman
New York Times
Feb. 19, 2006
http://www.azcentral.com/arizonarepublic/news/articles/0219taxes0218.html
BOISE, Idaho - Last year, when Charlotte Snow's 33 acres on the edge of Boise's creeping sprawl was reclassified to residential property from agricultural, her taxes rose to $10,871 from $2,200.
Soaring home prices, shifting population and sporadic budget crunches have combined to make property taxes one of the thorniest sources of voter anger and legislative angst in dozens of states.
"There is a lot of interest in property-tax relief across the country," said Bert Waisanen, who studies tax trends for the National Conference of State Legislatures. "A lot of states have either recently enacted or are considering a variety of mechanisms, often aimed at finding relief for senior citizens and low-income homeowners who get swamped by rising property values." advertisement
A handful of state legislatures are grappling with the matter right now. In Texas, legislators are under a June 1 deadline set by the state's Supreme Court, which ruled that the current property-tax system is unconstitutional.
A mishmash of proposals is being considered by Indiana legislators to stanch rising voter anger over rising property taxes, including proposals to raise other taxes.
In South Carolina, legislators are debating whether to let voters decide in a November referendum what to do about rising property assessments.
In Nevada, where legislators voted last year to limit the annual rise in property taxes to 3 percent, school districts are at least thinking smaller. Last month in Washoe County, which includes Reno, administrators shelved plans for a $95 million technical high school and the expansion of several existing schools until the full impact of the new law can be measured.
Two years ago, the Pennsylvania Legislature passed a law legalizing slot machines, whose revenue was to offset property taxes, but three-fourths of the state's school districts decided to opt out of the plan.
Tax experts speak of the "three-legged stool" on which most state tax revenues are based, a mix of income, sales and property taxes. What has happened, as a result of booming house prices, they say, is that the property-tax leg of the stool has grown disproportionately long, putting a highly noticeable burden on homeowners. And what makes property taxes even more politically delicate is that they are often a state's prime source of public-school financing.
Idaho is one of the states where the complaints are fiercest, and the Legislature is expected to adopt some changes this year.
"The whole question is, why do I have to sell my home because the taxes went crazy?" Snow said. "All I've got is a rundown barn in the middle of Idaho."
Activists in 20 States Push
Legislation, Citizen Ballots
Or Lawsuits to Gain Relief
By RAFAEL GERENA-MORALES
Staff Reporter of THE WALL STREET JOURNAL
February 1, 2006; Page B4
http://online.wsj.com/article/SB113875751479861656.html
LEXINGTON, S.C. -- Becky and Don Fagg would love to retire and spend more time with their two grandsons fishing on the lake behind their two-bedroom home here. But they can't do so for one key reason: Their local property taxes have nearly doubled in the past five years, to $4,400, an amount the Faggs say would be difficult to pay if they retired and lived on a fixed income. Mr. Fagg, who is 66 years old, typically works 55 hours weekly at his electronics-repair shop, often skipping lunch. His wife, who is 65, runs a part-time bookkeeping business.
Keeping up with property taxes "weighs heavily on me," says Mr. Fagg. In 2004, Mrs. Fagg was so stressed about the taxes that she founded the Property Tax Network of South Carolina, a group that wants to abolish taxes on a person's primary residence, as well as on food and prescription medication. "I became angry," she says. "People in South Carolina cannot keep going [financially] backwards ... This has got to stop."
Across the nation, Americans are revolting against rising property taxes. According to the National Taxpayers Union, an advocacy group, taxpayers are seeking property-tax relief in 20 states by such means as legislation, public hearings, citizen ballots or lawsuits. In Idaho, where property taxes in fast-growing areas have risen as much as 50% over the past five years, state legislators are reviewing recommendations to expand tax breaks for low-income, disabled, widowed and senior homeowners.
Sixty-three-year-old Ruth Wohlforth lives in a "very, very tiny house" near New Jersey's Atlantic coast, but her property taxes are so high she may not be able to afford to stay there much longer.
With a one-bedroom, one-bath house smaller than some RVs, Wohlforth's 2005 property tax bill for her Ocean View, N.J., home is $3,478. Compare that to the $250 tax bill she paid 30 years ago when she took over the home from her parents. With a fixed income of less than $8,000 a year from Social Security and a few bonds, her numbers don't add up.
Situations like Wohlforth's are playing out across the country. The housing bubble, with its red-hot real estate values, has sent property taxes soaring, making taxpayers mad as hell. From Maine to California, from Texas to Minnesota, rebellious homeowners are squeezed, and politicians are scrambling to try to accommodate them. At the same time, local governments fear that trimming the taxes could cripple schools, police, fire and other essential services dependent on that revenue.
Property taxes are levied by counties and municipalities (and by a few states). They are the biggest source of revenue for local governments, since most other taxes—income, sales and so on—go to federal and state governments. U.S. Census Bureau statistics for the year ending in 2004 show that property tax collections grew by 24 percent nationwide, while sales tax revenue grew by 12 percent—income tax collections actually shrank by a percentage point.
Not since 1978, when California voters revolted against high property taxes and approved Proposition 13 to slash them, has a tax issue so galvanized taxpayers. "Few types of taxation have stirred more people into anger and outrage recently than the property tax," says Pete Sepp, spokesman for the National Taxpayers Union, a Virginia-based group that tracks taxes and works to lower them.
"The taxes are driving people out of their homes," says James Dieterle, director of AARP's New Jersey office, which has been a leader in the state for property tax relief. "One resident whose house is paid for said her property taxes now are higher than her mortgage payments and taxes were combined."
The rest of this article can be read by following this link to the AARP BulletinArizonaPolitickin.com has prepared information to help you compute your own secondary property tax (within Phoenix) in order to see the effect of city bonds to the total amount of property taxes you must pay each year.
This project was inspired by an interview by Dennis Lambert of KJZZ 91.5FM with Maricopa County Treasurer David Schweikert.
Our personal tutor for this project was Tax Services Manager David Browning of the Maricopa County Treasurer’s office.
While the computation of property taxes in Maricopa County (which includes Phoenix) appears, on the surface, to be quite complicated it is, in fact, nothing more than the division of two figures:
1) The assessed property value (determined by the county tax assessor)Of the two figures, the voter does not control the first. The second is a direct result of voting polls and is directly impacted by YES votes for tax increases, tax over-rides, new taxing districts and any additional bonds to finance projects.
First let’s understand the assessor’s numbers. The tax assessor determines the market value of a property and then, using the rates described below establishes the assessed value.
For example…if a property has a market value of $250,000, the assessor then uses the rates below to determine the assessed value of the property depending upon the type of property.
Residential - 10% or for our $250k example = $25,000 assessed valueNext let’s understand taxing districts and the part they play in determining tax rates.
Each time the public (taxpayer) determines a need/want for services a taxing district is formed to collect a percentage of taxes from every property within the taxing district. These districts are formed as a result of YES votes by either the taxpayer or the taxpayers’ elected representatives.
A note of caution for all voters... While an issue involving taxes appears to be a good idea now, few taxpayers are sufficiently trained to read and understand the “fine print” used to form these taxing districts. Also it must be pointed out that these taxing districts rarely disappear once the initial project is accomplished. Many of these taxing districts would require an actual vote to dissolve them and, of course, the politicians will not voluntarily promote such an action.
You now need to be directed to the fact that every property lies in at least one taxing district and, in fact, most properties lie within many taxing districts which adds tax upon tax upon tax. This action results in the tax rates used to compute the primary and secondary property tax rates as depicted on the 2005 Tax Rates Maricopa County, Arizona.
The table constructed below utilizes the current 2005 Tax Rate Table to show the amount of secondary property taxes paid for four different properties with a market value of $250,000, $400,000, $550,000 and $700,000.
| Taxing | Elem. | High | 2ndary | Tax for | Tax for | Tax for | Tax for | |
| Area | School | School | Property | $250k | $400k | $550k | $700k | |
| Code | Dist. | Dist. | City | Tax rate | Home | Home | Home | Home |
| 011300 | Phoenix #1 | Phoenix | Phoenix | 4.3965 | $1,099.13 | $1,758.60 | $2,418.08 | $3,077.55 |
| 021300 | Riverside #2 | Phoenix | Phoenix | 3.2491 | $812.28 | $1,299.64 | $1,787.01 | $2,274.37 |
| 031300 | Tempe #3 | Tempe | Phoenix | 3.6717 | $917.93 | $1,468.68 | $2,019.44 | $2,570.19 |
| 051300 | Isaac #5 | Phoenix | Phoenix | 4.1659 | $1,041.48 | $1,666.36 | $2,291.25 | $2,916.13 |
| 061300 | Washington #6 | Glendale | Phoenix | 4.6840 | $1,171.00 | $1,873.60 | $2,576.20 | $3,278.80 |
| 071300 | Wilson #7 | Phoenix | Phoenix | 5.2064 | $1,301.60 | $2,082.56 | $2,863.52 | $3,644.48 |
| 081300 | Osborn #8 | Phoenix | Phoenix | 3.6490 | $912.25 | $1,459.60 | $2,006.95 | $2,554.30 |
| 141300 | Creightn #14 | Phoenix | Phoenix | 4.4721 | $1,118.03 | $1,788.84 | $2,459.66 | $3,130.47 |
| 171300 | Tolleson #17 | Tolleson | Phoenix | 5.0455 | $1,261.38 | $2,018.20 | $2,775.03 | $3,531.85 |
| 211300 | Murphy #21 | Phoenix | Phoenix | 5.0329 | $1,258.23 | $2,013.16 | $2,768.10 | $3,523.03 |
| 311300 | Balsz #31 | Phoenix | Phoenix | 3.8554 | $963.85 | $1,542.16 | $2,120.47 | $2,698.78 |
| 381300 | Madison #38 | Phoenix | Phoenix | 3.8574 | $964.35 | $1,542.96 | $2,121.57 | $2,700.18 |
| 401300 | Glendale #40 | Glendale | Phoenix | 7.0631 | $1,765.78 | $2,825.24 | $3,884.71 | $4,944.17 |
| 451300 | Fowler #45 | Tolleson | Phoenix | 5.1010 | $1,275.25 | $2,040.40 | $2,805.55 | $3,570.70 |
| 481300 | Scottsdale #48 | Unified | Phoenix | 2.8897 | $722.43 | $1,155.88 | $1,589.34 | $2,022.79 |
| 591300 | Laveen #59 | Phoenix | Phoenix | 3.6976 | $924.40 | $1,479.04 | $2,033.68 | $2,588.32 |
| 621300 | Union #62 | Tolleson | Phoenix | 3.4620 | $865.50 | $1,384.80 | $1,904.10 | $2,423.40 |
| 651300 | Littleton #65 | Tolleson | Phoenix | 4.5534 | $1,138.35 | $1,821.36 | $2,504.37 | $3,187.38 |
| 661300 | Roosevelt #66 | Phoenix | Phoenix | 2.8353 | $708.83 | $1,134.12 | $1,559.42 | $1,984.71 |
| 681300 | Alhambra #68 | Phoenix | Phoenix | 5.8997 | $1,474.93 | $2,359.88 | $3,244.84 | $4,129.79 |
| 691300 | Paradise Valley #69 | Unified | Phoenix | 4.2985 | $1,074.63 | $1,719.40 | $2,364.18 | $3,008.95 |
| 791300 | Litchfield #79 | Agua Fria | Phoenix | 4.4739 | $1,118.48 | $1,789.56 | $2,460.65 | $3,131.73 |
| 831300 | Cartwright #83 | Phoenix | Phoenix | 5.5884 | $1,397.10 | $2,235.36 | $3,073.62 | $3,911.88 |
| 921300 | Pendergrast #92 | Tolleson | Phoenix | 6.5402 | $1,635.05 | $2,616.08 | $3,597.11 | $4,578.14 |
| 931300 | Cave Creek #93 | Unified | Phoenix | 2.7284 | $682.10 | $1,091.36 | $1,500.62 | $1,909.88 |
| 971300 | Deer Valley #97 | Unified | Phoenix | 4.2802 | $1,070.05 | $1,712.08 | $2,354.11 | $2,996.14 |
| Averages | 4.4114 | $1,102.86 | $1,764.57 | $2,426.29 | $3,088.00 |
Now that you understand taxing districts and how they are formed let’s examine the last part of the equation, which determines the amount of taxes a property owner must pay.
Let’s assume a $250,000 residential property lies within a taxing district which wishes to fund a $1 million budget. The majority of the voters in this district pass the measure and the $1 million budget is approved for funding.
For easy math, we will assume that this taxing district has a total of $100 million assessed value of property within its boundaries.
The County Treasurer’s office does the following computation:
1) $1,000,000 (approved budget for the taxing district)The homeowner’s actual tax burden in our $250,000 home is computed as follows:
1) Since the $250,000 home is a residence the assessed value of the property is 10% of the market value leaving an assessed value of $25,000.Every single year, unless this district votes for a change, this property owner will pay $2.50 assuming the property maintains the same value.
This method of funding local budgets not only impacts the actual annual "out-of-pocket" expenditure of the property owner but it is also a deciding factor of a prospective purchaser of your property when you go to sell it. The prospective buyer always looks at the taxes required when deciding to purchase a property. If the taxes are sufficiently high a prospective buyer may choose to purchase in a district with lower taxes thus impacting the resale value of a property.
Senator, would you support changes in the State tax code such as those proposed to Governor Napolitano when she took office?
I have some other ideas. I believe the most onerous taxes are the taxpayers’ property tax. I liken this to the old feudal system where the King tells the property owners they can keep their property so long as they pay tribute. That’s not how our system was established. We don’t truly have private property as long as there are property taxes because at any time the Sheriff of Nottingham can come and take your property away from you if you choose not to pay your property taxes. I would like to see us eliminate property taxes. I would like to see us eliminate the need for these taxes. We have a lot of bonds out there that are on property tax. This is the tax I would most like to see eliminated. I would also like to see us get rid of income taxes – both personal and corporate. When we have these taxes we are penalizing success and that hurts our productivity.
Over the past several months Glenn McConnell, president pro tem of the South Carolina Senate, held a series of town hall meetings around the state. What he found would be a good lesson for Congress to learn as it fiddles over making tax cuts permanent. As any Palmetto State politician with a set of ears already knows, unless Republicans push through serious tax reform, the party will almost certainly take a pounding next Election Day.
The rest of this article can be read by following this link to theInternet exclusive: On Full Disclosure™ Video Blog
http://www.fulldisclosure.net/Program_Details/VideoBlog12-COPs.html
Los Angeles, CA., Ever since Proposition 13 was approved by the California voters in 1978, there has been a Constitutional provision that public indebtedness must be approved by the voters. In spite of this fact local and regional public officials have been authorizing and issuing billions in controversial, non-voter approved, tax exempt bonds known as COPs, Certificates of Participation. They have been doing so upon the advice of their bond counsels, bond brokers and underwriters all of whom are paid handsome fees for each approved transaction.
This controversial public finance practice is the topic of an eight minute video blog debate to be released on the Internet on Monday, September 26, 2005 by the Full Disclosure Network™ on the website at www.fulldisclosure.net.
Featured in the debate are:
State Controller Kathleen Connell (ret), who says most voters think they have the right to approve public indebtedness when in fact that could not be farther from the truth. “Since the 1980’s governments and schools have been issuing COPs without voter approval”.
Jon Coupal, President of the Howard Jarvis Taxpayers Association: Describes the role of the bond brokers and bond counsels who advise public agencies to issue Certificates of Participation because they make sizable commissions and fees for handling the bond transactions. These fees are paid before the bond money ever reaches the public agencies.
David Tokofsky, LAUSD Board Member: Says the school district legal counsel and bond counsel advised the Board members to issue the bonds without voter approval and he defended the practice saying the voters elected him and therefore the did approve of the bonds, through his vote, representing them.
Anthony Patchett former Belmont Learning Center bond fraud prosecutor described the Certificates of Participation Bonds as “a pyramid scheme” where the voters are totally in the dark. The money is borrowed, the brokers and bond counsel paid and more bonds are issued to pay off the bond previous bonds.
Moderating the debate is Emmy Award winning host Leslie Dutton
Video clips for this blog were selected from a series of full-length programs which are featured on 40 cable television systems. Over the past three years Full Disclosure™ has interviewed the people involved in the financing of school projects, including the planners, developers, investigators and prosecutors on the Belmont bond fraud investigation. Cable channels are listed by community and air times on the website.
By Greg Swann
Wednesday, January 25, 2006
http://www.bloodhoundrealty.com/weblog/2006/01/corporate-welfare-downtown.html
Also from the Republic:
City officials are negotiating with a St. Louis-based company that wants to build a $22 million parking garage on the eastern edge of downtown.The six-level structure would be on city-owned land on the Phoenix Biomedical Campus, near Fifth and Van Buren streets.
What it says, reading between the lines, is this: Free land for a profit-making parking structure.
But wait. There more.
The garage would contain about 860 parking spaces, including two levels below ground, plus 18,400 square feet of medical office space and about 5,600 square feet of retail space.
It turns out it's free land for a profit-making parking structure plus 24,000sf of profit-making commercial real estate.
The land will be untaxed, of course. It's City-owned.
But here's the cutest part of all:
The Transit Oriented Development zoning overlay would forbid this if it were being done on private land with private money.
The full triumph of corruption comes when uncorrupted commerce becomes impossible...