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Politically Incorrect

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Outside the Box of Property Tax

It seems as soon as the snow falls, the rain begins, and the cross-country skis I got last year sit forlornly in the corner by the door. It doesn’t feel like I’ve gotten outside much at all this winter, but I’ve certainly gotten inside – at lots and lots of meetings and interviews.

It was while talking with Kathy Osborne at the Co-Op the other day that I was able to define the lingering sense of malaise I’ve been feeling as the end result of so many meetings. “Maybe it’s time for a radical change,” she said, and I recognized my own dissatisfaction with the seeming inability of people to think outside the box.

It’s a phrase that Dennis hates. “What the heck is thinking outside the box, anyway?” he said to me a month or so ago. “That’s just one of those stupid catch phrases.” I don’t think I identified it for him well, then, but I’ve certainly thought a lot about it since.

Maybe Dennis is right – we have an awful lot of catch-phrases in the world we live in today. But for me, thinking outside the box is a simple way of describing Einstein’s great injunction: “If we keep doing what we’ve been doing, we’ll keep getting what we’ve been getting.” Three year-olds seems to grasp this concept instinctively. “Why?” they ask continually, and every time you answer them, they come up with another, “Why?” When you get to the answer “Because!” you’ve found the box. Einstein, and all the great thinkers of our time, didn’t seem to have a problem with getting outside the box and three year-olds haven’t learned yet that there IS one. Too bad great thinkers and three year-olds don’t go into politics.

The great political debate these days is the age-old alchemy of how to get blood out of a stone. Government at the local and state levels seems to have more bills than paycheck at the end of the week, which puts them right about on par with most everyone else I know.

There is a simple answer to that dilemma – if your expenses exceed your revenue, then you must either decrease your expenses or increase your revenue. Not too many people seem happy with the idea of decreasing expenses, especially if they’re spending money that wasn’t theirs to begin with, so the focus is on increasing revenue. That focus is limited by the walls of the box in which they sit. That box is called the property tax. (Maybe that box is called tax, but that’s another story for another time).

Property tax – I can’t help but think of it as helping to proliferate one of the stupidest ideas of all time – that of property value.

In the great state of Idaho, many, many years ago (Four? Five?) the Idaho Legislature took a look at how it provided money to schools. The state receives money from sales tax, income tax and all the other miscellaneous fees and taxes we get hit with all the time (plus the lottery) and apportions it out to school districts based on the number of children they have to serve. Kind of. And then came the great reform.

Today, the state apportions money out to school districts based on the number of children they have to serve, but with one great exception (and, for the sake of argument, let’s just ignore the state salary schedules and the impact they have on the budget). The exception was a novel concept at the state level that wealthy people didn’t need as much financial support as poor people (a complete 180 for government it seems), and that disbursements could be “equalized.”

“How do they determine whether a school district is wealthy or poor?” you ask. The answer is, it’s based on your area’s property value.

This is what government at the county level does. They take the dollars they need by assessing a tax on the value of the property you own. No one appears to question whether property value is a real determination of wealth, and therefore your ability to pay, however. They just assume that it is. How stupid.

There is only one time your property has any value beyond the fair market rental and that’s if you sell it. For all those folks who rushed out to re-finance at lower rates, and tap into their equity while they were at it (and I was one of them), a caveat: that was not money in your pocket, much as it may have seemed at the time. That was a LOAN, and loans are liabilities, not assets. You have to give that money back, plus a whole heck of a lot more.

If the state truly wants to determine which school districts are capable of providing a greater share of their own financial support, why don’t they judge that by the income tax base in the area (although there’s another box – and yes, I’m a proponent of a flat tax). Even better, why don’t they determine it by the number of families in the district that qualify for reduced or free lunch? At some schools in our area, that number is over 40% of families – yet our state funding for education locally is reduced by equalization, because the state believes we’re wealthy enough to need less support. “Why do we run a supplemental levy for schools every year?” you ask. Because the Great State of Idaho decided we could afford to, and held back our rightful share of the money we’ve already paid to provide for the education of our children.

I am not a tax protester. I am perfectly comfortable with the concept of paying for the services I expect and want to receive – things like police service, education, libraries and roads. I understand that by choosing to live in a rural area, my share of those expenses is going to be proportionally higher. But the imposition of that share needs to be a lot more fair than it is today.

So Kathy, I think you were right. I think it’s time for a radical change.

Check out Fair Taxes online for an interesting, if graphically unappealing, look at what the state of Wisconsin is trying to do.       

 

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Landon Otis

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education, funding, taxes

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