What Do You Think is Wrong & Unfair About Property Taxes

I was recently asked to write "What do you think is wrong & unfair about property taxes in your area or your property?". Here was my response:

- Everything is wrong and unfair with taxing property to fund necessary government services in 2010.

- The Philosophy of Property Taxes. If the intent of property taxation is (or even should be - this is really a political libertarian vs. progressive tax policy question) that you should pay taxes according to your ability to pay, then 220 years ago, when many states enacted a property tax to pay off Revolutionary War debts, many citizens were from an agricultural-based community where the size and perceived value of a person's property probably could be correlated to their wealth. In 2010, a person's home is generally NOT always representative of their true wealth, which may be in other instruments or areas, like stocks, bonds, savings, income, or other tangible or intangible instruments. A billionaire could live in a shack, and pay much less than the single mom/teacher with 2 kids in the raised ranch across the street. See the article " Time to Abolish Antiquated Property Tax" By Dr. Mark W. Hendrickson (faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College) | Tuesday, July 10, 2007 at http://www.timesanddemocrat.com/articles/2007/07/10/opinion/doc46928a44cc223654321144.txt

- A homeowner that takes care of their property, and makes timely repairs and keeps their home with a neat and clean appearance will give the perception that they have a "nice home", and it will be more marketable from a sales standpoint. "Market value", or the local assessor's "assessed value" is the supposed measure that will vary how much taxes the homeowner will pay. Therefore, by keeping your house marketable, and not parking junked vehicles in your yard, or tearing off all the siding and spray-painting "property taxes suck - rebel now!" and neglecting your yard, you will be assessed higher, and will therefore pay more taxes than a less-diligent homeowner. It does not matter that you are retired, unemployed, poor, rich or disabled or to what extent you use the government's services, you will pay more property taxes.

- A family of 5 living in a home assessed at $100,000 will pay half the property taxes that a family of 5 will pay living in a home assessed at $200,000. The family in the $200k assessed home may be poor or unemployed, and the family in the $100k assessed home might be millionaires. The family in the $100k home might use more government services than the family in the $200k home, but pays less for the government services. Perhaps each family uses the same government services, the family in the $200k home still pays more.

- Assessment. What is it, and what is it supposed to be? It is NOT what a home has sold for. It is NOT a guarantee of what a home will sell for. It is NOT anything more than a guess. Perhaps an educated guess, but still just a simple guess; an opinion. A guess directly affects how much property taxes will be paid to fund necessary government services. There is no applied assessment science. There is no applied assessment method, exact and the same equally across the state to assess property values. How hard is it for an assessor to skew the assessment to favor their friends or family? In my town (Hastings, NY), there are over 10,000 properties for the one assessor to accurately assess each year, and he works for a few other local towns, as well. That's potentially over 20,000 properties to assess. I assure you that accuracy is not guaranteed. If you disagree with the amount of your assessment, you are encouraged to meet informally with the assessor (according to the NYS Office of Real Property Services), which I have had to do a few times. This generally involves a negotiation of what the assessment should be. How ridiculous is that? Now, your taxation is dependent on your own negotiating skills with the assessor; again, no subjectivity, and plenty of room for shenanigans. If you cannot come to an agreement with the assessor on what the assessed value should be, you go before the Board of Assessment Review, who are supposed to be your peers, but who may or may not agree with you, either. If you disagree with the Board, you go to small claims court. How much easier would this all be if we consolidated all local government services to the County level, then paid sales tax and income tax only to fund the necessary government services? An equal, fair percent could be charged, the infrastructure already exists for collection, and there would be no wrangling with assessors and boards and comparing your property to your neighbors' property and everyone wasting time and energy GUESSING what a property MIGHT sell for.

- Property Ownership. A retired farm couple that paid off their home years ago continues to pay property taxes, "renting" their own land from the government until they sell. Once the suburbs creep out to where they farmed for the last 30, 40 or 50 years, the developers begin to desire their property. They are retired and on a fixed income, and their assessor, who is friendly with the developer, raises their property assessment to the point that they can't pay the property taxes. If they don't pay the property taxes, they will be evicted from "their" land, that they "paid for" years before. Hence, in a society that continues to tolerate a property tax, only the government really "owns" property.

- Payment In Lieu of Taxes (PILOT) Agreements and Empire Zones. Companies use the threat of litigation as a means to NOT pay what the property tax laws should strive for - fairness and equality. The cost of doing business in New York State has risen to the level where a business cannot or need not compete with other states in the amount of property taxation charged. Should NYS and local governments not offer companies incentives and PILOT Agreements, those companies will threaten to leave. This practice has held many municipalities hostage, with the threat of massive unemployment sufficient to lower the property taxes paid by companies deemed "too important to lose" to the community. Unfortunately, the local homeowners and small business owners end up with the tab. Is this fair? Absolutely not, and many of these companies either threaten again before their PILOT is up to see what they can get away with, or end up leaving anyway, so now we have empty buildings no longer on the tax rolls. See the Syracuse Post Standard article "New Process Gear, Town of DeWitt, Settle Tax Dispute" at http://blog.syracuse.com/east/2009/08/new_process_gear_town_of_dewit.html. Ah, the "Free Trade" and selling out of the once great manufacturing economy of America! I suppose if you found my website, www.abolishthepropertytax.blogspot.com, you know you've got me going now! My point is to echo the words of Benjamin Franklin, when he stated in Emblematical Representations in 1774 that "The ordaining of laws in favor of one part of the nation, to the prejudice and oppression of another, is certainly the most erroneous and mistaken policy. An equal dispensation of protection, rights, privileges, and advantages, is what every part is entitled to, and ought to enjoy." Therefore, the use of PILOT Agreements and Empire Zones is UNFAIR to local small business owners and homeowners because we are not all being treated fairly by the property tax.