Many years ago I listened to my school teacher nephew talking to a parent about what the parent believed to be onerous property taxes. As the conversation progressed the parent then complained to my nephew about what he considered to be poor service provided by the fire department. My nephew’s response: Which way do you want it?
The bottom line is this: What ever we expect our governing bodies to do, we have to provide them the means to do it. In a recent letter to the “Progress.” a property owner asserted that taxes on residences should be eliminated and that there should be a different form of taxation. A tax is a tax. Whether it be a sales tax, income tax, property tax, etc. Texas has no income tax, but to compensate for that we have a higher sales tax than other states.
I often use the phrase, “For every economic action, there is an equal and opposite reaction.” Example: When I turned 65 my residential taxes were frozen. Is that necessarily good? No. Why? The taxes on those under 65 have to be raised to make up for my frozen taxes.
Nothing is free. The roads are paved with property taxes. The Texas gasoline tax, which is $0.19, has not been raised since 1992. Adjusted for inflation it would be $0.35 today. We all may be tickled pink but the fact that cars are getting better mileage and that the gas tax has not been raised has caused the state to come up short for highway maintenance. Because of the shortcoming the Texas Rainy Day Fund has had to be invaded to come up with the funds. The Rainy Day Fund was not set up for items for which the state knows to budget and anticipate; it’s purpose is to have funds for unexpected events, such as hurricane damage.
Concern has been expressed about too many people losing their homes because of high property taxes. The reality is that very few properties – of any type – end out being sold at tax foreclosure sales. Most that do end out in a tax foreclosure sale are properties of little significance.
This spring property values jumped significantly. Part of the cause of that is that the Appraisal District had apparently not been establishing property values based on available sales data, i.e., the sales of comparable properties. Fortunately the Appraisal District does have access to sales data now.
This is not necessarily a back door way of raising taxes. There is some likelihood that tax rates may be adjusted downward, this fall, to make up for the increase in values. While property taxes do constitute a perpetual lien on any kind of real property, that does not mean we do not own the property.
It has been suggested that some form of a consumption tax should be implemented. Well, we already have one. It’s called a sales tax. If the property tax were to be eliminated and the sales tax were to cover the eliminated property tax, you can rest assured that the sales tax would jump significantly. The problem with increasing the sales tax is that people who do not own a residence and who do not have significant incomes will have to struggle more to make ends meet because of the higher sales tax rate. I have often felt that it would be more efficient to have one kind of tax instead of several different kinds of taxes; but based on my prior comment that may not work.
There is another reason why some people can’t handle their tax burden. It is what I call “Wide Screen TV Syndrome,” i.e., not using your money for what is important. Now, if this individual succeeds in eliminating the property tax, here’s what we will have to do: All of us who have a home will become responsible for keeping the part of the road in front of our homes properly paved. All of us who have kids in school will have to start paying a school tuition in order to provide that funds the schools need since they will no longer have access to tax money.
In the future whenever we require the services of law enforcement, we will have to pay the members of law enforcement a fee for their service. We will also have to pass the hat around to collect the money required to compensate the employees of the schools and the government employees. Pretty nifty, huh?
Finally, our taxing entities do have the obligation to use their funds wisely. If any of us feels that funds are not being used wisely, then we'll have to make an evidence-based case.