Property Tax: Symptom or Enabler?

In most debates with the opposition on School Property Tax Elimination the statement is usually made that the Property Tax is a symptom of other problems.  The claim will then be made that if we fixed all the other problems, the property tax wouldn’t be an issue.  For me, this is like trying to treat a cancer by focusing on the surface problems of the cancer because I see the Property Tax as the enabler of all the other problems.  Let me explain using a few examples:

UNFUNDED MANDATES:  While opponents usually make the claim of loss of local control under SB/HB 76 they will always also talk about unfunded mandates.  An unfunded mandate is a federal or state mandate passed in government that no appropriations are made to cover.  Unfunded mandates however do have to be funded and they are funded by the local property tax.

You can’t have it both ways, either there is local control or their isn’t an unfunded mandates simply are controlled locally.  They may be paid for through local taxation but the control rests squarely on those who impose the regulation.

So the question is, would the unfunded mandates exist if they didn’t have the property tax  to fall back on as a revenue source.  I argue that with many of the unfunded mandates, if they required tax increases at the state or the federal level, these mandates wouldn’t exist.  At least there would be more discussion about the financial accountability of such an action.   In fact, I would go so far as to argue that the so-called claim of local control, which anyone with a reasonable understanding of the regulations and controls over our local schools district and local government knows is a myth, would see a restoration of local controls by eliminating the reliance on the property tax issue itself and the ability to use local funding sources be returning to financial accountability where the cost originates….at the state and federal levels.

PENSIONS:  As with the unfunded mandates, the pension problem relied on local funding to provide a major portion of the revenue.  Even in contract negotiation, the cost to the public sector union members regarding their own contributions, is a part of the consideration.  The salary increase necessary to meet that obligation is paid for through local taxation.  This isn’t to say that teachers should have a reasonable retirement plan, simply to say that the way it is designed, it is stacked against property owners.

During debates on the House version of 76, the School Property Tax Elimination Act, the question was raised “How will we pay for the pensions if we eliminate the school property tax?”   That should answer any questions as to whether or not the pension issue is a symptom or if the property tax was the enabler allowing for the creation of the problem.

PREVAILING WAGE:  There is no question as to whether or not the prevailing wage is making the cost of construction to government related projects more expensive.   There is also no question that, once again, the increase of that cost comes directly from our Property Taxes.   If prevailing wage costs had to be absorbed at the state level, where the law originates, and if that required the continual increase of taxes at the state level, do you think something would have been done about this issue or do you think they will continue to do what they’ve been doing….talk about the problem but do nothing about it because the state legislators don’t have to worry about raising the taxes to provide for it.  I would argue that this issue, like the other issues mentions above, would never honestly be addressed as long as the one responsible for passing these regulations are not accountable for the money to pay for it.   That makes the property tax the enabler of the prevailing wage issue and the fact that while it’s a campaign rhetoric issue, nothing ever happens with it.

PAYCHECK PROTECTION:  The mere fact that local taxes are used to collect union dues for public sector union employees rather than requiring the unions to pay for the cost of collecting those dues becomes a problem.  Why should it be the responsibility of citizens who are not members in that union to pay for the collection of those dues?

Once again we see a government mandate passed at the state level but paid for through local taxation with no financial accountability on those who actually passed the legislation.  Once again we hear the rhetoric every campaign cycle and another two-years will pass where nothing is done about the problem.  Would this exist if the state legislators had to raise our state taxes to pay for it?  More importantly, would they solve the problem if they had to provide the revenue needed to pay for it?

Those two questions should be, in my opinion, questions asked whenever we address any of these issues.  That second question (Would they be quicker to solve the problem if they had to pay for through higher taxes at the state level?) becomes critical in actually addressing and solving the problems.  I argue that until the revenue stream through the local property is removed, those problems will never really be anything more than campaign rhetoric because they won’t have to address it since they don’t have to pay for it.

As I’ve traveled around the state on this issue I’ve heard more than my share of state legislators telling us that the increasing cost of the property tax is a local problem and that we should take this fight to the local level.

So let me get this straight….The state, through legislative efforts as well as through departmental regulations have imposed a series of unfunded mandates on our local governments and school districts that have to be paid for.  When paying for that requires them to increases their taxes, it is then, somehow, solely the school districts fault and those responsible for passing the unfunded mandates and regulations get off free.

Maybe that argument might work in some pretend scenario but in the real world if you are the ones accountable for causing the taxes in another area to increase, then the responsibility is on the ones who created the need for the increased revenue.  Until that changes, I doubt that we will see any substantive change to the cost drivers that inflate the property tax.

I don’t deny that these other issues are not problems.  I simply don’t accept that it’s all the fault of the local bodies.  I also honestly think that that those other issues become little more than campaign rhetoric because they have no intention of doing anything substantive about it other than campaign on it.  Why?   Because they don’t have to?  As long as they have someone to pass the blame towards, why would they?

That being said, I know that there are some legislators who actually do understand the problems and want to do something about it.  As long as they remain in the minority it is unlikely that anything is going to change in any substantive way that brings real relief or real solutions.

You’ll have to pardon my cynicism here but can you imagine if we actually started looking at the enablers that allowed these problems to come in to being and actually solved the root core of the problem which led to real and substantive reform to the other problems?

What would  re-election campaigns become if they didn’t have issues like Pension Reform, Prevailing Wage, Paycheck protection and other unfunded mandates to frame their election rhetoric around?

If we actually solved the root core of the problem, how would the campaign funding special interests be able to generate enough responses to get us to send them money to stop things that never get stopped and never change to our benefit?






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