PROPERTY TAX REVOLT
THE INSIDIOUS PROPERTY TAX OR WHO REALLY OWNS OUR HOMES
Ronald W. Mortensen, Ph.D.
According to the Census Bureau, in the second quarter of 2007, 68.2 percent of Americans own their homes. And, as would be expected, as we get older, more of us become home owners (55% under 35 years old, 82 percent 65 years and older.*) But do we really own our homes?
Well, not exactly. Those of us with mortgages share ownership with our lenders until we finally pay off our loans. But while we can eventually free ourselves from lenders, short of selling our homes or death, we never free ourselves from the other owners of our homes – a myriad of government entities that levy property taxes on us (the school district, the county, the city, the county library, the water district, the mosquito abatement district, another water district, the sewer district, and a recreation district).
Each separate property taxing district has its hands in our pockets. Each sets its own tax rate independent of the others and each holds separate hearings on tax increases. They all state the tax increase in the lowest possible way – the cost of just one Big Mac, $36 per year on a $180,000 home or just forty cents a day. After all who cannot afford such a small amount? (Have you even wondered why they never put it in terms of, say, just a 10 day supply of insulin or only a two day’s supply of groceries?) No taxing entity ever refers to tax increases being considered by a fellow taxing entity. And, they wouldn’t shock us by mentioning the total amount of property taxes we pay each year.
If we lose our jobs, we still must pay our property taxes. If we are called to active military duty, we still pay. If we are retired and living on a fixed income, when property taxes go up we still have to pay. If we are a young couple with three children under the age of seven trying to buy our first home, we still have to find the money to pay for a property tax increase. And we can’t elect to only pay for the basic service (water, streets, sewer and garbage) like we can with the cable company. We must take the entire service (arts, recreation centers, etc.) or as Hillary Rodham Clinton stated, “We’re going to take things away from you on behalf of the common good.”
To make matters worse, the property tax assessment system is rife with errors, open to corruption and highly biased in favor of the government. In Utah, the State Tax Commission and legislature have failed miserably to ensure that assessors follow the law.
The State Tax Commission and the legislature sat idly by while large areas of Davis County were not reassessed for decades although the law requires that properties be reassessed at least once every five years.
Land speculators are allowed to abuse the agricultural land designation and to pay cents on the acre while home and business owners pay hundreds of thousands of dollars on their lots.
Assessors are allowed to assess similar lots at widely varying rates and to arbitrarily set the prices of all lots above a certain altitude at a higher level because of perceived ability to pay. It is not uncommon for a .25 acre lot to be assessed at the same value as a .5 acre lot or for all lots, regardless of size or location in a subdivision to be assigned the same value.
The Utah state legislature, which is dominated by realtors and the realtors association, allows realtors to keep the actual sale prices of homes and other property secret in spite of the fact that this is the basis for Utah’s market value property assessment system.
In order to limit an individual’s ability to challenge a property assessment, the state legislature has established an onerous, costly property assessment appeals system. The appeals system assumes that assessor is right and puts the burden on the property owner to prove otherwise. And because real estate sales information is secret, property owners are denied ready access to the very data they need to establish the market value of their property.
Thus, Utah’s property tax system is designed to give the state maximum control over an individual’s property in order to ensure that government has a stable source of income. The property tax with its market value assessment system and biased appeal system is so unfair and so corrupt that it should be totally abolished. After all, property owners should never be forced to rent their property back from government in order to keep it.
Utah’s Elected Officials: Putting Government Spending Ahead of the Right to Own Our Homes
Ask Utah’s elected officials which is more important – a family’s right to own its home or a stable source of revenue to help fund huge increases in government spending. They will, of course, say that it’s the family’s right to own its home.
Next, ask them what they are doing to cut spending and to fix Utah’s broken property tax system which literally threatens people with the loss of their homes.
Chances are that the elected officials will tell you that they simply can’t cut spending. In fact, they’ll probably say that government needs even more taxpayer funds for schools, transportation and thousands of on-going programs. If they do discuss, spending cuts, they will probably talk in terms or reducing the rate of increased spending from, say 15% to 12%. When pressed, they will assure you that there is absolutely no way to reduce government spending below current levels.
On the property tax side, some elected officials will tell you that they’re working to increase the circuit breaker. Others will talk about annual, computer assisted, market value property assessments. Some will say they support tax deferral for seniors while still others will propose freezing property taxes when a person reaches age 65.
Of course, these are not real reforms of the state’s badly flawed, market value based property tax system. These are simply tactics designed to calm taxpayer anger and to guarantee that government continues to have access to the stable revenue that comes from the property tax.
Let’s face it. The vast majority of Utah’s elected officials, Republican and Democrat, see their primary role as expanding government spending and providing government with a stable source of taxpayer funded revenue. If you don’t believe that is the case, just ask your elected officials (legislators, county commissioners, mayors, school board members, etc.) the following questions.
- Do you support replacing the state’s badly flawed market value property tax system that allows unlimited increases in property values with a system based on acquisition value (purchase price) and that limits the annual increase in property values to the amount of the annual Social Security Cost of Living Adjustment (COLA)?
- How much did the budget you are responsible for increase, in percentage terms, during the past four years?
- Have you or your predecessors voted to increase property taxes during the past four years? If so, how many increases were approved and what is the total percentage increase?
- Have your or your predecessors provided incentives for other governmental entities to raise property or other taxes during the past four years?
- Have you and/or your predecessors reduced the property tax rate during the past four years? If so, how much? (Note: Reductions in the certified tax rate do not count. We are looking for voted cuts in the property tax rate).
- Have you and/or your predecessors reduced total government spending during the past four years? If so, how much? (Note: Cutting the rate of growth in government spending does not count. We want to know if the total budget has gone down from one year to the next.)
- During the past four years, how many programs that you are responsible for have seen their total funding remain unchanged or go down? How many programs have had funding increases?
- During the past four years, how many government programs have you or your predecessors abolished? How many new programs have you added?
- Can you provide me with a list of (A) duplicate government programs, (B) government programs that have outlived their usefulness, (C) government programs that benefit limited special interests and (D) examples of government waste, fraud and mismanagement?
Isn’t it time that our elected officials take concrete steps to reduce the property tax burden by abolishing the current inaccurate and arbitrary market value assessment system and by sharply curtailing government spending? In fact, wouldn’t it make sense to replace the insidious property tax with other taxes and to put government on a strict diet?
Citizens For Tax Fairness 