Wednesday, September 16, 2009

Blown Circuit

It seems that our betters on the Athens-Clarke County Commission have given up on the concept of property tax “circuit breakers” - at least for the time being. The ostensible purpose of a circuit breaker is to limit property tax increases on the poor and elderly by linking those taxes to the residents’ income, thereby countering the effect of neighborhood gentrification. Note that the decision to drop the idea was based on the practical difficulties of implementing such a scheme, as opposed to any belief that it was fundamentally flawed.

I am all for property tax relief, but remain convinced that a much better approach would be to adopt a “floating” homestead exemption, thereby limiting the assessment increases on those owner-occupied properties on which a homestead exemption was claimed. This is precisely the plan for which I advocated during my campaign back in 2006. Such a plan would achieve the same goals as a circuit breaker, but do so in a much simpler method and deny the Commission much opportunity to engage in its trademark social engineering. Thus, it has not been considered (nor will it be).

For earlier coverage of the issue in the Banner-Herald, see here, here, here, here, and here.

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Anonymous said...

According to Nancy Denson the original purpose of the homestead exemption was to prevent people from losing their homes to taxes in economic hard times (like the Depression). Even though the exemption, now, is a drop in the bucket, originally it wiped-out the homeowner's tax bill, completely, in most cases. I think this is good policy and rather than try and "socially engineer" a way to force wealthy people to pay more, why not just increase the exemption so that most homeowners, pay no property taxes at all?

Anonymous said...

It seems to me if you are trying to address the problem of Seniors and/or poor people being thrown out of their homes, a targetted approach is much better.

Assuming we did an across the board exemption like Garland is proposing, either the exemption would only work out to a couple bucks a homeowner and no one would be saved from losing their home or you would have such massive spending cuts to make, the flack over the lights being turned off would look like nothing.

Garland's proposal would work very well in places where you don't have to balance budgets or provide any services (maybe his goal from the very beginning).

Anonymous said...

A "floating exemption" would end the hidden, back-door tax increase, though. That should boost public confidence in elected leaders and allow more thoughtful budgeting. Otherwise: Proposition 13! Let government (and those working there on the public trough) threaten all it wants about "cutting services." Show me what you got!

james said...

For a variety of reasons, I think that a "floating" homestead exemption would be more fair to more people than a "targeted" one tied to income - but that is a matter on which reasonable folks may disagree.

Be that as is may, local governments depend on the "back-door" tax increases noted above to avoid making hard decisions as to their spending plans (and as I have pointed out ad nauseam, the Taxpayers Bill of Rights was effectively neutered by the Department of Revenue years ago). They also hide behind fiscal fictions like the Homeowners Tax Relief Grant so as to lay the tax burdens they place on homeowners at the feet of the state.

Thus, while we may quibble about tax policy around the margins, the real solution is for government to get spending under control.

And finally, if one lives out in the euphemistically named "general services" district as I do, all of the talk about local government services is just that, talk.

Anonymous said...

"Placing the tax burdens they place on homeowners at the feet of the state." HA HA HA HA HA HA HA

Anonymous said...

OK. So the millage rate would "float" so that taxes could not be raised on homeowners through the "back-door" method. When property values fall, though, wouldn't the float go up to counter the loss of revenue? What am I missing ...?

Anonymous said...

A targeted approach would be better. Did you know, "By filing posted complaints of election fraud to the Attorney General in selected states, you can help clear the path to articles of Impeachment"...(Have you read "The End Game"? All Georgians need to read this article.