Wednesday, May 9, 2007

Emmett Hanger's economic model - New Jersey?

The moment I saw STD make reference to Hanger's mantra on taxes ("The purpose of tax reform is to emphasize sales tax and income tax and take the burden off of real estate tax"), the blood drained from my face, my heart nearly stopped dead, and the warnings clanged in my brain: I've heard this nonsense before, where I grew up.

Unlike the overwhelming majority (I think) of the B4S roster, I am not a native Virginian. My "formative" years (before college) were spent in a suburban township in northern New Jersey. More to the point, every single tax increase I ever witnessed in the state of my birth has been justified by a spurious claim to lower property taxes. The theory goes like this - the more revenue the state raises, the more it spends; the more the state spends, the less the local government has to spend; the less the locals have to spend, the less they have to tax.

When said like that, it sounds marginally logical. Of course, what they leave out is that this depends on the frugality of locally elected officials. If the locals are willing to spend money like water, then the entire notion collapses under its own heftier tax bills.

This may also explain why nearly every local official is coming out for Hanger: this tenuous link between state and local taxes give all of them cover to spend like drunken sailors, while Hanger blames anti-taxers for "forcing" said locals to tax and spend.

Of course, as in New Jersey, local officials down here never seem to get enough state money to slow down their own profligacy.

Meanwhile, I would also note with amusement that Hanger's argument focuses only on lowering (in theory) real estate taxes, for if he had said property taxes, then it would have brought the personal property tax (i.e., the "car tax") into the discussion.

There, Hanger and his tax-hiking buddies didn't help local officials and taxpayers, but shafted them. While most have focused on the income and sales tax hikes, the 2004 tax soak also included a ceiling on the amount headed to localities to cover the local car tax (it was suppose to rise in order to maintain a 70% car tax reduction in all localities). In particular, the legislation froze the amount for each county and city, regardless of the future increase in car prices or population. This means Valley voters (and, although it means far more to me than to others here, the Fredericksburg area) will see their car taxes go up nearly every single year - precisely because Hanger et al did the exact opposite of what they claim they wish to do. Rather than increase state funds for supposed local tax cuts, Hanger, Warner, et al left the locals high and dry.

However, Hanger's excuse is still valid for local officials, so they're sticking with him.

This gives a new dimension to this campaign. Electing Scott Sayre will not only send a message to Richmond to keep taxes low, but also to local officials: namely, that they can no longer jack up spending and expect the voters to blame Richmond for it.

Labels:

305 Comments:

Blogger Spank That Donkey said...

DJ:
That is the best post on B4S to date, Bravo! Bravo!

That is game, set, match on the tax issue...

May 8, 2007 at 11:26 PM  
Blogger SWAC Girl said...

DJ, thanks for the comparisons. That puts it in perspective that is eye-opening and scary all at the same time.

May 9, 2007 at 4:24 AM  
Blogger Elle said...

DJ, you are correct. Look at the City of Staunton; frugality is not a word in their vocabulary. They just gave their residents one of the largest real estate tax increases in modern history.

Hanger's logic simply doesn't ring true.

May 9, 2007 at 8:24 AM  
Blogger Spank That Donkey said...

No doubt Elle:
07' City of Staunton Tax rate $.94
assessment increase 28%
equalization rate $.74
Rate adopted by council $.90
Now how many of those council members ran on the platform of raising of raising Real Estate taxes $.16?

Answer none...

May 9, 2007 at 8:55 AM  
Blogger Yankee Philip said...

I left NY because I was paying $8000 a year in property taxes. They went up from $3000 in 1994, when I bought the house. My services, as a regular citizen had not changed, but the illegal aliens at Home Depot got a really nice shelter.

May 9, 2007 at 12:01 PM  
Anonymous Anonymous said...

You have to wonder about politicians. They forget what is really important to the people. In Waynesboro they r going to spend money on an old theater, but they have a problem with flooding. They need a new firehouse. So what are they going to do? Do it all and raise your taxes.That is a lack of leadership. We elected them to make the tough choices, but all they do is punt the ball.

May 9, 2007 at 12:45 PM  
Blogger Spank That Donkey said...

Just look at the City of Staunton. 28% increase in Real Estate assessment. Current rate $.94
to equalize rate should be $.74
Rate adopted by Council $.90!

Which of those Council members running for office had a plank of raising the Real Estate Tax rate by $.16?

That is a Travesty...

May 9, 2007 at 2:33 PM  
Anonymous Anonymous said...

Hey it costs a lot of money for lawyers when Staunton tries to steal houses, whoops I mean improve areas using eminent domain. And all the lawyers for denying home improvements in "historic" areas. And the fancy walkways and sidewalks, these are very very important and expensive. You extreme anti-government anti tax ideologues. Be thankful that you have a government that really cares in Staunton.Don't you know how much it costs to really really care?

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