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July 28, 2010
Of Rates and Levies
This intra-conservative debate in East Providence points to one of those issues that tends to slide under residents' awareness:
[Mayor Joseph] Larisa is now trying to solidify tax limits by putting language into the city's Home Rule Charter. Charter amendments have to be approved by voters in a referendum, while ordinances are approved — and can be repealed — by a council majority. ...But Bill Murphy, spokesman for the East Providence Taxpayers Association, said the charter language isn't identical to the ordinance and the changes, although "subtle," are a "step in the wrong direction."
Larisa has changed the limit from one on the total tax "levy" to one on the tax rate.
I've noted before that, in Tiverton, those who set policy treat the tax rate as entirely incidental to the levy, while in Providence, the change in tax rate has been a major fight. On one hand, focusing on the rate more closely aligns with the meaning of the tax; you're paying based on what your property is worth, and if you property values decrease you have less wealth and should therefore pay less. On the other hand, focusing on the levy insulates the town from downturns in the market, but it also prevents the town from taking upturns in the market as well as the fruits of economic development as an excuse to grow — which could become a huge problem when the market contracts or the tax base decreases.
For the record, I'm with Murphy, on this one.
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Towns do calculate this in a very backward . They first figure out that they want $x to run the town, then they take the total assessed value and divide. Voila! There's your levy.
I can see how this would be a tough thing to really figure out in a city like Providence where you have homes worth $79,000 and homes worth $5M.
Posted by: Patrick at July 28, 2010 12:07 PMIn Hawaii each of the 4 counties figure out what it cost to run the county government for two fiscal years, provide services and infrastructure maintenance then they set a minimum property tax for the county, a real property tax rate that every property owner must pay and owner occupied homeowner exemption (owner who resides in the property at least 270 days a year) plus age exemption for seniors age 65 and up.
Minimum real property tax per year that must be paid if homeowner exemption and age exemption drops real property tax below minimum level: Honolulu County=$300 (due to recession Honolulu raised minimum from $100 July 1, 2010), Hawaii County=$100, Maui County $150 and Kauai County=$25.
Homeowner exemption: Honolulu County=$80,000 any age and $120,000 age 65 and up, Hawaii County=$40,000 any age, age 60 to 69=$80,000 and age 70 and up=$100,000, Maui County=$300,000 any age and Kauai County=$48,000 for any age, 60 to 69=$96,000 and 70 and up=$120,000.
Current 2010/2011 real property tax rates for homeowner per $1,000 100% assessed value are: Honolulu County=$3.42, Hawaii County=$5.55, Maui County=$2.50 and Kauai County=$4.25.
There are also additional low income or poverty circuit breaker real property exemptions per county for those who fall on hard times or whose incomes have just fallen due to family growth.
There is no real property tax on trucks, cars, boats or motorcycles in State of Hawaii.
There is one school district in the State of Hawaii administered by the state and supported through state income tax, sales tax and general fees.
Hawaii is one of two states where gambling and lotteries are not allowed.
By the 4 county governments setting minimum real property tax that all property owners must pay they set a baseline for what it cost to run local government and are assured that income to operate local government even if the price of property goes up or down.
Hawaii constitutional law requires local and state government to balance a two year budget and return excess funds to the taxpayers at the end of the fiscal year. I’ve received one rebate check so far!
Posted by: Ken at July 28, 2010 8:02 PMPatrick,
As far as the taxes related to the cost of housing goes in Hawaii, I live on the so called poor side of Oahu in Honolulu County where our houses sell for only up to $10.5 million so far.
There have been some $40 million sales on the other side for 3 bedrooms.
Maui County gives everyone a $300,000.00 exemption break before they start taxing.
Cost of doing of providing local government services individual counties. Last study completed was projected out to year 2050!
Posted by: Ken at July 28, 2010 10:58 PM