Leaders, You Do Have a Choice

Not to darken your day, but the latest bit of bad news brought to Rhode Islanders by Providence Journal business writer John Kostrzewa comes with a very important point:

When cities and towns do revaluations required under state law, they will find the total value of their residential property has probably declined. With a lower total valuation, municipal officials will have a choice — cut spending to match the new lower level of tax revenues, or raise the tax rate to collect enough money to meet the budget.

Yes, local officials, you do have a choice. The fact that my assets are worth less in now way necessitates that you tax them at a higher rate. What it does necessitate, if you ask me, is that you turn your focus to spending within the town’s means and to finding ways to make my geographically based assets worth more.

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16 years ago

Or…;what say we stop relying on property taxes so heavily -more heavily than 46 or 47 states- to fund our greatest local expense, which is education?
It will doubtless be pointed out that shifting the expense from local to state level doesn’t change the amount spent. That’s right, but at least a) the burden is more fairly and rationally distributed (think retirees on fixed incomes packing their bags for Florida) and b) With the state providing more revenue for education, there will be a greater impetus to look more closely at how the money is spent (think contracts, consolidating services and supplies, etc).

16 years ago

Justin, Justin – what color is the sky on your planet? Its blue here and also here it would be unprecedented for local officials to actually tighten their belts. As a self-employed private sector guy, I’ve had to do that several times. Actually, I’d be happy if they just froze my local property tax dollar amount during the current mortgage meltdown/housing unpleasantness.
Chalkdust – a look at RIPEC reports on education funding from the past several years will show the urban core cities receive the lion’s share of state level education funding. You can try to make this redistribution more predictable and certain, but there still is a problem with the dollar magnitude. And we both know that by far, by far, wages and benefits are the major cost and driver of budget increases. As for consolidation of the various districts actually reducing overhead expenses and overhead jobs and saving money, that sort of thing only happens in the private sector.

Harvey Waxman
16 years ago

John Kostrzewa’s point suggests that lower values make less money available so towns should reduce spending. A false conclusion.
Spending could be frozen and taxes will rise for some and fall for others as long as there are revaluations which are applied to both new owners and existing owners.
Spending within one’s means is a worthy goal but revaluation distorts, even eliminates any resulting benefits.

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