Bacon's Rebellion

Definition Of A Tax Increase, Part 14

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by

James A. Bacon
in

The debate over what is a tax increase has raged on since the primary. Given, when a local governing body votes to raise the real estate tax rate, it is a tax increase. Previously debated: If a local governing body fails to lower the rate sufficient to overcome assessment increases, is that a tax increase? And now comes this question from Chesterfield County, as reported today in the Richmond TD. When a local governing body takes steps that raise assessments, is that a tax increase?

I say yes. There is no question the value of my home here in Chesterfield will rise or fall based on the going price for comparable new homes — some of them very near by. When the price of those new homes rises to cover this higher proffer, eventually the value of existing homes will rise as well. With all due respect to the powers that be in Chesterfield, it is insulting to me for them to deny something that a freshman in Econ 101 can figure out. If proffers and impact fees only produced the direct revenue and no indirect revenue, I’m not sure so many localities would be so eager to adopt them. And now that the local homebuilders have made an effort to teach a little econ to the taxpayers in existing home, at least we can have an honest discussion.

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  1. Ray Hyde Avatar
    Ray Hyde

    Steve, I’m going to predict that Subpatre will weigh in on this.

    I happen to think you are entirely correct. Increasing proffers is a back door, unadvertised tax increase that hurts current owners more than new owners or developers.

  2. Jim Bacon Avatar
    Jim Bacon

    Steve and Ray, I agree with you. It’s a bit confusing because there are two things going on. The first thing is the imposition of the impact fee, which the developer will tack onto the price of the house and the new homeowner ultimately will pay for. That represents a hardship that old homeowners do not have to bear. The second thing is that the price of real estate is set by supply and demand, and if new supply can’t enter the marketplace except at prices that incorporate the cost of that impact fee, the value of all comparable houses will rise. And so, presumably, will assessments on older houses. In that case, I totally agree with the two of you, the Board of Supervisors ought to ratchet the rate back down to offset that increase.

  3. Ray Hyde Avatar
    Ray Hyde

    Economists who have studied this say that about half the cost is applied to new owners. Developers squeeze the other half out of lower offering prices for developable land. This is another way of saying that existing residents pay the price.

    Also, since there are (usually) many more existing homes than new, a small increase in price translates to a lot of new tax money – again from existing residents.

    Subpatre will argue that the budget is spread across the assessments and results in a tax rate that reflects the assessments. Therefore, those that demand new services and the supervisors are solely to blame.

    Yes, the supervisors ought to ratchet the rate back down. But human nature, and all the pet projects of various county administrators mitigate against this. It is just too easy to view the new higher assessmenst as new wealth that ought to be taxed.

    Problem is, that wealth is not necessarily in the pocket that pays the tax.

    The idea of proffers is very seductive, but the way it works out in fact is not necessarily the way it appears.

    “In Aspen, Colo., according to Gary Feldman, a broker for Coates Reid Waldron, a million will get you a two-bedroom condo, if you’re lucky. “Aspen has limited real estate that’s available, and our political climate since the mid-1970s has been severe anti-growth,” he says. “It’s turned Aspen real estate into a limited commodity * chased by the world’s wealthiest people.” “

    I think that this dynamic plays out in many places. As EMR says, no one wants a house in their neighborhood that costs less than their own. Overall, you would rather make more money and pay more taxes on it, than not make the money. But in the housing market some will be priced out because their income does not rise as fast as the taxes (or rent).

    Arlington had a high percentage of hispanics enrolled in ESL classes that now are empty, but there is increasing demand in outlying areas.

    Proffers, therefore, may be not only a tax, but a form of class warfare against both newcomers, and low income people.

  4. SouthoftheJames.com Avatar
    SouthoftheJames.com

    Steve – Economic modelling aside, it’s still dishonest to equate allowing home assessments to increase via formula adjustments (which taxpayers tacitly approve by voting for the supervisors) with actually voting to raise the rate of taxation. It’s bringing Washington-style political doubletalk to the local/state level. If I choose to move to a hot space, and my value goes up, all things being equal, I should expect for my tax payment to increase. The same goes for income taxes, even with a flat tax, the higher my income, the greater my total contribution is the to tax rolls.

    Jim – new construction and existing construction are not perfect substitutes in terms of supply and demand. Price is dependent on the community, municipality, and regional economy. Thus, the market in suburban (please let’s not get into an argument over that term) Henrico & Chesterfield is different than urban Richmond. In Chesterfield, the assessments vary even among similar square footage homes because of comparative land values. The bulding values vary by age and size, but in Eastern Chesterfield, an acre is cheaper than Western Chesterfield, thus land value (and total assessment amounts) are less. The proposed proffer of $17,000 only represents around 5-6% of the total home price for typical new construction, which starts over $300,000. Even with the current lower fee of arond $11,000, demand for new construction started in the $250,000 range. The market for lower-priced homes is now being satisfied by existing homes, where the supply is more than sufficient to cover demand. Prior to the rapid price increases of the last year, existing home sales were lagging because new home prices were not much higher ($10-20K for a similarly sized house in a similar development). Now, the market is being segmented more efficiently, thus the market is correcting itself.

    Ray – as for the taxes, those new homes stress municipal revenues more than existing homes. Some local economists peg the fiscal impact of new homes at around $1.40 in public money expended for every $1 of tax money brought in (Commercial development can cost you $0.60 for every $1 of tax money spent, thus it should be, in theory, preferable than residential). Most of those new homes – esp. in Chesterfield – are occupied by families with muliple vehicles (3 per household) and multiple school-aged kids (2+ per). Thus, they are draining existing resources and causing new resources to operate from a structural deficit. That burden falls to existing homeowners whose houses cost marginally less to the municipality because of the sunk costs because the older schools/roads/sewer lines are paid for.

    In Chesterfield specifically, my neck of the woods (the hot 360 corridor) is home to 55% of the county’s new development but only 13% of the county’s total land. The home builders control the county board and General Assembly members and the rampant new homebuilding pushes the residential property tax burden up near 80%. The fetish for residential zoning limits the ability to balance out homeowner taxation with commercial real estate taxes (Richmond and Henrico are closer to 30% commercial taxes). Prospects for commercial development are diminished because the county favors rezoning for residential versus commercial and also limits the commercial prospects that they target. This is hurting both industrial site and commercial rental residential markets. There’s a reason why Chesterfield gets less ROI from the Greater Richmond Partnership and GRCC than other localities – the supervisors have shown their hands and turn the county into a bedroom community on steriods with most new industrial development focused on the Rt. 1 corridor. The county has actually collected very little of the proffer money in the decade-plus since the policy was put in place. Thus, the chickens have come home to roost for county officials as now their patrons – the homebuilders – are putting the squeeze on them in the media and with voters.

    — Conaway

  5. Steve Haner Avatar
    Steve Haner

    I tend to agree that normal market price increases which are not totally counteracted by lower rates do not qualify as “tax increases.” For example, I don’t agree with the argument that Tim Kaine “raised taxes” in Richmond because rates didn’t go down as much as values went up. I’ve taken that position in early versions of this debate.

    But it is a different thing when the local governing body increases the price of new housing through these proffers, which are a tax because they are not voluntary at all, and thereby artificially (as in an something man-made) raise all values. I live in the same 360 corridor, and frankly see the upside of my rising value and as the husband of a teacher may benefit financially on that end. But for them to argue they are doing this to avoid a tax increase is (to use a technical term) crappola. It’s just a different kind of tax increase. (….tax that fellow behind the tree.)

    Many of the houses going in now were zoned long ago, and the county’s residential/industrial imbalance has a long history as well.

  6. true country boy Avatar
    true country boy

    Mr. Haner,

    On this you and I agree.

  7. Ray Hyde Avatar
    Ray Hyde

    “those new homes stress municipal revenues more than existing homes.” … “Most of those new homes – esp. in Chesterfield – are occupied by families with muliple vehicles (3 per household) and multiple school-aged kids (2+ per). Thus, they are draining existing resources and causing new resources to operate from a structural deficit. That burden falls to existing homeowners whose houses cost marginally less to the municipality because of the sunk costs because the older schools/roads/sewer lines are paid for. “

    SOJ:

    I don’t deny you make an interesting argument, and one I am not statistically able to refute. I’ll take your figures at face value.

    But here is the problem as I see it. Somehow “new” homes cause a structural deficit but “old homes” have paid their own way.

    If we make new homes pay their own way up front (through proffers) won’t that eventually mean they have paid too much (when they become old homes)? Who paid for the infrastructure for the old homes? Are we changing the rules mid-stream?

    The Cost of Community Services figures used to make the argument that new homes don’t pay their own way are based on a snapshot in time. Some economists claim they are critically flawed for that reason, and no case can be made that, for example, rural or farmland costs the county less than residential land.

    In my county the claim for commercial industrial property is similar to yours ($0.60 in costs per $1 paid) and for farm land the claim is $3 paid for $1 in costs. But no reference is made to new vs old in either case.

    Surely the government is going to be around long enough to tke a longer view of the costs of a home that may be around for 125 years. I have been in my Alexandria neighborhood long enough to see the kids grown and moved out, a long period of old folks only, and now a new crop of kids.

    Or maybe, “tax positive” commercial and farmland is just being over taxed. If you take a larger view (and it may be different for your county) in fauquier real estate tax is one third of the county revenue, the rest comes from kick-backs from the state, auto and business taxes, fines, user fees etc.

    But one way or another, all that money comes from someone who lives – in a house.

    I don’t believe the case is made that new construction is money loser for the government. It may, however, cause a rather large and uncomfortable bump in capital spending. If communities could arm themselves with an endowment, such a situation could be avoided, but that is prohibited by law, so the only recourse we have is to borrow money or tax people unfairly.

    Is this a great country, or what?

    Incidentally, when Fauquier makes that argument they claim 2.7 children per home, but the census says it is only 1.7.

  8. subpatre Avatar
    subpatre

    Hoo-ha!! Steve’s economic theory is a riot. House values rising faster than inflation is a century-old fact that occupants have no control over; yet (deliberately) using this increasing value to raise tax bills is not ‘raising taxes’.

    In contrast, Steve says government action raising new home values 5% (and possibly older homes as well), while not raising the tax bill, is a ‘tax’. Wake up and smell the roses; the majority of government actions raise real estate price. Zoning, planning, road-building all perform some action that reduces the availability (supply); and the only reaction can be increased cost to consumers.

    Steve’s argument is that government action is an additional tax even when the tax-bills remain constant …. except when it’s Kaine’s Richmond and individuals all pay far more tax dollars.

  9. Ray Hyde Avatar
    Ray Hyde

    “According to a recent report by Fiscal Analytics, LLC, the potential cost of a one percent reduction in assessment growth could be $58 million per year by 2009. A 20 percent reduction in assessed residential property may cost $1 billion in property tax revenue by 2009.”

    From today’s Fauquier Democrat.

  10. SouthoftheJames.com Avatar
    SouthoftheJames.com

    Gentlemen, good points by all.

    Steve: “I tend to agree that normal market price increases which are not totally counteracted by lower rates do not qualify as “tax increases.” For example, I don’t agree with the argument that Tim Kaine “raised taxes” in Richmond because rates didn’t go down as much as values went up. I’ve taken that position in early versions of this debate. But it is a different thing when the local governing body increases the price of new housing through these proffers, which are a tax because they are not voluntary at all, and thereby artificially (as in an something man-made) raise all values. I live in the same 360 corridor, and frankly see the upside of my rising value and as the husband of a teacher may benefit financially on that end. But for them to argue they are doing this to avoid a tax increase is (to use a technical term) crappola. It’s just a different kind of tax increase. (….tax that fellow behind the tree.). Many of the houses going in now were zoned long ago, and the county’s residential/industrial imbalance has a long history as well.”

    The proffers are quite voluntary in that the county selectively chooses to collect them, and the consumers selectively choose to buy proffered lot homes. No one is forcing a consumer to buy new. It’s similar to the gas-guzzler tax on fuel inefficient cars. If you choose a Hummer, you pay higher % taxes than if you choose a Civic. If you buy existing homes, you don’t suffer. Over time, the actual time-value cost of the proffer is dimished since the costs are spread out over the tenure of the home or life of the mortgage [(proffer)/(years in residence)* (inflation/deflation)]. Yes, many of the developments were zoned residential, but the county is rezoning more land in W. Chesterfield for residential instead of agricultural or commercial, thus limiting other uses and forms of potential taxation.

    “I don’t deny you make an interesting argument, and one I am not statistically able to refute. I’ll take your figures at face value. But here is the problem as I see it. Somehow “new” homes cause a structural deficit but “old homes” have paid their own way. If we make new homes pay their own way up front (through proffers) won’t that eventually mean they have paid too much (when they become old homes)? Who paid for the infrastructure for the old homes? Are we changing the rules mid-stream? The Cost of Community Services figures used to make the argument that new homes don’t pay their own way are based on a snapshot in time. Some economists claim they are critically flawed for that reason, and no case can be made that, for example, rural or farmland costs the county less than residential land. In my county the claim for commercial industrial property is similar to yours ($0.60 in costs per $1 paid) and for farm land the claim is $3 paid for $1 in costs. But no reference is made to new vs old in either case. Surely the government is going to be around long enough to tke a longer view of the costs of a home that may be around for 125 years. I have been in my Alexandria neighborhood long enough to see the kids grown and moved out, a long period of old folks only, and now a new crop of kids. Or maybe, “tax positive” commercial and farmland is just being over taxed. If you take a larger view (and it may be different for your county) in fauquier real estate tax is one third of the county revenue, the rest comes from kick-backs from the state, auto and business taxes, fines, user fees etc. But one way or another, all that money comes from someone who lives – in a house. I don’t believe the case is made that new construction is money loser for the government. It may, however, cause a rather large and uncomfortable bump in capital spending. If communities could arm themselves with an endowment, such a situation could be avoided, but that is prohibited by law, so the only recourse we have is to borrow money or tax people unfairly. Is this a great country, or what? Incidentally, when Fauquier makes that argument they claim 2.7 children per home, but the census says it is only 1.7.”

    The infrastructure of the old homes was paid by the entity that installed the public works – ie. the taxpayers – and/or the proffer amount in effect at that time. When a family moves into an existing home, there is no new outlay of cash to pay for their usage – the system is already there. When a new housing development is built, brand new infrastructure is required, and given the history of human settlement, mass production (100+ unit developments over hundreds of acres) is much more common that small-scale (i.e. the individual landowner contracting his own house). The point about the community paying for improvements is a good one. Actually, from what I’ve been told, municipalities have some flexibility in what they can allow for. Thus, if a county wanted to, they could negotiate with a builder to construct a school in exchange for proffers or other enticements. If the developer presells the lots, then the homeowners essentially become option investors and can front the costs of some public works. But, this requires a kind of thinking that is not presently in the inventory of Virginia local/state government. Other states do a much better job at balancing tax sources, proffers, fees, endowments, etc. than the Commonwealth.

    Just so you know, most of my info comes from agents, homebuilders, researchers and publicly available (but a nuisance to find) data. However, I guess that – despite having purchased one of those newly built cookiecutters in Chesterfield 10 months ago – I’m not very sympathetic with the notion of proffers raising the price of new construction. I don’t know many folks in new construction who are hurting financially, esp. when they could’ve bought existing homes of comparable size in the same school zone for up to 25% cheaper. In talking to nonprofit housing developers (LISC, Habitat, etc.) who build and sell at cost, a fully-equipped 3BR/1.5BA single family home at around 1500 sqft should run no more than $75,000 to build in most areas of Richmond Metro.

    Basically, the biggest influences on new home price increases are:
    1. Regular lot price increases on the part of developers toward builders which are passed on to buyers every 4-6 months – According to local builder’s/sellers agents, the lot prices in some communities go up 10% or more every 6 months just because the markets will bear that.
    2. The additional options and features that buyers add above the price of a standard model home – according to “after-market” contractors (i.e. those who do the work after the house is closed on), builders tack on up to 50% for options (like sodded yards, recess lighting, bay windows, etc). Back on October 2004, those increases alone caused a minimum 5% increase in the base price of a house we stopped negotiating on just one week into the process and prior to actual ground being struck simply because the builder bet that he could raise the prices. For example, Prospect Homes charges between $15-20,000 for a full “brick front” on a house. That’s equivalent to a proffer right there, and the money for the brick front doesn’t go toward defraying the costs of schools, roads and sewer that a buyer will use.
    3. The commissions that brokers tack on and sellers pay (builders brokers will charge at least 4%) – if the builders used their in-house counsel, the commission would be less, but hey, brokers gotta get paid too!
    4. Creative financing available to consumers that makes it easier to buy more house with less money (interest-only loans, combo/piggyback loans, ARMs, relaxes Beacon score minimums, etc) – Greenspan loves talking about this, and with the new bankruptcy laws in the works, these deals will haunt folks, and
    5. Real increases in the price of materials, labor and transportation – anything petrol, concrete or steel has seen hefty price jumps due to global market shifts.

    In a nutshell, proffers being pass on to new homebuyers are not a significant factor in the market choices of consum
    ers, or builders, contrary to what they report. The people flooding Chesterfield, Goochland and Powhatan (Henrico is mostly built out in terms of having an available cushion of land to build on) are not price sensitive to proffers. When they hit that point, then it will signal a larger market correction.

    – Conaway

  11. Ray Hyde Avatar
    Ray Hyde

    What SOJ says is true, but it is in addition to or aside from the issue of proffers. Don’t you suppose that if you try to buy a used home in the area the seller knows that your other option includes paying proffers? That is why the economists say that proffer create a capital gain for existing owners.

    Since proffers are a relatively new feature, I’ll ask again, who paid for the original infrastructure, and over what period of time? And under current law and regulation, isn’t much of that infrastructure included in the development costs? Isn’t that what causes gated communities? They figure, we paid for it, we’ll make it private.

    The things government does that raise values are real things the government creates over time. Creating proffers represents no real value, A three bedroom cape with proffers is pretty similar to a three bedroom cape without, so the one without will sell for near the same price: presto, capital gain at someone else’s expense.

    Except under this plan it quickly becomes everyone’s expense. It’s a charade. And it is a damn expensive way to collect taxes.

    Sure, other factors drive up prices too, and you raise a good point about the cost of sales, bokers fees and all the rest, cars don’t cost that much to sell. I think the high cost of moving is one major factor that will prevent “functional settlement patterns” from happening.

    When was the last time you saw a private builder? The rules so favor developers that an individual can forget about creating a lot and or building. I learned that the hard way – twice.

  12. Ray Hyde Avatar
    Ray Hyde

    Proffers are voluntary?

  13. subpatre Avatar
    subpatre

    “Proffers are voluntary?“
    Duhh! Proffers are voluntary.

    Of course, so is the rezoning you need before you can slap together another 1,000 houses. It’s a voluntary exchange.

  14. Jim Bacon Avatar
    Jim Bacon

    Proffers are “voluntary” in the sense that no one is forcing you to buy the house. You can always choose to live in a locality that doesn’t extract proffers from new homeowners. You can rent. Or you can live with your parents. But they are involuntary in the sense that you can’t choose to buy a house in a proffered district and decide, “No, I’d rather not pay, I already gave at the office.”

  15. subpatre Avatar
    subpatre

    “Proffers are “voluntary” in the sense that no one is forcing you to buy the house.”
    Proffers are paid by developers, not homebuyers. Proffers are a cost of doing business in mass home-marketing, not of home ownership. The correct statement would be:

    Proffers are “voluntary” in the sense that no one is forcing you to rezone enormous tracts of land and slap up housing.

    Development proffers do add to the price (and value) of new tract homes. If there are significant cases where proffers make the difference between home ownership and ‘living with your parents‘ please cite them. The statement is oblivious to the glaring fact that lower-income home buyers have the entire proffer-free older-home market to themselves.

    Since when did the American dream of home ownership become the right to make existing residents support you?

  16. Steve Haner Avatar
    Steve Haner

    I knew this would start the kind of fight I enjoy.

  17. subpatre Avatar
    subpatre

    It’s a shame, too. I’d be perfectly willing to have a serious discussion about government financing (including better models) but nobody’s interested. They’d rather “….start the kind of fight I enjoy.”

  18. Ray Hyde Avatar
    Ray Hyde

    But the whole point of this argument is that older homes are effectively not proffer free, hence the claim of economists that proffers result in 1) a capital gain to existing homeowners that the fist pay tax on and ultimately collect by selling. The proffers affect all homes. 2) they also result in lower prices being offered for raw land. 3)Developers absorb none of the cost, but they do get additional profit, because their proft is figured as a percentage of costs.

    Unless they figure the market will support that price, they won’t build. Proffers therfore have a two-fold affect on home prices because they make new homes relatively more rare. Also, in order for a used home to become available, someone is going to have to pay a proffer, therefore existing residents stay put, making used homes more rare as well.

    Proffers only make it appear that new residents are supporting themselves. Actually, the costs are spread around, just as without proffers, except now you have the enormous expense of negotiating the proffers.

    Calling them proffers is just a cute way of avoiding calling them either bribes or extortion, depending on your point of view. The word bribe means “a little gift” which is given and received with the expectation of a change in behavior. In that sense it is voluntary. Extortion on the other hand is a one sided abuse of power.

    Actually, you pretty much are forced to develop large tracts of land, based on the zoning ordinances, a single builder cannot proceed, let alone succeed. I might like to build one modest home for a teacher, patrolman, or farm manager. But the procedure to do that is so expensive, proffers aside, that the only way I can do it is to spread the cost over five or more homes, zap, new subdivision, and, because of the design regs, zap, new ugly subdivision.

    It is true, no one is forcing you to slap up masses of housing. And no one is forcing us to procreate 20 million new residents. But those people are going to happen and they are going to live somewhere. Maybe you would prefer we support them in homeless shelters. You don’t have to pay the proffers only if you choose not to build. Proffers are, therefor, an incentive not to build housing, which is probably their real purpose. “I didn’t move out here so I could be surrounded by other people, so I’m going to disincentivize my neighbor from doing what I did.”

    Given that we are going to need the housing, we have to ask ourselves, what are we thinking?

  19. subpatre Avatar
    subpatre

    “…. we have to ask ourselves, what are we thinking?”

    We’re thinking that continuing to subsidize developers –making existing residents pay so that others can profit– isn’t such a good idea. You think existing property owners should pay for the new facilities needed by new arrivals.

    Saying it’s better than “support them in homeless shelters” demonstrates the shallowness and desperation of the position.

  20. Ray Hyde Avatar
    Ray Hyde

    What I’m saying is that existing property owners are paying anyway, and that thinking that proffers makes it different is a sham.

    If we don’t build them here, they will get built somewhere else, which is maybe what we really want after all. If that is the case, then lets be clear and honest about it, and not hide behind some tax argument.

    But this beggar thy neighbor approach is an example of why “better land use patterns” is not likely to happen, and why regional planning makes the problem bigger, not more tractable.

    Aside from that, it is a terribly inefficient and expensive means to pay for infrastructure. If we really want lower taxes we should go after both the projects we want and the means to pay for them in the most efficient manner.

    I’m not a builder, own my own home, and I am not now or likely to be paying any proffers. I still think they are costing me more than some other plan, although I concede I don’t know what that plan is.

    Another facet of this is, that if you follow the notion that everbody pays their own way, then you are likely to lose, in the end, your ability to prohibit what you don’t want.

  21. SouthoftheJames.com Avatar
    SouthoftheJames.com

    I think that people’s geographic regions are clouding the discussion. In Northern Virginia, the issue of proffers is more pressing because there is a problem in both the supply of raw land available for development and the supply of existing homes for sale. Thus, in a market like that, where there are constraints on alternative forms of housing, then the proffer burden is higher.

    However, in Greater Richmond, where land is not as scare (outside of the city and parts of Henrico), proffers are both a form of growth management and revenue expansion. There are still tracts available for large and small builders in most of the metro counties – Chesterfield, Goochland, Powhatan, New Kent, Hanover, Prince George, etc. Thus, home buyers are not comparing proffered neighborhoods to non-proffered, as much as they compare the prices in one locality over another, with proffers factored in.

    This discussion seems be a theoretical one with a general sentiment against taxation and other forms of additional government revenue generation, NOT the actual economic – supply, demand, opportunity cost, subsidy, freeridership, etc – reality of proffers. Again, in a moderately-hot market like Metro Richmond, the actual proffers assessed AND COLLECTED (this is key since the builders in Chesterfield, for example, have only ponied up 1/5 of “required” proffers each year), at best add 5-8% to the price of the homes being built. There is virtually NO new construction happening in the private developer market below the $300,000 price threshold (4BR/2.5BA). In metro Richmond, there is not a shortage of either raw land or existing homes, thus homebuying is driven by other factors like commute times and school scores.

    As for who paid for infrastructure to support the existing homes, the answer is “taxpayers.” Most of that infrastructure was/is funded through municipal bonds that the counties pay off over time. Thus, existing and new homeowners eventually share the burden. The upside of proffers is that they allow the counties to capture some of the increasing costs of infrastructure since the materials and land (Kelo notwithstanding) used in the building of that infrastructure have gone up over time in a manner that outpaces the growth of local and state revenues (Warnertax notwithstanding).

    The fact remains that if you want new schools, new roads, new public utilities, then the money has to come from somewhere. As justice Holmes said taxes are what we pay for democracy. The problem with our current system of taxation & fees is that it flies in the face of the notion that we should expect to pay more the closer the public good is to us. Thus, if conservatives really want to help, they should first focus on reducing the federal tax burden that the People in their respective states can raise funds among themselves in the exercise of their sovereign state & local responsibilities. Otherwise, extending the general anti-tax sentiment down to the municipal level is simply political trickery.

    — Conaway

  22. Ray Hyde Avatar
    Ray Hyde

    Thank you SOJ. Excellent analysis.

  23. Steve Haner Avatar
    Steve Haner

    Subparte: (who are you? Should I know?) Spirited arguments among intelligent people who cite evidence instead of ideology, that’s what I mean by “the kind of fights I enjoy.” And I suspect you do, too. But I’ve been trying to do some things for paying clients, so I’m kind of on the fringe today.

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