Thumbs Down on One Amendment, Thumbs Up on the Other

Bacon’s Rebellion doesn’t do candidate endorsements — this is a public policy blog, not a political blog. But we do express our preferences for and against proposed constitutional amendments. And it happens that there are two proposed amendments on the ballot this year. The first one reads:

Should a county, city, or town be authorized to provide a partial tax exemption for real property that is subject to recurrent flooding, if flooding resiliency improvements have been made on the property?

And the Bacon’s Rebellion answer is, “No.” As a guiding principle, we oppose special exemptions and carve-outs from taxes. Taxes should be applied consistently across the population. Granting breaks to one group encourages other groups to lobby for special treatment as well. The accumulation of exemptions over time erodes revenues, which forces tax rates higher.

In rare instances the benefits of a tax exemption may be so compelling that the general principle can be ignored. This is not such a case. The idea behind the amendment is to reward property owners for making properties subject to recurrent flooding more resilient. A classic example would be to lift houses onto stilts.

My question is simple: Why would we want to encourage anyone to build or rebuild in a floodprone area, no matter how resilient the construction? There is a much better way to give property owners an incentive to make their buildings more flood resistant — it’s called flood insurance. Government should stop subsidizing flood insurance and make people pay for the risk they’re taking when they build in areas subject to periodic inundation. You’ve made your house more flood-proof? Fine, get a break on your flood insurance rates — not your property tax bill.

Making an individual property more resilient does nothing to make the government infrastructure serving that property more resilient. If anything, local governments should make property owners pay higher property taxes for locating in floodprone areas so they can afford to pay for hardening and repairing the roads, bridges, and utilities that make those areas habitable. Granting tax relief is the diametric opposite of what needs to be done. This proposed constitutional amendment is a fiscal folly that would only compound growing liability in coastal areas.

The second amendment reads as follows:

Shall the real property tax exemption for a primary residence that is currently provided to the surviving spouses of veterans who had a one hundred percent service-connected, permanent, and total disability be amended to allow the surviving spouse to move to a different primary residence and still claim the exemption?

This amendment also violates my stricture against tax exemptions and carve-outs. And there is no compelling public benefit that would warrant an exception. So, I see no logical reason for the amendment. But I support it anyway on purely emotional grounds.

I have seen veterans permanently disfigured and disabled from IEDs, and I feel strongly that there is no way our society can fully compensate them — or their families — for their sacrifices on behalf of our country. Granting a property tax exemption to surviving spouses is big gesture affecting a relatively small number of people. There is no moral hazard here. The subsidy won’t encourage soldiers to run off and get hideous war wounds. Women won’t start marrying disabled vets so they can get a tax break after their husbands die. Unlike subsidies for property owners in floodprone areas, we won’t get more of what we don’t want. So, although I harbor strong reservations about the amendment, I’ll still vote for it.

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25 responses to “Thumbs Down on One Amendment, Thumbs Up on the Other

  1. Yikes! Bacon and Galuszka agreeing… cats and dogs lying down together… What is happening to the world?

  2. My default position on constitutional amendments is no until I’m convinced its necessary. I have no objection to the veteran’s property tax amendment and it can only be done this way, apparently. The other one, providing a property tax break to those who want to live in the flooding danger zone, is positively insane. Tempted to look up the patrons….

  3. I noticed Peter omitted to note that Sen. Time Kaine was on the take just like Gov. Bob McDonnell. But considering that Peter was writing for the Ministry of Enlightenment and Propaganda, it would not surprise me that Peter included the pertinent information but had it deleted from his op-ed because the Post knows only Republicans can do wrong. After all the Post endorsed Bill Clinton twice despite allegations of sexual abuse and Hillary Clinton once despite maintaining that every woman making allegations of sexual abuse against men must be believed, unless those allegations are made against Bill Clinton. Those allegations are to be rejected because the women making them are trailer trash.

    In any event, Peter makes a good argument against the amendment for tax relief for property owned in flood plains.

  4. These should both be local questions decided at the county, city or town level. Why does the Imperial Association of Nanny Clowns in Richmond think this is a centralized state level question? Is it really sensible to have politicians from districts high in the Blue Ridge Mountains deciding how local taxes should be raised and used in Hampton Roads?

    Virginia desperately needs a new state constitution that de-evolves most decisions to the local level.

    The government that governs closest to the people governs best.

    • If passed, I think these do remain local options….but localities only have the option if the constitution (which of course is binding) is amended. Unless you want 140 different local constitutions (and maybe you do….)

  5. I certainly agree also but I suspect this will be an interesting vote with folks who own property in flood-prone areas (to include both coastal and inland rivers liking it and others .. who knows.. because these two constitutional amendments are below the radar and the surviving spouse one convincing those who have not seen either ahead of time as similar efforts to “help” others.

    Both of these are double-whammy measures where taxes are cut for one group and unless spending cuts are made – the other groups will have to pay higher taxes to make up the exemptions/credits.

    In both cases – taxpayers are entitled to have some idea of the cost ahead of time in my view and especially so on the flood one – they need to know just how much land and tax revenues are affected.

    If we really are going to see higher and higher tides and surge flooding in the coastal areas – many of those counties are going to have a problem anyhow and if FEMA flood insurance goes away – those counties may well end up financial basket cases as land values plummet and people do not rebuild.

    • But both are property tax issues which are intrinsically local. Why is this a state-wide question? The vast majority of Virginia is not prone to recurrent flooding.

      • I know you don’t care for Dillon but the plain fact is that localities would do all kinds of crazy discriminatory stuff – like special tax rates for rich constituents, or speed traps, etc.. if it were not for a strong state government. Even Home rule localities still have to abide by State rules… the only difference is more flexibility but we can’t have separate criminal justice laws for each locality…

        And actually all across Virginia -if you haven’t notice lately is experiencing flooding along rivers that has never been seen before – in a thousand years. We’re now seeing 100 year and 1000 year floods every 3 or 4 years… and “flood prone” has become much more widespread.

  6. I am exactly the same as Steve H woud say NO and let somebody tell me why this is needed.

    Peter’s position is interesting as the Dems have been 100% in favor of Question #1, so it is the Repubs with some opposition.

    Bugs me we never get the full story about who and why recommended these things in the first place. Peter’s article is the most helpful thing I have seen describing the “need” for this rule, and who is behind it. Jim’s post is good timing as I also have been wondering.

  7. The “flood” amendment has the potential to create a two-tier property tax system where folks who build expensively on waterfront -essentially get subsidized… much like folks that have a lot of land and put it into a “conservation” easement – they still own the land – the public cannot access it – their taxes on it get dramatically reduced.

  8. Comment posted on behalf of Steve Emmert:

    I was interested to read your take on the flooding-resiliency amendment, and also the comments on it. Please allow me to offer you a perspective that probably isn’t there now: I actually live in one of the affected communities. My home backs up to a portion of Dix Creek, an arm of the Lynnhaven River in Virginia Beach. I wonder how many of your current commentators are writing from the “uplands,” so that recurrent flooding is something that happens to someone else.

    The idea that we need to preserve uniformity in taxes is fine in principle, until you realize that there is nothing like uniformity now. All you have to do is cross a city line. Down here, the real-estate tax rate in Portsmouth is $1.30 per $100 of assessed value. In Norfolk it’s $1.25; in Chesapeake it’s $0.93. Here in Virginia Beach, there are (get this) ten different real-estate tax rates, depending on whether you live in one of our Special Service Districts. They range from $1.00 to almost $1.50. The concept of equality is a myth.

    Mr. Rippert is correct: This is a local issue that should be decided on a local level. If this amendment passes, and the Virginia Beach City Council ponders whether to approve a partial exemption, opponents of the proposal can come to the council meeting and voice their opposition. That keeps the debate, and the political consequences, local.

    One last point: From a fiscal perspective, the amendment makes economic sense for affected areas. If the owner of a $500,000 home loses it to flooding and doesn’t rebuild, there goes about $5,000 a year in real-estate taxes, in perpetuity. Would the affected City prefer to knock $400 a year off as an incentive for flood-control measures? (I just made up the amount of the incentive, but you get the idea.)

  9. The point about the different jurisdictions tax rate is valid but weak. The difference in rates usually reflect differing levels of services. Counties typically offer less services than towns or cities.

    But what we’re still talking about if cutting taxes on one property owner and raising them on another to make up the shortfall and I predict that’s going to be a potent issue because those flood prone areas are actually going to cost more in services and infrastructure than the non-flood prone areas.

    If the flooding gets progressively worse such that more and more money is needed to deal with roads, bridges, water, sewer, electricity, schools, etc… it’s going to be a losing battle fiscally.

    Banks and mortgage companies are going to have concerns about the value of properties even if they get a lower tax rate.

    The answer to this is not going to be easy and if a given area is projected to have ever increasing flood recurrence – it’ll be bad money after good.

    FEMA has, in theory, given folks one bite at the apple when they suffer a loss. They get one-time compensation but they have to move – no more insurance.

    Not sure how you mimic that at the local level but something like that has to be in the longer term strategy. Properties that are doomed – are doomed and you can’t fix it pouring more money into it.

  10. Dillion Rule is a pain when it prevents a locality from doing the right thing, but in this case we would need example of this concept working in other states.

  11. there’s an irony here with respect to Global Warming and increased flooding in that the argument against doing things to reduce GW is said to be so horrendously costly that it would seriously harm the economy.

    But if this is an example and we look at the full magnitude of the “damage” and the cost to attempt to mitigate it – that could end up much more costly.

    Also – the skeptics seem to reject the connection between GW and flooding but for some reason they do accept the predictions of more and more flooding instead of questioning those predictions also.

    At any rate – if we look at ALL the infrastructure and structures in Virginia alone that will be subject to flooding (if you believe the predictions) – one might wonder how much money is involved… just for Virginia alone… I suspect it will be billions even trillions.

    • Don’t forget for Hamption Roads, aside from climate change, we have groundwater depletion, naturally sinking land, and slow background rise in sea level even without climate change, so if in addition we have significant climate change impact, that makes it a quadruple whammy of reasons for more flooding.

      • Thank you, TBill. I had made the point so many times that I didn’t think it needed repeating.

        I would add only this in response to Larry’s comment: We know that sea level rise is contributing to increased flooding in Hampton Roads because we can observe it directly and measure it. Forecasts based on climate models that the sea level will rise 10 feet (or whatever the number is) by 2100 are just that — forecasts. Enough predictions made 201 years ago about calamitous effects of global warming have gone unfulfilled that Virginians are totally justified in basing policies on facts rather than forecasts.

        • No one holds the Climate Change Warriors responsible for any prediction that doesn’t come true. It’s just like the WaPo. Free to make up anything and to ignore prior mistakes while holding non-believers responsible. The Post attacks Judge Kavanaugh while endorsing sex abuser Bill Clinton twice. And then giving Hillary Clinton a free pass to insist all women who make allegations of sex abuse be believed, while exempting the trailer trash that accused Bill of sexual abuse.

          I’d like to hear some “Yes, we’ve made mistakes. Our ability to predict the future is far from perfect. Here’s some of the mistakes we’ve made and how we are trying to get better.” This approach would increase the credibility of those making claims about climate change. But climate change warriors see the end of controlling the economy as justifying any incorrect claims that they make.

          • re: ” I’d like to hear some “Yes, we’ve made mistakes. ” Do you expect that from all those Hurricane prediction “failures”?

            Do you think the folks who predict hurricanes are bogus “hurricane predictions” warriors who lie so they can financially benefit ?

            I hate to tell you guy – but forecasting is not a bullet-proof endeavor.

            They all use models which if you look at hurricanes are many and not perfect but do we say they should admit they were “wrong”?

            Nope.

            why not? Should we go after them for being “wrong” about their predictions?

            Do you want to sue those science guys that said we got ozone holes from CFCs and now folks say they were wrong?

            how far do we go with this?

        • Are those “forecasts” being believed ? For instance, are we looking at what happens to Hampton Roads in terms of future predictions? Are we talking about what to do about it? You bet we are. Even DOD is. So why does DOD plan for flooding if it’s all a bunch of hooey?

      • re: ” Don’t forget for Hamption Roads, aside from climate change, we have groundwater depletion, naturally sinking land, and slow background rise in sea level even without climate change”

        and do those non-climate predictions also come from scientists?

        why would we believe them about subsistence either?

  12. I see from the Sampe Ballots at the polls that both Dems and Repubs were recommending a YES vote on the Flood Tax question, so those of you voting NO are, well let’s say, naughty.

    …or, for Mr. Bacon (Dr. Bacon?), perhaps I should say “Rebellious”.

  13. Well I took Haner and Tbill’s advice and voted no – twice.

    But HEY – if DJ had his way , he’d put Dillon on the ballot!!!!

  14. So what the h__ is a “flooding resiliency improvement”? Raising the house on pilings is one thing; a few sandbags placed across the front steps is quite another. And in any case, most such “improvements” only buy time by accommodating a small increment of sea level rise, say a couple of inches on average, not the substantial rise forecast by 2050 (which is, let us admit to ourselves, 32 years away, which is to say, no further in the future than 1986 is in the past – and which among us considers 1986 to be that long ago?). This is a classic case of kicking the can down the road until it becomes the next generation’s problem — a favorite past-time these days.

  15. re: ” not the substantial rise forecast by 2050 ”

    the heck you say – WHO says it will rise by 2050? those lying scientists?

    😉

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