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Joancrystal
| | Posted on Thursday, March 22, 2001 - 5:45 pm: |     |
Its human nature for each of us to view the impact first of revaluation and then of possible phase in from the perspective of "how is this going to effect me?" before going on to the realization that how this effects everyone IS PRECISELY HOW IT WILL EFFECT ME!!
Posters on this thread and other related ones fit several clear patterns which are typical of large groups of people in town. They include:
The homeowner (any part of town) who bought a house just a little more expensive than what he/she/they could actually afford in the hopes of a better school system, a safer neighborhood, a better address on that resume, an expected new job that may never have materialized, etc. This person either has been hit with a very tight budget for years which they now feel may not have been justified (respect their feelings even if you don't agree with the beliefs which gave rise to them) or is now being hit with projected increased taxes for the first time which suddenly makes their financial position untenable.
The senior citizen, recently retired, whose budget is smaller than it used to be but who thought with a few economies he/she/they would be able to stay in thir home of many years which has become a part of their being over the years and now realizes that they can no longer afford to keep their home.
The person whose home was reassessed for no apparent reason at a rate change very much higher than that of any property around them (possibly for blocks) who couldn't possibly have expected to be faced with "an increase as big as this" and now has to budget accordingly - if he/she/the/can.
The person who has always had a we/they attitude and sees the results of revaluation as just one more thing to cite in showing what is wrong with "the other part of town".
The opportunistic politician looking to launch a campaign or possibly a career by further inflaming an already sensitive issue.
The poor person caught in the middle of all this who is just trying to defuse flare-ups and try to find possible workable solutions.
The person who is hiding his/her/their head in the sand just hoping the problem will go away.
Do all of you see yourselves in at least of these situations? Can we all agree that each of us is faced with a very real problem and that there will be no win/win for anyone as a result of this except maybe some of the local realtors?
Please try to be little kinder and a little bit more undersanding to those facing the opposite problem from the one you are.
Now lets get back to the original job of trying to make some sense of this so the entire town doesn't suffer as a result of what has been done to us! |
Nakaille
| | Posted on Thursday, March 22, 2001 - 5:47 pm: | |
That must be why I did not address my "simple greed" comment to Beach directly, Nil. I know that Beach lives on the east side of town. And I am absolutely THRILLED that Beach's finances are such that he or she is willing to contribute to the charitable cause of the unfortunate citizens whose home values have skyrocketed. I am not. And I still think there are many other options that some people seem simply unwilling to even explore because they have the misguided notion that they need their money more than I need mine.
Some folks seem to be offended by the fact that I give concrete examples of my finances. But this is not just a theoretical discussion. I don't know how else to make people understand that I am not in a position to fund others' taxes. And you can't really believe that it is selfish of me not to want to. Whether it is 2 years or 5 years, a phase-in means continued money lost and given outright to folks who actually have a heck of a lot more in assets than I do. If all they want to do is sit on their assets, that is their choice. I don't have to pay for their choices, do I? I'm just not buying this scheme. That's all.
Eliz offers a very different viewpoint from Beach and Face and Dytunck on another thread. From the perspective of someone whose taxes are INCREASING. I suggest you read it.
Bacata |
Beach
| | Posted on Thursday, March 22, 2001 - 7:49 pm: | |
Sue the TC for the 10-20 thousand you perceive the town owes you from the last nine years. Good luck! Oh, wait, they'll just point their PC fingers to the TC from 1981- as if anyone actually buys that lame duck excuse. I can't wait to turn my house into my DREAM HOME with the extra 250-300 dollars I THINK my taxes MIGHT go down!
Nilmeister's right! I DO live on the east side- I could be your neighbor!! We should compare furnaces. A buddy of mine told me I could probably sell the antique parts and make more than I would on my supposed tax decrease. |
Nakaille
| | Posted on Thursday, March 22, 2001 - 9:06 pm: | |
You continue to avoid the question of why those with smaller assets should assume the cost of financing those with larger assets. And why there should not be any choice in the matter. Please, give all you want and more. You want to play banker or philanthropist? Go for it! You want to start a foundation to give grants to people owning homes worth several times yours? Go, man, go!
Pray tell, though, why are their needs so much more legitimate than mine? Because they refuse to research options and take appropriate actions that are in line with their economic realities? I wouldn't have thought you would be such a strong supporter of welfare. Maybe I'm wrong.
Bacata |
Mlj
| | Posted on Thursday, March 22, 2001 - 10:16 pm: | |
As far as a proposed phase-in of tax increases/decreases resulting from the revaluation...wouldn't this proposed phase-in apply to all increases and decreases? And, let's say, if I am looking at a $2,000 yearly reduction in taxes based on the current revaluation, what would be the approximate dollar amount extra in my pocket per year with a phase in vs. the $2,000 per year with no phase in? |
Nakaille
| | Posted on Friday, March 23, 2001 - 12:09 am: | |
That's the problem, Mlj. A phase-in that is not financed from other/outside sources means money continues to come out of your pocket if you are expecting a reduction. And there is no plan to repay you at the end of the phase-in. You're just out the money, whether it is all or just part of your $2,000 per year. And if you are scheduled for that reduction, it is proof in itself that you have already paid disproportionately in the past.
Plus, the 2000 you lose today buys more than any 2000 you could possibly get back down the road (one of the many reasons for lenders to charge interest.)
Bacata |
Njjoseph
| | Posted on Friday, March 23, 2001 - 9:13 am: | |
Joan, when I bought my house last year, I knew what I could afford. I may push the envelope a bit, but IT IS NOT YOUR RESPONSIBILITY to help me out now that my taxes are going up. I may have made a bad decision, but IT IS MY OWN decision. And btw, it wasn't a bad decision. And I've also responded to the stock market falling and have NONE of my short term money in it (i.e. 1-2 years). Only my retirement plan is in stocks right now.
This reval is not new to the financial problems senior citizens face. Keep in mind that there are many, many seniors on the east side who need this tax reduction.
Honestly, I DO care about my neighbors in Maplewood. However, I don't think that their being forced to move out will be a bad thing for Maplewood in-and-of itself. You'd have to come up with many reasons to convince me otherwise. |
Nilmiester
| | Posted on Friday, March 23, 2001 - 9:44 am: | |
Someone on this board once said, hey they don't mind living in the same town as lawyers/stockbrokers but just not too many. I do not want the older Maplewoodians to leave. We already have plenty of new folks from NYC and Brooklyn. The older folks bring a sense of community and a history of this town that would be lacking if we force them out. Just my opinion. |
Njjoseph
| | Posted on Friday, March 23, 2001 - 10:04 am: | |
Nil, you're correct, but there are 2 sides -- remember that some of the seniors have been trying desperately to hang on to their Maplewood houses, but if they are getting decreases they may be able to stay. |
Nilmiester
| | Posted on Friday, March 23, 2001 - 5:24 pm: | |
Most of the seniors I know are leaving because of a tax increase. I have not heard of any that were leaving and now are staying due to the decrease. |
Joancrystal
| | Posted on Friday, March 23, 2001 - 5:41 pm: | |
Njjoseph:
I won't be one of the people supporting your tax increase if revaluation goes through. Certified originally valued my home at 5 times the assessed value in 1981. One appeal to Certified, one class action appeal to Mr. Galante, and one individual review by the imported tax assessor panel later, that increase has dropped significantly but I am still looking at an increased valuation of over 4.4 times the 1981 assessment. It is highly likely that you would be supporting my increase if phase in was adopted.
I agree with you that it is not the responsibility of any individual in town to offset the sudden financial burden being placed on any other individual but this discussion really shouldn't be about individuals should it?
If we implement a phase-in proposal similar to the draft posted a few days ago, we would be helping some people to stay in town but we would be doing it as the expense of others - no matter how we approach it. Unless the money to offset the very large increases faced by some is raised through some highly successful fund raiser, the monies collected would not be voluntary. We could lobby to offset increased property taxes to support higher education costs with increased State income or excise taxes but we would still be paying those taxes! At least now we have a good idea of where the school tax money is going to.
Yes, I realize that we have seniors and others on limited incomes in both the high increase and high decrease categories. Sacrificing one to help the other won't solve much.
The only solution to this problem would have been to anticipate it in the first place and come up with an initial approach to reval that made more sense.
Nilmaster:
As a native of Brooklyn who lived in Manhattan for several years before coming to Maplewood 20 years ago I take exception to your Brooklyn crack. However, I applaud your recognition that Brooklyn is definitely a separate country from NYC. Keep those passports handy when you are crossing the East River! |
Face
| | Posted on Friday, March 23, 2001 - 10:44 pm: | |
Helping others at your own expense, many of us do it everyday. As a matter of fact, that is the basis of how social security and insurance work. Think about it ! Especially you Nakaille Bacata.
Our system certainly isn't perfect, it attempts, to a large degree, but not always successfully, to redistribute the risk. Hey, two more years, or three, for a phase-in, gets you what you've been told you deserve, equitable tax rates for all.
Sure, you feel that you are subsidizing the rich. You may even be right in some cases. Yet, how about walking a few miles in someone else's shoes. Once the full phase-in has been accomplished, you might even experience many years before another reval has this kind of impact.
All I'm saying here is that it hurts doesn't it. Well, paying for other people by spreading the risk around is a better solution than what the other alternative is for a majority of the people. It tends to protect the ability of our town's residents to survive.
Go ahead, and be out for your own interests. Do it now with this tax issue. It seems contrary to the beliefs that you write in most of your posts. It seems hypocritical almost.
I was a Liberal when I was younger. I felt that way until, I learned what it felt like to pay taxes for the benefit of many others, I paid a lot of tax. Now I am more conservative in my views. Paying for others tends to make you question how your taxes are being spent.
Are you becoming more conservative? Is the shoe on the other foot? You should think a little more. You'll see without much effort, that roles do reverse. Especially, when you start paying for others, you start to want to have more say about how your money gets spent. |
Joancrystal
| | Posted on Saturday, March 24, 2001 - 7:13 am: | |
Here's my proposal:
Preparation:
1. Start with the real property values placed on each property once the tax court dust settles. Enter them into a database. Make the database available on line, at the libraries, townhall, etc. Allow interested parties such as realtors, attorneys, taxplanners, CCR and neighborhood groups to purchase their own copies for a fee which covers the full cost of production and handling.
2. Eliminate the neighborhood concept as we presently have it. Combine the existing neighborhood groups into the 20 groupings for which different formulas were developed.
3. Sort the database by formula grouping. Establish bandwidths based on actual 2001 assessed value as defined above. The houses in your bandwidth become your comps -- regardless of how the final assessed values were arrived at: no more sneaking into the neighbors house late at night to covertly count the bathrooms or measure the basement.
4. Issue a revised record card to everyone whose assessment was changed since th last cards were issued. People have a right to know exactly how their FINAL assessments for the year were arrived at.
5. Make everyone aware (mailing to all residents?)of the availability of the data base and establishment of the bandwidths so they will have the basis for appeals in future years if merited.
Implementation:
1. Reassess each property at the time it is sold for the new owner (not retroactively). If a house was assessed at $350,000 and it sold for $400,000, it should be immediately assessed for $400,000 (whether or not this was an at arms length sale). The assessed value = The market price!
2. Pass a town ordinance if necessary to require realtors to inform prospective purchasers of what the actual real property taxes will be based on the sales price agreed to when the house is ready to go to contract. This figure can be based on the most recent tax rate if the budgets have not been finalized for that year at time of sale.
3. Review the real propery assessment on a home whenever a major capital improvement is made.(new addition to the house, major change in HVAC, fully remodeled kitchen, added bathroom, new deck, etc.) Adjust the real property assessment at that point to reflect any increase in property value resulting.
4. Review the real property assessment for any home suffering a significant loss due to fire, flood, or other natural catastrophy. Similarly, reexamine assessments for houses where conditions may have changed due to significant code violations, shift in traffic patterns, nearby amenities etc. Make immediate changes to the assessment to reflect those changes.
5. Set triggers in the main database. If a set number of properties in a specific bandwidth (that property's comparables as defined above)sell for a price significantly above or below the range of their bandwidth, review the assessments of other properties in that bandwidth AND the bandwidth in which the properties would then be placed as a result of those sales. Review and if necessary adjust the assessment of any property whose value has changed markedly as a result of that sales pattern.
6. Notify affected property owners of these changes in sufficient time for them to prepare appeals to the County if they see fit.
7. Post/Publish the revised database annualy (see point 1 under preparation) allowing sufficient time for taxpayers to review any changes to their bandwidth (comparables) and make appeal if desired. |
Joancrystal
| | Posted on Saturday, March 24, 2001 - 9:21 am: | |
Effects:
1. Prospective homeowners would know in advance exactly what real property taxes to expect on their new home -- less sticker shock.
2. Property owners would have to tools to serve as a more effective check and balance to the Township Assessor and any future consultants who might be called in for a revaluation -- fewer cries of "we never expected this to happen ...." when the next full reval rolls around.
3. Plan would enable quicker and more equitable reaction on the part of the Town Tax Assessor to
"sudden" programmatic and structural changes that impact on property value: patterns of increased or decreased sales prices (as compared to assessed values) would be identified more quickly. Their causes could be deduced more readily: soccer moms flocking to buy houses near the new soccer dome, reaction to new or revised jitney routes, changes in traffic patterns (will Elmwood become the next Springfield?), etc.
4. Tax payers would have access to better information on the comparbles and hopefully a clearer understanding of the valuation process. Those appeals that were filed would be apt to be based on cogent reasoning: keep the Assessor on his toes and cut costs of fighting clearly losing appeals in court.
5. The plan could encourage the stabilization of some parts of town. Since properties would mostly be up for review when a significant number of similarly situated homes sold, people with little turnover in their comparables group would be encouraged to stay in their homes longer. Values on the few houses in those areas that went on the market would eventually rise because of the desireability of the stable neighbhorhood.
This plan accepts the inequities which resulted from revaluation as a done deal for the moment but does not condone them. rather, it provides the maximum ammunition to fight these inequities on a case by case basis with the Township Tax Assessor or in tax court. Hopefully, it will eventually help those who take advantage of the public information provided to understand the root causes a bit better. This still doesn't help the people facing substantially high real property tax increases they can't afford or those who are in fear of making home improvements for fear of raising the value of their own property and of properties around them.
I still have no solution for the high increase group, which is a pity since my increase is way higher than average. An influx of money from some source which won't cost the rest of us a whole lot in subsidization is the only viable solution. Phase-in really doesn't do this. Maybe we can get a corporate sponsor to donate start up funds for low interest/no loans in the interests of contributing to neighborhood stabilzation or as a noble social experiment. If not, our only other option is the fund raiser I mentioned somewhat earlier in a mostly facitious comment.
The second problem dealing those in fear of fixing their homes could be approached through a variety of programs.
1. Improve the town's code enforcement program. Charge a penalty equal to the assessed value of the needed improvements under current formula if necessary to encourage home improvements where the health, safety and well being of the home's occupants and/or their immediate neighbors are threatened.
2. Provide the code inspectors with information on grant, loan, and sweat equity programs which exist that could help the homeowner make these improvements.
3. Set up a shelf of home improvement reference works in the library. Make sure that they are in a format that can be copied. Organize some library volunteers to post the most fequently requested materials on a web site and links to the home improvement aid program information. Check the links periodically to be sure they are current(still active) and up to date.
4. Arrange for home improvement courses through the Adult School. Look into the possibility of providing scholarships for those who can't afford the tuition.
5. Newcomers used to have a home improvement coop group. At least one of the churches in town, I forget which, has had a program helping community residents make emergency repairs to their homes. Get a town-wide group started. See if a corporation (Home Depot?) will donate supplies free or at cost for the publicity that such a program could attract. Maplewoodians are good at getting regional publicity. (Remember trhe bomb factory in the basement? That got us world-wide attention.)
6. Provide links through Maplewood on line to all this stuff.
I could go on and on but I'm getting tired and my mind is starting to wander.
Please, tell me what the rest of you think. |
Octofoil
| | Posted on Saturday, March 24, 2001 - 10:55 am: | |
Joan,
Whew! Thats a lot to digest! You have obviously been giving this a lot of careful thought. While your proposals will take a little time to digest in total, particularly from public policy perspectives, there are a couple of very interesting concepts that jump out right away.
The points concerning increasing public availability to information, to data and to processes are quite good, IMHO. Despite the increasing ubiquity of the Internet, there still remains a lot that can be done with it to facilitate public awareness of issues and day-to-day life management. And not just the Internet: from all appearances, township governance has just begun to scratch the surface of increased productivity via computer usage.
Secondly, several of your proposals directly involve realtors. And involves them in a way that will/might require code/ordinance changes. While your proposals might make all kinds of sense to us as consumers, some input/comment from the local Board should be sought-in the spirit of "have we got this right? have we missed something? can we accomplish the desired purpose in a better way?"
All in all, quite a lot to think about! Excellent work! |
Joancrystal
| | Posted on Saturday, March 24, 2001 - 12:42 pm: | |
Octofoil:
Thanks for the kind words. I quite agree that we need to get the local Board of Realtors involved in any serious discussion of the types of changes I have proposed. We need to get a lot of other groups in town, the Town Planning Board for example, involved too. I welcome any input. This was just intended as a quick sketch to get people thinking in the hopes that we might see some well thought out local input Tuesday night. I'm only sorry that a prior commitment will preclude my ability to be there in person.
A lot of considerations have been left out of my above two postings. Much more thought and discussion is needed. People with very different approaches to suggest should post their plans so we can take the best of each.
One thought that just occurred to me, after I closed my last post in sheer exhaustion, is that my proposal makes no mention of multi-use properties which are presently being treated as single family residential: the business operated out of the spare bedroom, the unreported tenant who is paying rent to the home owner for bed and board or garage space. There should be a provision in the plan to add an adjustment factor to include a portion of the profit being made from what is really a commercial enterprise. The exact mechanics will require a lot of thought and research and the application in each instance may depend on a great many variables.
I will post additional thoughts as they occur to me. |
Nakaille
| | Posted on Sunday, March 25, 2001 - 12:02 am: | |
Joan, if these are your sketches...wow...You are quite the artist! Nicely done, incredibly well for a beginning effort! Lots of good stuff to ponder. I hope the TC takes good notes on your ideas. I don't recall what your vocational/professional background is but you certainly have a knack for creative problem solving! Thanks for making the effort and sharing it with us.
Bacata |
Townie
| | Posted on Sunday, March 25, 2001 - 11:07 am: | |
Joan,
You might be interested in the Scottish council tax as a means of taxing for municipal services. It some ways it appears to resemble your proposals.
http://www.scotland.gov.uk/library3/localgov/ctvb-00.asp
In the UK, the council tax has replaced Margaret Thatcher's infamous "poll tax" (a flat tax she called "the community charge" which caused riots in London). Thatcher's poll tax taxed people, regardless of income, essentially because they were alive.
John: I don't know if you're still visiting this thread but I noticed that in an eariler post you proposed a form of head charges for school use which I imagine can't be done constitutionally. The NJ state constitution specifically requires that public school be made available for free. Also, I also thought you might be amused to know that one of the most famous tax revolts in history, the English Peasants Revolt of 1381, began in Essex County (in a town called Brentwood, not Maplewood) because of an attempt to impose taxes similar to some being suggested in this thread (base taxes, flat taxes, and other taxes whereby the less wealthy parts of Essex were taxed to subsidize the lifestyles of the wealthier parts). The upshot of the Peasant's Revolt was that armed rebels persuaded King Richard II to execute those who had suggested the taxes in the first place. But I'm sure people in Maplewood are more reasonable than that. ;-)
PS Joan: I realize you are brainstorming and "sketching," but I would be concerned about how to collect taxes fairly from people using their single family residences for business or rental in a town like Maplewood. Does the woman who bakes wedding cakes out of her kitchen get taxed? The family whose niece from Denver rents the attic until she can get established in her new job in New York? The novelist get taxed for his/her home office as same as the computer consultant or wedding planner or wills attorney? What about the whiz kid trading stocks in the basement?
In response overall to this thread, I still tend to think that if the costs of paying for schools could be shifted to a progressive income tax, people would be less aggravated about their property taxes paying for municipal services. I think what's really aggravated many people in Maplewood is the fact that taxes on their house are tied to fair market value, over which they have no control, and that some parts of town appreciated in value faster than others. In California, this situation created the modern tax revolt of Prop 13 (and taxes there are no longer tied to fair market value).
A Constitutional convention focused on our taxes and offering citizens the chance to vote directly for reforms strikes me as a promising idea -- since we know that New Jersey politicians, as they ascend in power, tend to become beholden to major real estate developers whose interests I think are very different from that of ordinary taxpayers in communities like Maplewood. But I suspect that the forces against tax reform must be very powerful. Somebody is benefiting from the system we've got and is paying good (and bad) money to keep it in place.
kathleen |
Joancrystal
| | Posted on Sunday, March 25, 2001 - 11:49 am: | |
Kathleen:
Thanks for the great questions. Please keep them coming.
Let's start with the person who is running an incorporated business out of their home rather than having a store front or a separate office somewhere in town. This person could be a skilled trades person, management consultant, have a medical practice - whatever. If this person were to be working out of an office or store front instead of their home, they would be paying commercial real property taxes (directly through ownership or indirectly through rent). Those taxes should be added into the overall ratable equation, possibly at a rate equivalent to what they would be paying for real property tax in rent of a comparable commercial space.
I wouldn't charge my niece rent if she needed a place to stay though I might expect her to chip in with the household chores. If you are charging your "niece" rent then you are operating a multi-unit dwelling for the length of time that your "niece" is staying with you and you should be taxed at the multifamily rate. Since I am not proposing a head tax, if a friend, relative, or perfect stranger comes to visit and takes up residence with you for 30 years, no additional tax should be charged if the visitor is not paying rent.
The woman baking cakes in her kitchen for the bake sale which will raise money for a new church roof and the hot shot gambler in the basement whose day trading is more of an addiction that a means of income should not be taxed for those activities.
The self employed artist/writer and the person who uses part of the home for a home office part of the time would have to be examined on a case by case basis. Federal income tax laws provide guidance in determining when a home office is subject to tax consideration. Those guidelines might be a place to start. |
Joancrystal
| | Posted on Sunday, March 25, 2001 - 12:04 pm: | |
Kathleen:
I just skimmed that link on the Scottish Council Tax. It does share a lot of the concepts I was proposing. Do you have any feed back on how well it actually works?
This is a very good illustration of what I mean by bandwidths (for those who have trouble understanding the concept) but I am not sure yet whether I would favor fixed bandwidths, such as in the Scottish example, or relative bandwidths: (+/-) x amount of dollars of assessed valuation applied to each individual property. The Scottish approach would be far easier to administer but would tend to disadvantage some people on the cusps of the bandwidths. The relative approach would be far more difficult to administer (unless, unlike me, you actually knew how to write computer formulas for EXCEL) and far more time consuming but it would be fairer to those who would otherwise fall at the extreme ends of a fixed bandwidth. |
John
| | Posted on Monday, March 26, 2001 - 10:59 am: | |
Kathleen
I'm still out here, but please don't let King Richard II know. Any add'l info on Calif. Prop. 13? I realize that the school charge is not allowable. Just threw it in there as something to point out flaws in the way things are. I think $25 per household using the school system is relatively cheap. I know it can't be done and the schools are supposed to be free. I think my entire proposal is rather simplistic. And that is based on the fact that I really don't know the current tax system. But I don't think my proposal has the poor paying for the rich. It is a simple way to stop a shifting of the tax burden every time there is a revaluation. The base tax is only a small portion and I firmly belive it is fair. Though I'd be perfectly willing to admit by simply fixing the rate per sq. footage you do not need a base tax. Also, I feel bad for those getting hit with a big increase this time. But, my true fear is that when this is done in a down market, and the values of the larger and more expensive homes decrease at a greater rate than the smaller less expensive homes, the people getting hit with large increases really will not be able to afford the increase in taxes. The best that this thread can do is to promote a discussion and bring out a different views on the issue. The worst that could have happened would have been for all to read and say. That is a horrible idea and no further discussion. The next worse thing, by the way, would have been for all to say "that's a brilliant idea" and no further discussion. I think some good ideas are coming out. And I hope they keep coming. Now if Vic is the current day equivalent of K.R.II... Please believe me Vic when I say I'm one of the peasants. And if the pressure gets too great please come on this board and tear my proposal to shreds!!! But my neck is sore enough already. |
Townie
| | Posted on Wednesday, March 28, 2001 - 11:06 pm: | |
Joan and John,
If I can find some useful links on how the UK is doing with its taxes and the latest thinking on Prop 13, I'll put them here. It may take a few days.
Also, Joan, I'm still not wholly persuaded that the revenue gained from taxing how people use their homes would be worth the grief. Funny, I might think taking money from my fictitious niece in lieu of chores was better for my niece, depending on what kind of person my niece was, etc. but mostly what I fear such a system would produce is tax cheats. Surely my mother would give me some money if she ultimately came to live with me in her dotage (sparing her pride would make me take it). Do I report her contribution and get charged a tax rate comprable to two-family, income producing dwelling?
More thoughts when I have more time.
kathleen |
Townie
| | Posted on Wednesday, March 28, 2001 - 11:11 pm: | |
John,
I just found this about Prop 13:
http://www.caltax.org/research/prop13/PROP13.htm
I haven't read it, but it looks like hardcore stuff for those fascinated by taxation!
kathleen |
Joancrystal
| | Posted on Thursday, March 29, 2001 - 5:34 pm: | |
Kathleen:
One of the reasons that I have resisted submitting this proposal to the TC, as some on this board have urged, is that I have no idea how several aspects of this proposal could be enforced without encouraging overtax-crazed citizens to spy on their neighbors and "turn them into the authorities" in hopes that their (the spies) taxes would go down. We have enough division and ill feeling in town over real property taxation as it is.
The two parts of the proposal which bother me most are the home use proposal which you are grappling with here and the code enforcement proposal. Neither comes with a means of thwarting "tax cheats".
At least in the case of "home use", we have some guidelines to consider. Incorporated Businesses which list the owner's home as the corporation's official address should be taxed under this proposal. So should business spaces which are declared on federal tax returns. There may be no practical way of identifying other commercial uses. Similarly, cash transactions for rent which is unreported to any oversight body and not reported on tax forms may be impossible to identify. Those that can be identified should be taxed.
Another draw back is that I don't know if the township authorities would be able to access federal tax forms to get the needed information to enforce this.
If a building permit is issued for a major capital improvement then obviously the township would have a record which could trigger a reassessment but do it yourselfers frequently don't apply for such permits and some projects which can impact on home value don't need a building permit. Maybe we could require that a copy of the engineer's report at time of resale be submitted to the Assessors Office and the findings compared with items on the property's record card. |
Townie
| | Posted on Thursday, March 29, 2001 - 8:04 pm: | |
Joan,
Part of it in my mind hinges on how much would we get out of taxing home businesses? Any idea? And I surely would want to avoid the situation where the modest small home business gets taxed but the very lucrative one doesn't just because of the way people file or pay their other taxes.
Even apart from tax spies, there is some downside I think to creating situations where people are tempted to become tax cheats because it just seems ridiculous to report your home business. I don't think it's quite the end of civilization or our moral fiber here in Maplewood, but unless the revenues really would make a difference in our lives (and with so many people working from home, maybe it would), and clearly outweighed the costs of administration and enforcement, I'd be inclined to look elsewhere for improving revenue.
k. |
Joancrystal
| | Posted on Friday, March 30, 2001 - 5:38 pm: | |
Kathleen:
From your posts on this thread, I conclude that you and I really aren't so far apart in our thinking. We both want to find a better, fairer way of dealing with the real property tax reality in Maplewood.
The primary assumption here is that Maplewood is being asked by the State to assume a far greater financial load than we have the capacity to handle, given the financial circumstances of at least some of our citizens. This in turn is forcing people from their homes.
If our collective tax burden were more equitable compared with the tax burden faced by residential property owners in other parts of the State, we wouldn't be looking to alternative means of raising the funds we need.
The second assumption is that we have a very small commercial/industrial base in Maplewood. This shifts an unacceptably high proportion of property tax obligation to the homeowners. Because the town is fully developed (except for the untouchable land in the reserve) and becase that portion of the town zoned for commercial use is fully utilized, we have to look either for a means replacing existing businesses with businesses which will generate greater real property tax income for the township or look to the untaxed businesses in town which are operating out of people's homes.
I have no idea home many such businesses there are in Maplewood, what kind of income they generate, or what proportion of the structure they occupy. When I considered this model, I was thinking of a business which operated for several years out of north wing of house on Prospect Street between Oakview and the Crescent. That "wing" was as big as my entire house and had a separate entrance (previously a doctor's office). The Fed Ex trucks would stop there several times a day with truck loads of packages.
I would not want to see us tax any home businesses unless we could first develop a data base which addressed what these businesses were, where they were located, what municipal services they used, and how much actual income they generated.
I know you have given a lot of thought to this issue without proposing any plan of your own. What do you think the Town should do? |
Nakaille
| | Posted on Friday, March 30, 2001 - 5:51 pm: | |
Joan, sorry to be dense but I've been trying to figure this out for a while. In your previous post you wrote: "we have to look either for a means replacing existing businesses with businesses which will generate greater real property tax income for the township or..." How does this work? If a business generates more income, it pays higher real estate taxes? So it's not a question of the condition of the business property as it at least partly is for residences? It's how much income is generated in the space? So it's actually an income tax on the business?
Thanks for your help.
Bacata |
Mtierney
| | Posted on Friday, March 30, 2001 - 6:10 pm: | |
Actually, the town only recently recognized that in this computer age it was almost impossible to control home offices. Historically, the town only recognized medical professions. The town has broaden home office use, but still, of course, has restrictions as to advertising, parking, noise, etc.
I can't see the town going back and acting as a big brother to see what's going on inside our homes by looking over our shoulders as we sit at our computers.
Can writers afford to be taxed more?
I'm sure there are many cottage industries which would go under with additional taxes.
Many have finally achieved the ability to work at home part of the work week so that they can spend more time with young children, etc.
Restricting people abilities to earn money or pursue a career dream from their homes would be the final straw for Maplewood. Some of us might have to work from their homes just to pay our new taxes!
If a business generated a major traffic problem, ie FedEx trucks, that should be checked out.
Leave the rest of us toiling in our attics alone! |
Joancrystal
| | Posted on Friday, March 30, 2001 - 7:55 pm: | |
Bacata:
THIS could work two ways. Either the real property tax on commercial property could be based on the same criteria as is presently used for residential property, in which case new businesses would have to improve the physical condition of the structure(s) they occupy to increase the tax base or the value of the commercial property would be based on the profits made by the business.
Multi-family apartment buildings for example are traditionally taxed based on a proportion of their total rental income. This is just one of the reasons why rent control has come under attack on another thread.
Mtierney:
Neither I nor my husband work out of our home, though I understand that a dental practice once operated out of our first floor. Maybe that's why I didn't realize what a sore nerve I would hit in proposing multi-usage as a real property tax factor.
What I did not envision was having this be a major portion of the overall real property valuation.
First of all, unless the entire residence is being used for commercial purposes, any site factor for commercial usage should not be applied to the entire property. At most it should be applied only to the portion of the home which is being used for this purpose. If that space applies to a home office in a small bedroom (10x10) in a house which has 2,500 square feet of livable space, then only 100 square feet would be subject to this tax (similar to the way IRS treats home offices). 2,400 square feet would free of the tax. The total impact on overall taxes would likely be no greater than that on TomR's proposed garage, if he chooses to build one.
Let me repeat though that this is simply a suggestion. I would be interested in any other ideas for increasing the town's tax base if we don't et some relief as a result of the proposed state taxation convention. |
Townie
| | Posted on Friday, March 30, 2001 - 10:24 pm: | |
Joan,
I'm really flattered you think I've been thoughtful about this. It's all I can do to keep up with your posts! One of the things this reval has done is made me wonder why I got to be as old as I am without understanding taxation. My house in Maplewood is the first house I've ever owned, so the reval has been a total learning experience from scratch. Now I think every kid should not be allowed to graduate without understanding the fundamentals of taxation, life's only other certainty.
My biggest hopes for seeing the present situation change have been twofold: that property values in other areas of town would increase more rapidly while mine ascended more slowly and that we shift school funding to a progressive income tax -- whereby I might pay more, Steve Forbes and John Corzine would most certainly pay more, and surely the entire State of New Jersey would be better off with less sprawl and renovation of the cities.
If tomorrow I was made Maximum Leader of Maplewood and told to make a difference, my first blush idea would be to invest in another jitney (or two) to provide absolute convenience to the train from the areas of Maplewood that have thus far not benefited from the train. I don't know how much that would cost each of us in taxes (not very much I would think), but I'm guessing we would get a boost in property values in the lower valued areas, but maybe I'm just dreaming.
I'd also try to lure artists into live/work arrangements along Springfield Ave to create a SoHo effect, maybe even using modest tax incentives. Again, maybe I'm dreaming.
So all my ideas tend to go in the direction of spending a little money now to generate new revenue sources for the future, not looking to take more from what's here. But I'm quite a newbie in this field, and I'm sure there would be resistance to taxing people even a dime more per day.
There are folks, I'm sure you know, who earn a living studying taxation and human behavior -- who can actually answer the questions: What happens if you start taxing home businesses? Will people still want to move here? Will they begin to cheat? I think Mtierney's reaction will be a common one, especially when you consider how many parents in town have arranged their lives so they can work at home part or all of the week.
On the other hand, if it could be demonstrated that by taxing home workers it would mean most people in Maplewood would see their taxes go down significantly, and it didn't cost much to administer, it might be popular, even with home workers, who presumably would get to deduct those taxes as well from their income tax. Also, it may be that other town begin to move in this direction, and people will begin to see it's an idea whose time has come.
I understand you are brainstorming here and looking for responses. I think the internet is a great place to consider everything, remembering that the Internet responses you get are just a tiny fraction of thinking in this town.
kathleen |
Mtierney
| | Posted on Saturday, March 31, 2001 - 11:55 am: | |
Just a thought: If the town cannot identify and/or control illegal multi-family conversions, how could it possibly do so for home office use?
It's been obvious that the town cannot keep up with building inspections, etc.
I believe that only a few of the home businesses would be identified and all the rest would be operating without paying. There would be a lot of anger about those being slapped with additional taxes while others go without penalty.
We would create a new split in town. The legal and illegal homeworkers. Neighbors can be enlisted to spy on each other.
Unless folks volunteered to make their home operations known and pay higher taxes, what kind and how many tax police would the town have to employ?
I don't think Maplewood can put Pandora back in the box. There are many zoning regulations which can prevent onerous businesses from springing up all over our residential areas. |
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