| Author |
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John
| | Posted on Thursday, March 8, 2001 - 6:03 pm: |     |
I think it does. I have ideas and suggestions. Does any one else?
1- Start with a base tax on each property. This covers only a percentage of the tax base.
2- An even rate per sq. footage of land across each town.
3- An even rate per sq. footage of improvements.
4- Add to that an increase for each bathroom and kitchen.
5- Deduct for busy street (calculated by number of cars that use the street).
6- Deduct for usage of property for Traffic signs, Telephone poles·
There is more to my idea but I'll post it tomorrow. |
Octofoil
| | Posted on Thursday, March 8, 2001 - 6:25 pm: | |
John,
The system could definitely use a change! The property tax theory is archaic, dating to ancient times. It is simply not suitable for modern, dynamic economies in which values can and do change rapidly and capital and labor are highly mobile.
Here in M'wood, all too often we seem to take two steps back for every single step forward. Rent control, for cryin' out loud! Where in the world did that come from?
Keep the ideas coming! |
Joancrystal
| | Posted on Thursday, March 8, 2001 - 7:14 pm: | |
Before drafting a better real property assessment methodology we need to resolve a few questions.
1. Who should pay real property taxes?
A. At the moment, there are a number of properties in town which are assessed at a high property value (such as a house two doors down from me with an assessment of over $500,000) which are tax exempt for various reasons. Should all of these properties remain fully tax exempt? Should more of them make regular payments for services to the town in lieu of taxes? Should these payment rates be set by formula using criteria similar to those applied to residential and commercial property which is taxed?
B. Instead of charging real property tax to the property owner only, should there be a head tax formula built in since larger households are apt to use more services than smaller households?
C. Should there be further adjustments based on demographics of household members such as age, veteran's status, income level, etc.? These adjustments already exist to varying degrees. Should one or more of them be eliminated? Should others be added?
2. How should the taxes be computed?
A. Should all properties in town be assessed based on the same rate for the same criteria (John seems to be advocating this)? This would mean treating each home in town as if it were in the same neighborhood but still recognizing individual differences which can affect market values such as construction materials, living space, lot size in relation to house size, depreciation, home improvements requiring a building permit, presence and nature of building violations, presence of rental room or unit, etc.
B. Should we similarly apply the same formulas to commercial property whether it is on Maplewood Avenue, Springfield Avenue, Valley Street, or elsewhere?
C. Should people who work out of their homes pay an additional tax because part of their residential property is being used for commercial purposes?
3. What should real property taxes fund? How should services presently funded by real property taxes be financed (assuming they are still necessary and/or desireable) if not through real property taxes?
We also need to take a look at the impact that any major changes to the methods of real property taxes selected would have on the town's business people and residents. TC claims to have been caught unawares by reval. We wouldn't want to make the same mistake if an alternate proposal were to gain favor.
Finally, we should take a fresh look at ratables. What can be done to increase the town tax base? Can these changes be implemented given the present political climate and without distroying the quality of life which led us to chose Maplewood in the first place.
Let's get some ideas flowing here! |
Dytunck
| | Posted on Thursday, March 8, 2001 - 10:45 pm: | |
Don't stop me now, I'm on a roll.
You want ideas?
Let's change the laws (not just the parking statutes) and start collecting taxes from the Tax exempts, such as churches and charities. The town is foregoing revenue opportunities by granting exemptions to churches. The churches have real property on streets that need to be plowed and paved. They still have leaf collections and boy do they have police support. They should pay something for these services. Sure they have their expenses, but the congregation can give more out of their lessened tax burdens.
Seton Hall University. What a drain on the tax-payers of South Orange. There is a voluntary donation to the town that amounts to the tax revenues of a calzone shop, a five and dime and maybe a couple cheap liquor stores. This is a huge burden on our neighbors. And that means it's a huge burden to us because we share the same school system. If where SHU is was say, a shopping mall (I am not saying that it should be, but if it was) the tax revenues would be much greater for SO, and the school budget would be lessened for Maplewood. Tax these institutions their fair share. Seton Hall takes in more from the Big East Tournament than they pay to the Township of South Orange Village in a year.
I am too tired to continue. Tawk amongst yourselves. |
Gerardryan
| | Posted on Thursday, March 8, 2001 - 10:49 pm: | |
A few thoughts on this. Back in the day when everyone was on a farm, a property tax WAS an income tax; the larger your property, the larger your harvest, and thus the larger your income. Those days are gone! An income tax seems to be a much fairer mechanism to fund things. (I know, I know, soak the rich... but I think I'm right on this point).
It seems to me that some set of services that you get/need by virtue of owning property ought to be paid by a property tax. Most municipal services (police, fire, roads, etc.) seem to me to fall under this. Not all, though: maybe you could argue that things like health and public assistance ought to come from a different funding pot because some larger good is served/larger need is being met?
It also seems to me that schools ought to come mostly from the state since they exist as part of the state constitution (thorough and efficient...). Maybe there ought to be a per-student funding amount from the state, the "minimum T&E" number, and additional services above that come from a local decision and thus a local property tax?
How much "local control" and "home rule" would we be willing to give up to achieve such a shift. Would we have to give up any?
I would guess that if the property tax was, say, a third to a half of what it is right now, we would not care as much about the methodology associated with its calculation.
NJ expects to collect $8.31 Billion in income tax in 2001. Roughly $7B is collected statewide for school property taxes.
What would income tax tables look like if we needed to collect $11-$12B instead of $8.31B? |
Mck
| | Posted on Friday, March 9, 2001 - 6:52 am: | |
Jerry: Don't ask me, I'm a dope with numbers. But I have another question, and beef. NJ Transit! And those disgusting buses on Boyden Ave! Are we getting our fair share from them, and the hundreds of employees who use our streets every day? What about PSE&G? Is there any way to tax all their employees who live out of town? Sounds draconian, but so is our property tax. If the state won't help us pay for our schools, then they ought to make it possible for us to be more creative about raising money. Why can't the great Ron Rice do something about that? And I couldn't agree more with Dytunck: go after Seton Hall! |
Willfalaise1
| | Posted on Friday, March 9, 2001 - 12:44 pm: | |
Just as there was a time when property represented income, there was also a time when property represented wealth. When an "estate" physically was an estate. Now wealth is held in intangible property like stocks, bonds, and other paper. Jerry, or anyone else, what do you think about taxing this intangible property to ease the taxes paid on our homes? This way the difference wouldn't have to all come from income taxes.
John, I'm against your plan. It makes a regressive property tax even more so. |
Konigen
| | Posted on Friday, March 9, 2001 - 1:39 pm: | |
Willfalaise1,
The day that Maplewood starts up it's own little capital gains tax is the day after I put my house on the market and go as far away from NJ as I can. We should be receiving MORE funding from THE STATE and FEDERAL governments, or, reducing property tax by reforming the state income tax. The amount of property taxes that we pay here is, in a word, ludicrous. Taxing people on "intangible assets" is not a solution. If it were, then Maplewood would have to be prepared to pay out for "capital loss" in a down market as well, just like the federal gov't does.
Konigen |
Tracks
| | Posted on Friday, March 9, 2001 - 2:31 pm: | |
I agree with Dytunck... we should do away with tax-exemptions for churches, temples, charities and private universities, etc. It would be one thing if the state shared in these, but it puts an unfair burden on the towns that have a large number of tax-exampt properties.
If Seton Hall switched locations with the Short hills mall, the taxes in S. Orange would be nearly nothing.... and we would have the better schools... certainly not a fair system.
Some one should explain this to Ron Rice. |
John
| | Posted on Friday, March 9, 2001 - 2:34 pm: | |
Willfalaise1,
Thank you for looking at my proposal. Though it is not complete yet. I'll try to do that over the next few days or weeks. Things that need to be considered have been posted already. Of which I think the most compelling to us is to receive funding for our schools on a number of students attending (for lack of a better description) basis directly from the state. I also accept your rejection of the proposal and would hope many others will look at it and express what they truly feel as well.
I'd just like to point out two things.
1- If by regressive you mean -"decreasing in rate as the base increases" - and are referring to the assessed value of the property, then here is my explanation. I've been saying all along that part of the problem with the current tax system is that we all use the same services and should pay for our fair share of those services no matter what the value of our homes is; thus, the base portion of the tax. Then, the remaining portion of taxes, increase as the base in property size and amenities increase. So it is not totally a regressive plan.
2- This is only an idea and I'd like people to add to, or question, parts or all of it. Put forward other ideas. Mr. Ryan is obviously reading it as well. And he is in a position to do something about what the citizens of this community believe is necessary.
My desire is to get people to think about what needs to change and how to change it. And honestly, I think the current system discourages people from improving their properties and, therefore, the community in general. I really don't have much time today, but I'll try to get back to completing my idea soon. In the mean time the posts that I've seem make me realize that there is more to discuss. |
Willfalaise1
| | Posted on Friday, March 9, 2001 - 2:35 pm: | |
You're right, a mini-Maplewood capital gains tax is ludicrous...that's not what I'm talking about. I think we all want more money from the state, but as Jerry pointed out it would probably be extremely difficult to raise income taxes enough to cover cutting our property taxes in half. The tax on intangible assets idea is part of the FIRST proposal from New Jersey Policy Perspective. It would be a 0.25% tax on intangible assets, but would only apply to people who hold $2 million or more of these assets, or 1% of the population of NJ. They also propose an increase in income taxes. All of this money would be collected by the state and then returned to people in a rebate program like NJ Saver but with more funds. Eventually it could be altered so that money went directly to schools and property taxes could be reduced. |
Bobk
| | Posted on Friday, March 9, 2001 - 2:58 pm: | |
New Jersey will fund schools through state tax sources about the time my pet pig gets his pilots license. Sorry folks, that ain't New Jersey. I know the State Supreme Court has been trying to address this issue, but with very little success and with the changes on the court the last couple of years, well.... again my pet pig and his flying lessons.
And, it might not be all bad not to have the state in local school funding.. Recently Alabama, which funds schools at least partially via state aid, cut back on the funding. Doing away with AP classes was OK, but when the Superintendent in Mobile announced he was cutting out inter scholastic athletics ....what a brewhaw.
Also, since Maplewood/South Orange are not among the poorer communities in the state we would probably end up sending more money to Trenton than we would get back. |
Konigen
| | Posted on Friday, March 9, 2001 - 3:01 pm: | |
Willfalaise1,
Wow, I didn't know this is something that NJ was considering. I don't understand how they could tax assets that were "intangible". They aren't really even assets until they're sold and then sometimes they're liabilities. How could the state justify taking the gain without providing for the loss? Would it be a yearly tax? Does any other state do this? Geez, I'm not in the affected category, but I sure feel like I already pay enough in capital gains taxes to the feds...
When you say that "the difference wouldn't have to come from income tax" what do you mean? Wouldn't taxes on intangible assets would be just another aspect of income tax? |
Njjoseph
| | Posted on Friday, March 9, 2001 - 3:04 pm: | |
Konigen -- I agree, and what paperwork nightmares it would create! |
Willfalaise1
| | Posted on Friday, March 9, 2001 - 4:16 pm: | |
Florida currently does this. It's a yearly tax based on the current market value of assets such as stocks and bonds as of Jan 1. They have a much lower cutoff, only the first $20,000 in assets is exempt from the tax (as well as money in 401Ks, IRAs, etc.), but they tax at a lower rate, 0.1%.
The state is not currently considering this as far as I know. As Townie pointed out in another thread it would certainly face a lot of political opposition. It's a proposal written by NJ Policy Perspective, sort of a think tank that has done studies on how damaging the current tax structure is to the state. |
Konigen
| | Posted on Friday, March 9, 2001 - 4:47 pm: | |
I just still don't understand why it's legal in FL and not considered "double taxation". are people crazy in FL??? First the election and now this???
First of all, like I stated before, the only thing that could be considered an "asset" is the principal, upon which one has already paid income tax. Anything else that isn't sold, whether loss or gain doesn't really exist. It's simply points until it's sold, and only then does it become dollars.
Another thing -- we already declare our losses and gains on our state income tax, and are therefore taxed on them by the state as well as the federal. Why should we be taxed yet again?
It seems really wrong to me, at this point, but perhaps I'm not understanding something... |
Mtierney
| | Posted on Friday, March 9, 2001 - 4:55 pm: | |
Alabama ran into trouble because sales tax funded schools as I recall hearing.
When the economy drops, people stop buying... |
Willfalaise1
| | Posted on Friday, March 9, 2001 - 5:17 pm: | |
A stock is an asset just like a home is an asset, whether or not you sell it. If you own stocks in IBM that are worth $3 million as of Jan 1, this is what you pay the taxes on. This is not about capital gains or losses, it's about current market value as of a certain date. It's the same as property tax, you pay taxes on what your home is worth as of October 1. (you just don't need CVI to tell you what stocks are worth!)
I have my doubts about the proposal too, especially it's political viability. But I like the idea mainly because I've seen no other reasonable alternative. We want more money from the state, and it's got to come from somewhere. So we raise income taxes, or what??? Do you think raising income taxes enough to cover half the cost of running our schools is politically feasible either? I doubt it.
The problem I have with John's plan is that he's (so far) offering no way of easing the total amount of taxes the town needs to collect, he's simply proposing a shift in who pays these taxes. A home in the Hilton section would be taxed the same as an identical home within walking distance of the train, even though the market value of the two homes is vastly different. Because people with higher incomes tend (not always just tend) to live in higher value homes, the system John proposes would hit lower income people harder. This is what regressive means btw.
Taxing intangible assets as well as homes is a way of returning property taxes to what they were originally intended to be, taxes on wealth. |
Joancrystal
| | Posted on Friday, March 9, 2001 - 7:00 pm: | |
Can municipalities hold lotteries? If Maplewood had a pick 6 or the equivalent even once a month, how many of you would buy tickets? Think of what we could fund with the proceeds.
Dave: would this be an acceptable question for the VOTE? |
Gerardryan
| | Posted on Friday, March 9, 2001 - 10:25 pm: | |
Mck (and others): the whole exempt-property issue (be it transit, schools, churches, etc) is a can of worms that might be too difficult to open up. It is an indirect shifting of the costs to taxpayers who may or may not be able to pay them. Any church I have ever belonged to has not had an enormous amount of ready cash lying about... :-)
Willfalaise: for lots of reasons I would be against taxing the value of assets like stocks in the way you propose. It's much too volatile from year to year. What was my Lucent stock worth 1/1/2000 versus 1/1/2001? (ow, that hurt!), and how can a municipality make revenue plans and projections based on a revenue stream that's that volatile from year to year?
Joancrystal: towns can't do lotteries. In any case I don't like funding things with lotteries, gambling casinos, etc. Nothing against gambling, you understand. I just think that if we believe something's important then we should pay for it with real public policy decisions, not games of chance... particularly games that I believe turn into an unofficial tax on more lower-income folks (or on folks that believe that you actually have a chance to win!).
As for Bobk's pig and his pilot's license: let's all remember that the name of the last governor that raised income taxes in this state is still riding around on a lot of bumpers. Let's also remember that he was right.
It would be interesting if we could know how many people are in what income brackets, and/or what the distribution of incomes is in NJ. I wonder what the net effect on income tax collection would be if the top marginal rate was kicked up a half point.
I know that doubling my income tax and halving my property tax for 2001 would come out as a net loss for me today, but it won't if I were to change or lose my job, or retire. I think a higher income tax would be much more fair in the long haul.
How much of the high cost of schools is the administrative overhead of the many separate school districts in this state? How much of that would we be willing to surrender? |
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