Today, the Dayton Daily News “investigative team” let you know the bad news: dropping property values means you will need to pay more taxes to support the schools and public services funded by property taxes. This is how the Republicans in Congress can claim “no new taxes” from them- they pass the pain to local school boards, libraries, parks and public services.
Here’s how it happened: the banks screwed up and had to be bailed out by you, The American Taxpayer. They gambled and lost on their funny money financial paper that they started creating like crazy after they were deregulated and we tossed Glass-Steagall onto the floor and stomped on it like a crystal glass at an Orthodox Jewish Wedding (don’t ask me why they do that).
Now that your property values dropped from 10 to 40%, without anything you could do about it (if a drug dealer moves in- you can fight it, if the bank forecloses and lets the house next door turn into a vandalized dump- there is little you can do) the taxes that fund local services based on property values- are bringing in less money- so now, schools, parks, libraries and public services are facing huge funding cuts or having to ask you to raise your taxes again. Not only that, cities are seeing less come in overall, as houses go from assets to liabilities that require additional maintenance- and demolition.
From the Dayton Daily News:
Ohio House Bill 920, passed in 1976, created a system where each voter-approved levy would raise a predetermined amount every year. For example, Dayton Metro Library officials were confident their 1.75-mill permanent levy passed in November 2009 would always raise $13.6 million in taxes per year, based on estimates from the Montgomery County auditor.
The purpose of the law was to protect the taxpayer. It prevented schools, libraries and governments from automatically collecting more taxes on each levy when an individual’s property value rose.
At the time the law was written, and in the 30 years since, most cities and townships were growing, and property values were rising, so there was an always-increasing tax base to pay the amount each levy required.
But Montgomery County Auditor Karl Keith says lawmakers didn’t anticipate a scenario like the past three years, when existing home values dropped, and there was little new construction to make up the difference. Today, most local communities have a smaller property value base than they did in 2009.
In the library’s case, the 2009 levy’s tax rate legally can’t go above 1.75 mills. But the county tax base has fallen enough — from $28 billion to $26 billion — that 1.75 mills of tax can’t produce $13.6 million anymore. The levy only raises $12.5 million….
State Sen. Peggy Lehner, R-Kettering, was surprised to hear of the “capped levy” impact Friday.
“Obviously, it’s a very serious unintended consequence of legislation written years ago that has never been tested in this fiscal environment. I think the legislature needs to take a close look at this,” Lehner said.
Lehner specifically pointed to the Montgomery County human services levy losing $8.75 million as a crucial issue.
“That money has to come from someplace, because those are critical human services,” she said. “But if the choice is asking taxpayers for a new levy, or fixing a problem with the law on the old levy, I’d rather fix the old levy.”
This is why the bailout failed. The banks are still in business, paying their failed executives huge paychecks as they continue to squeeze the small banks that have managed to weather the storm, while our neighborhoods and local public services suffer.
Instead of bailing out the banks, had we put some controls back on banking, and forced mortgage resets and principle reductions on homes at risk, the bottom wouldn’t be falling out now. Having the sheriff do collections for the banks- without holding them responsible for the upkeep and maintenance of their newly stolen properties has wreaked havoc on our meager personal wealth. Homes have traditionally been where most Americans store their wealth and have always been able to count on real estate to at least hold its value over time.
Not that any of the people we’ve elected to Congress would understand. Most of them don’t have a mortgage. Mike Turner certainly doesn’t (or didn’t last time I checked). It’s this kind of disconnect that’s destroying the fabric of our community.
Raising local taxes to make up for the mistakes of the billionaires who have profited wildly and are still playing fast and loose with the financial stability of our country is criminal.
In the past, the only way your neighborhood would lose value was because drug dealers moved in, or people lost faith in their neighborhoods value and let it deteriorate. Now- it’s no longer within your control. A few neighbors lose their jobs, or gas prices go to $4 a gallon and they get behind on their mortgage and next thing you know- you’ve got a shell of a home next door instead of neighbors. It’s why I made the first video of my campaign about the foreclosure crisis. It’s why it’s even more important that we look to prosecuting the criminals on Wall Street and re-regulating the banking industry.
How many times are the American people going to be asked to pay for the mistakes of the Wizards of Wall Street?
In the next election- it’s time to send new representatives to Congress to stop this madness. I plan on being your voice OH-10. Please consider a small donation to help me fight for you.