Monday, February 8, 2010

Sneaky Tax Hikes

Our city is in the process of constructing a new and very large city hall. The old one was not that old, and it is certainly still in good condition. But someone wanted a larger and newer one built right next to the old one. In a recession, government, even at the local level, does not feel the need to modify their spending. Hmmm, but now how to pay for it? Tax increases in a recession for an unnecessary new city building wouldn't have garnered enough support. So they found a way to raise taxes unofficially in a way that most wouldn't notice. They kept appraised property values artificially high and thus issued a sneaky property tax increase.

Our houses here in our city were reappraised a few years ago at the height of the real estate bubble right before it popped. We saw a dramatic increase in our property taxes at this time. Although I don't agree with the property tax in principle, I couldn't protest that tax hike at that time. However, the very next year when the real estate bubble popped, property values were down and five properties on my street couldn't sell with some of them ending up later in foreclosure. At that point the increase in property taxes needed to be addressed. Well, the kind-hearted city knew this and decided to lower property values. But they still wanted a new city hall, so they dropped my property value by only 5%.

Some of my neighbors were aware that their property was still being over-valued, but they didn't know what to do, or the dispute process seemed too complicated, so they let it go. I, however, have experience working as a commercial real estate appraiser, so I knew exactly how wrong the city was and what to do about it. The process was lengthy and cumbersome, but now 3 months after my 2009 property taxes have been paid, I have won my fight against the city. In the face of overwhelming evidence, they agreed to lower my property value by an additional 10% which will save me hundreds of dollars each year over the next several years. This is by no means a small amount.

My distaste for government at the local level has increased through this process. As someone with real estate appraisal background, I knew the city had not even performed an appraisal to determine our property value. Their methods of arriving at property values and their evidence used was flawed and would never hold up in court. And yet the process to rectify this debacle involved me doing lots of legwork, the city denying my petition without even looking at my evidence, and ending up with it finally being resolved only after a court hearing. (I didn't sue; it was more of an arbitration.)

I am now more determined than ever that government must be limited. Given any kind of power, even local governments will manipulate and take advantage of the populace as needed for what they want. I stand firm, as written about in an earlier post, that I will never vote for a tax increase no matter what it is. Government is too inefficient and makes too many bad decisions without caring about what is in my best interest for me to voluntarily give them any more money to squander.

2 comments:

  1. thats awesome you did all that. I hate being taken advantage of - even if its something little. I haven't personally had a run-in with government yet though

    ReplyDelete
  2. I'm glad you took matters into your own hands! Why don't we all do that?!

    ReplyDelete