Tag Archive for 'property-tax'

The Great Tax Plan Targets Education!

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Wilson
on January 17, 2008
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If you don’t know about Glenn Richardson’s plan to eliminate ad valorem taxes in Georgia, you must be dead–just like his Great Plan. Speaker Richardson supposedly toured the state telling everyone about his proposal to do away with property taxes, but he only told people bits and pieces and would entertain no public discussion. The city and county governments jumped on him. Casey Cagle and most everyone else in the Georgia Senate expressed grave concern about such a proposal and essentially said it would not pass the Senate. For whatever reason, his plan has now morphed into a plan to eliminate the school tax portion of the property tax.

My question: Why schools? Why education? If it won’t work for city and county governments, what makes it good for schools? In this interview Jeff Hubbard, President of the Georgia Association of Educators (GAE), explains what this proposal means for education.

There are a lot of problems with this misconceived plan to take away local control of the education budget, but regardless of the shear power grab by the legislature, I don’t understand why we would want the quality of our education to depend on how much money people spend on goods and services, particularly with an economy that may be going downhill. If teachers get paid out of sales tax revenues and the economy goes in the tank, revenues go down and school districts have to scramble from month to month to make ends meet.

If you talk to these guys in charge of our state budget, like the Governor, they just love to tell you that they put more and more money into education every year. That may be true, but as Jeff points out, the fact that we spend more does not mean we are improving the quality of the education our kids receive. Georgia is one of the fastest growing states in the nation and a lot of the increase in education funding is due to this increase in the population of the state. More money does not translate into more money for classroom instruction. There may be more money for more buildings to house more students, but the money to improve the quality of instruction doesn’t increase.

There are about 1.6 million school age kids in Georgia. About half of them qualify for free lunches, which means they are generally from lower income families. About 57% of the state budget goes for education. And yet, we have never fully funded education according to the formulas set up 23 years ago in the Quality Basic Education Act.

Speaker Richardson and anyone who supports his efforts to transfer the cost of funding public education from the property owners (many of them wealthy) to the working families of Georgia (through the sales tax) is not seeking to improve education in this state. They are seeking power. They are manipulating the people of this state by promising the elimination of a significant portion of their property taxes without explaining the dangerous consequences for our struggling, underfunded educational system.

One of these days!

 
 Jeff Hubbard, Georgia Association of Educators [27:14m]: Play Now | Play in Popup | Download (278)

Jason Pye on the Speaker’s Tax Proposal: Going Down in Flames!

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Wilson
on November 18, 2007
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Anyone who keeps up with politics in Georgia, keeps up with JasonPye.com. It’s always a pleasure to talk to Jason and get his take on issues and people.

In this interview, Jason discusses some of the details of Speaker Richardson’s proposal to eliminate the property tax and broaden the sales tax. Jason gives credit to Travis Fain for the details of what goods and services would be taxed under the plan. Jason says there is a need for clarification as to some of the things that will be taxed. For example, the plan would tax temporary lodging over 90 days. Does this refer only to the extended motel or hotel stay, or does it include your apartment rent. For a list of what exemptions will be eliminated, go here.

If the Speaker has his way, we will be paying sales tax on water bills, phone and long distance services, dental services, and haircuts, just to name a few. The state portion of the sales tax we pay is currently 4% and, as I understand it, would remain unchanged.

Of course, one of the most important issues is whether or not enough revenue can be generated from the expansion of the sales tax to make up the revenue lost through the elimination of the property tax. Jason said there was a study by Georgia State University which indicates there would be a significant shortfall. However, the Speaker insists there won’t be a short fall. The question is whether the Speaker’s optimism is merely blind faith or reliable economic analysis.

Jason points out that one of the problems with the Speaker’s plan is the manner in which it is being revealed and promoted. For example, Speaker Richardson has made it apparent that he is not receptive to any criticism of his plan, and generally avoids discussing it in public.

Politically, the unknown consequences of this battle over the Speaker’s tax proposal is the repercussions it will have on Republicans in the ‘08 elections. The elimination of the property tax is a sticky local issue for two reasons: (1) every citizen is likely to jump up and salute the elimination of the property tax, and (2) the local city and county governments oppose its elimination since it is their main source of revenue. There is not, at least as far as Jason and I are aware, any city or county elected officials that support the Speaker’s plan. In fact, Jason said one mayor compared it to the centralized government proposed by Karl Marx. Next year in seeking re-election, Republican representatives are going to have to explain their support for the plan and that could make them vulnerable to significant criticism at home. And if they don’t support the plan, they are subject to criticism as well.

Everyone believes, thinks and assumes that Speaker Richardson controls the House Republicans with an iron rod. Jason thinks he is literally staking his political future on passing this plan. But, when all is said and done, Jason says the plan will go down in flames because it has no chance of passsing the Senate. And maybe that is part of the Speaker’s plan, too! Is this a strategy to build a platform to run for Governor in 2010? Trying to eliminate the property tax may get the vote of a lot of Georgians, regrdless of whether or not it is a bad idea. And what happens if an opponent in the Governor’s race, say one from the Senate or elsewhere, opposed eliminating the property tax?

I was disheatened when our discussion turned to the Atlanta Water Shortage. I thought Jason, smart guy that he is, would jump at my offer to rent my trailer to him when they run out of water in Atlanta. He seems oddly unconcerned, even though I was only charging two grand a week for hot water and 6 baths a day.

Jason says there is no sense of panic, at least not in the county where he lives, Newton. Its reservoir is full. Although no outside water use is allowed, he thinks people, generally, have a degree of blind faith that the problem will get resolved. No one seems to be laying blame for the situation getting this bad–other than whoever caused the drought. On top of that, the Governor is getting favorable approval ratings for the manner in which he is handling the problem.

Jason did say that if the optimism proves unfounded, he is coming to live with me. Fine Jason, but without a paid, advance reservation, the rate goes up!

We ended the interview with a few comments about Ron Paul and the libertarian philosophy. Ron Paul seems to be experiencing a spike in his campaign and support. He is one of those who says what he means and means what he says and to that extent he is refreshing. But then, you ask the next question and find out he thinks the Food and Drug Administration (or a dozen or so other federal agencies) should be eliminated, not reformed, eliminated. Jason seems to think that is a good idea and believes the drug companies and market forces will make sure dangerous drugs don’t stay on the market.

Me? I am not concerned about bad drugs staying on the market. I am concerned about them getting on the market in the first place. Apparently, Jason thinks a few deaths to test a drug out are well worth the costs savings in not having the FDA require proof a drug is safe.

Back to Ron Paul. Jason doesn’t think America is ready to support a strong, independent third party, whether Libertarian or otherwise. Neither do I–right now. But if any man can birth a viable political party, virtually overnight, its George Bush. Rarely, has one man done so much, so wrong, so faithfully.

 
 Jason Pye, Blogger [30:32m]: Play Now | Play in Popup | Download (213)

Water and Property Taxes: Senator Tommie Williams Says…

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Wilson
on November 16, 2007
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I think he gets it.  I hope he gets it!  But only time will tell and it will take the 2008 session of the Georgia legislature to reveal just how Senator Williams and the rest of the Republican leadership are going to deal with the issue of water.   This interview focuses primarily on water, but near the end we discuss Glenn Richardson’s proposal to eliminate the property tax. 

When it comes to Speaker Richardson’s proposal, Tommie makes it clear that while it may pass the House, it will not pass the Senate, at least not in its original form.  I am not sure what that means, but Senator Wiliams is equally emphatic that the 2008 legislature is going to do something about property taxes.  According to Senator Williams, people are upset about their property taxes are going up. 

He points out that people on fixed incomes have to worry about their property taxes increasing to the point they can’t afford to pay them.  I don’t think anyone would argue with the idea that the elderly and people on fixed incomes need some protection, I don’t think this justifies a criticism of the property tax as an effective and fair tool for raising revenue.  There are two basic reasons the taxes of homeowners go up significantly:  (1) correcting years of under-stated property values because assessors did not do their jobs, or (2) the inflated value of real estate in this economy. 

I mentioned to Tommie that Warren Buffett, the billionaire, had recently announced that he paid 18% of his income in taxes and his secretary paid 33% of her income in taxes and had challenged members of Congress to disclose their tax rates.  I then asked Tommie if he thought the shifting of the tax burden from a wealth basis, such as the property tax, to a consumption basis, such as the sales tax, would result in his paying less taxes.  He readily admitted that he had already done the math and that he would pay less tax. 

And that, ladies and gentlemen, is the primary reason behind Glenn Richardson’s efforts to eliminate the property tax: less taxes for the rich, more taxes for consumers.

Water, is not an easy topic to discuss, since it seems that no one wants to talk specifics.  However, in light of Governor Perdue’s recent public confession of sin regarding the way the water problem has been handled, I really wanted to know what sins had been committed that may be affecting the delivery of water from the heavens.   I am still not sure what those sins are, but I still resent having my supply of water affected because of them.

It did not take long to establish that the water plan proposed by the Water Council is not going to receive the legislature’s approval.  The real question is what plan will pass, because some plan has to pass unless they change the law.

Tommie also pointed out that everybody is sick and tired of the hassles that come from too much growth and development in Metro Atlanta.  Too many cars.  Too much traffic.  Too little water.  However, I did not detect any real desire to curb the enthusiasm of developers for more. 

Tommie readily acknowledges that South Georgia is not going to stand for having its water sent to Atlanta.

He doesn’t think that building more reservoirs is a long term solution to the water shortage, mainly because he thinks the EPD and the Endangered Species Act would effectively prevent a reservoir being approved. 

He mentions the possibility of a desalinazation plant to pump water from the coast to Atlanta as a possibile means of providing more water to the Metro Atlanta.  That is certainly a possibility, but the costs is going to be a big issue.  Not only that, will Atlanta pay for it?  Can Atlanta pay for it?

I was surprised when he mentioned the Tennessee River, which he indicates Georgia owns half of.  Hmmm!  Never thought of that, but Tommie indicated that Georgia might claim a right to pump water from the Tennessee River to Metro Atlanta.  Of course, there are all sorts of issues with this, such as the power and control of the Tennessee Valley Authority over the Tennessee River, not to mention building the pipeline to Atlanta.

While these long term possibilities are interesting to discuss, I was more interested in finding out if anyone, including Tommie, had any idea what Atlanta was going to do in 250+ days, if and when the water ran out.  He indicated that the emergency managment agencies were working on that problem and I really did not get any idea what short term options were under consideration, other than, of course, hauling water to and fro.

The only thing that is still certain is that 2008 is going to be interesting, to say the least.

 
 Tommie Willians, Senate Majority Leader [32:13m]: Play Now | Play in Popup | Download (213)

Casey Cagle on Property Tax Reform and the Water Plan

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Wilson
on October 4, 2007
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In this interview earlier today, Lt. Governor Casey Cagle provides his thoughts about the upcoming efforts in the 2008 legislature to eliminate the property tax and develop a water plan. These are important issues and you really need to listen to what he has to say.

My take on it is this: I think the Lt. Gov. has reservations about totally eliminating the property tax as a source of revenue, although I get the feeling he would consider some reform in property taxation. I think he promised me that any significant overhaul of the tax base was not going to be rammed down our throats, but I still don’t trust the Georgia House.

For more on the property tax issue, you need to visit the recent interview with Alan Essig of the Georgia Budget and Policy Institute.

As for water, Casey puts a lot more credibility in the Water Plan proposed by the Water Council/EPD than I do, even though he was quick to note that it will not have the force of a rule or regulation or law. It’s just a plan, man! I get the feeling he is in favor of more reservoirs to provide water for thirsty North Georgia and metro Atlanta, but notes they are expensive. What isn’t? He seems to be against taking water from one part of Georgia and giving it to another, which is a good thing to be against.

I am still concerned about that deadline in the law that gives the legislature only 20 legislative days to come up with an alternative plan if they don’t like the EPD one.

 
 Casey Cagle, Lt. Governor [26:46m]: Play Now | Play in Popup | Download (236)

Alan Essig on the Speaker’s Property Tax Reform Proposal

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on October 2, 2007
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Alan Essig of the Georgia Budget and Policy Institute is my go to guy when I want to try to get to the bottom of something that involves taxes or budgets. In this interveiw Alan comments on Speaker Glenn Richardson’s proposal to eliminate the property tax.

The curious thing is that there is no substance to the proposal, it’s just all talk–at least right now–and that is what bothers me. You would think that when it came to something this important, there would be an effort to give everyone enough time and information to make a reasonable decision. Alan said he would like no less than 3 to 6 months to study any proposal and run the numbers. My bet: he won’t get that much time and neither will anyone else, including those guys we elected to represent us.

Alan says that every state in the union has a property tax. For Georgia to think it can become the first to eliminate it in one fell swoop, seems irresponsible to me. Alan mentions the fact that a few years ago one of those northern states, Michigan, I think, enacted sweeping rollbacks in property taxation and almost went bankrupt when there was a blimp in the economy.

Also, the State levies only a small property tax, like .5 mil. The majority of the property tax is levied and controlled by local cities, counties and school boards. It is where they get their operating budgets, their power. Eliminating property taxes is going to eliminate a lot of local power. Now why would a state legislator, even one serving as Speaker, be in such a hurry to eliminate the foundations of local power and transfer that power to the State, particularly the leaders thereof? I understand all the local governments and their organizations, like GMA, oppose the Speaker’s plan.

The real question is where is the additional money going to come from? Property taxes account for about 8 to 10 billion in tax collections. So where are you going to get that kind of money? As I understand it, the Speaker initially proposed to just eliminate all (or most) exemptions to the sales tax. According to Alan, two of those exemptions need to be kept: (1) governmental purchases, and (2) business to business purchases. And these two exemptions account for $5 billion in exemptions. The point: if you keep just these two exemptions in place, there is no way the sales tax can make up the tax revenue lost by the elimination of the property tax.

Now if I were planning a budget, I would conclude game over, you can’t eliminate property taxes and make up the difference in sales taxes. But there he is, Speaker Richardson, going around the state pumping up the landed gentry and making this sound like it is a walk in the park–a tax exempt park, no doubt.

There is only one thing to be accomplished by the elimination of property taxes. Rich folk that own a lot (and I mean a lot) of property will get a tax break. The rest of us that don’t own tons of rental property or commercial property or anything much more than our homes, that just work at a job everyday for a living, that have kids and buy everything on the shelves, will pay more in taxes–sales taxes.

Let me predict the future. The Speaker (more likely, someone else at his direction) will drop the bill to eliminate the property tax a week or so before the 2008 legislature begins. The Speaker will flex his muscles, threaten a few recalcitrants, and ultimately his power will make sure the proposal (whatever it is) sails thru the House with little or no hearings and none worth a damn. Then, it’s over to the Senate where the question will be whether or not Lt. Governor Casey Cagle (or some other Republican leader with the guts to “just say no”) is man enough to tell the Speaker to go back to the country club and kill this kind of cram it down your throat leglislative initiative. You have my vote Casey!

Think I am nuts! Look down the road to the 2010 gubernatorial elections. Will it be the Speaker who single handledly eliminated the property tax and saved 500 Georgians a ton of money versus the Lt. Gov. who protected Georgians from the selfish impulses of power and kept the property tax in place?

 
 Alan Essig, Georgia Budget and Policy Institute [29:45m]: Play Now | Play in Popup | Download (214)

Interview with James Williams, GriftDrift on Voter ID Ruling and Property Tax Reform

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Wilson
on September 10, 2007
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Just last week, September 6th, U. S. District Court Judge Murphy, ruled in the Voter ID/Photo ID litigation that has been going on since 2005. Judge Murphy didn’t get around to deciding the issue of whether or not the law was constitutional. Instead, he found that the plaintiffs in the case (two individual voters and a bunch of organizations like Common Cause, the League of Women Voters and the NAACP) did not have standing to complain about the law.

While James and I may differ on whether or not the Court should have found that the plaintiffs had “standing,” we agree this was one of those pieces of legislation that was passed for purely political reasons, was totatlly unnecessary and had nothing to do with voter fraud–which essentially doesn’t exist at the polling booth.

I think I lost the battle of logic versus emotion to James because of his bottom line: If this law prevents people from voting, why couldn’t the plaintiffs find someone that it would actually prevent from voting? Good question, James! But I still don’t like the law! But what do I know, I’m only a lawyer!

Having lost that battle, we then get into Speaker Richardson’s plan to do away with the property tax at the 2008 session. I think we both agree that getting this accomplished is going to be war: Local government versus State government.

I can’t wait for 2008!

 
 James Williams, GriftDrift, Photo ID Ruling [26:34m]: Play Now | Play in Popup | Download (216)

Interview with George Powell, Chairman of the Toombs County Board of Assessors and Angela Waldron

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on June 1, 2006
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Chief Appraisor address the local concern about increases in property values and the new assessment notices property owners are receiving. George explains that property values are going up in Toombs County but that does not mean your property taxes will go up. Property taxes increase only if the County and School Districts spend more money.

 
 Standard Podcast [29:34m]: Play Now | Play in Popup | Download (189)