Tax Revolt?

Property Tax Revolt I ran across the yard sign pictured at left quite a few times as I was driving through central Orange County today, particularly plastered along the strip-mall section of Hillsborough along Churton St between the two interstates. Something tells me these folks aren't interested in "revolting" by lobbying their state representatives to allow us to utilize alternative revenue options. Does anyone have any insight about the story behind the signs? Is this a grassroots effort or is there an existing anti-tax group sponsoring this?



And North Chatham  3285.00

Tonight the BoCC had a scheduled meeting at the Senior Center in Hillsborough. Though the tax issue was not on the agenda, the 250 person meeting venue was overcapacity by at least 6:45. Deputies turned people away long before the meeting space "appeared" to be even close to a realistic capacity, citing fire regs. They also repeatedly admonished those of us in the hallways that we couldn't block fire exits in case of fire. The peaceably assembled crowd pretty much complied, though comments about over zealous enforcement of "fire" codes were heard repeatedly. By the 7pm meeting start time, approximately 75-100 people were milling around outside the closed door meeting hall. And more kept coming into the parking lot, only to be told that there was no room inside. I have no idea how many in total were turned away.  I spoke with a few people who were there hoping that the county commissioners would take comments on the property tax revaluations. Many had comments to the effect that they felt that the CCs had purposely picked such a small venue to deter the tax revolters from being heard. I patiently told as many of them as I could, that NO, in reality, this meeting was scheduled in advance for other agenda items and that the tax revolt organizers were just trying to capitalize on momentum. Interestingly, most seemed to have no idea who was behind the "tax revolt" and many seemed not terribly interested in hearing what the FreedomWorks folks had to say. They simply wanted to be heard and seen by their county representatives. Those who snarkily refer to this as being led by Dick Armey and crew have utterly no idea what they're talking about. This movement may have been co-opted by GOP minions, but it's really all about local folks feeling like they have no voice. 

This is all quite predictable (and indeed it was even predicted above).  But where do the misunderstandings originate?I am seriously asking.  I don't feel like the commissioners have been misleading about this whole process (although I am sure one of someone will be quick to explain how the BOCC is perpetrating some devious plan).

This bit in the original N&O article announcing the meeting is of interest."County Assessor John Smith has said for months that the commissioners could call for a second revaluation if they think the market value of property has fallen below the latest assessments. " of last night's meeting here.   

Is it really going to change the percentage contribution of many properties by a significant amount?  Is that significant amount worth the cost of doing the revaluation again? What I worry about most is the inequity of folks who file appeals getting lower values compared to their neighbors who don't bother.  While it shouldn't take an appeal to get a "correct" value, the goal of this process is to ensure equity and if we only adjust some properties for the recent swings in the market, we lose that equity.

The whole purpose in rescinding the valuation is that it helps to flatten out and make the the payment of taxes more equitable for all. This combined with holding the line on the rate or even reducing it will give people some breathing room in these harsh economic times. I fail to see what services I get for the huge amount of money I keep pouring into this runaway train. Thx


People don't like paying taxes.  It's a truism.  I can't believe how many people on here are trying to make it into something else.  If people voted directly on whether something should be taxed then all taxes would be a lot lower than they are.  People are saying that it's irrational for the public to be protesting about the higher valuations when they don't even know yet whether that will result in higher taxes, and that's true, but it's also irrational that how much local government spends and what it does is determined by the people that are interested enough to get involved.  I mean, there are a big chunk of people that just don't care and they'd rather their money not be spent at all so they could have it instead but they just grumble quietly and pay the taxes.  And then every now and then they get riled up and yell about taxes being too high.  Their getting riled up every now and then is irrational but so is their staying quiet most of the time.  

These same people sat around while the Treasury was looted in plain sight to enrich Halliburton, KBR, the Carlyle group, etc. Well, maybe they didn't just sit around - they bought "support the troops stickers". I would say that many suffer from some sort of ideological virus that clouds objectivity.

Even as they supported historic spending on the wrong things, they complained about taxes being too high.  Like that free lunch was "generational theivery" too.  But perhaps we get off-topic here.....

I think you are wrongly injecting national politics into what is a local issue. I was at the BOCC meeting and I saw people from all walks of life and all areas of the county, some that their families have been here for over 100 years. These people myself included are concerned that if this runaway train continues we will be gentrifed from our houses. Many of these people are on fixed incomes as I will be in a few years. Facing this kind of runaway growth in bot valuation and tax rate is a major concenr in whehter we can afford to pay the property tax and our houses.I did not hear any talk of what you have implied. Thx

framing a position using words such as "these people" and "they" is immediately divisive by definition, and ultimately not helpful ... why is it OK when you employ these words as euphemisms for "republicans" but not OK if you used the same words to mean <insert your ethnic minority of choice>?"When you look for an enemy, first make sure he isn't you."

But if you're going to yell about paying too much taxes, you need specifics on what services you're willing to do without.  It isn't like governments take taxes and stuff them under the collective mattress -- every dollar gets spent on things for the public "good".  The BoCC is willing to dive deeply into those issues.  Unless you are too, I honestly don't see how it is helpful to say taxes are too high (which of course has nothing to do with revaluation, which is supposedly what has folks upset this week).

The valuation combined with the revenue neutral rate (around.818) gives you a baseline to think on. In my case at revenue neutral my tax bill will go up 5.71%. In 2005 my tax bill went up 19.8%. Historically BOCC has never gone with revenue neutral rate. So it IS rational to be protesting both the valuation and what the rate could be. The higher the valuation goes then the more you are paying and this gets compunded year after year with future increases and valuations. We need to flatten the system out so it is more equitable and find new sources of revenue such as a sales tax or resurrecting the transfer tax. The BOCC also needs to recognize that middle class people are hurting and can't keep footing an inequitable share of the bill compared to the services they pay for but get no benefit.Thx

The only services I *get* are:schoolsfire and EMSpolicelibraryand for these I pay (now) about $525 a month.  $525 is more than it costs me for: my combined utility bills, or, my combined transportation costs ... and it is nearly equal to my family's total grocery bill, and it is very close to actually exceeding the principle and interest payment on my mortgage!   Annually, the check I cut to Orange County is the largest single out-of-pocket expenditure I have.I am unhappy with the police coverage I get, I'm often less than impressed with the schools, I like the library, and the fire and EMS are top-notch.Get rid of everything else.  Um, wait a minute, for me, there ISN'T anything else!   

Some incindiery thoughts after a cursory look at comments...To the guy who's paying $525 a month (or $6,300 a year): the schools alone are worth way more than that.  Heck, fulltime daycare costs WAY MORE.  If you are worried about the size of the check, then pay by escrow monthly, like you do your mortgage. And when worrying about property taxes don't forget to calculate that nice federal tax deduction you are getting for your mortgage and the sweet interest rate that the govt is subsidizing and the fact that you can deduct your property taxes too.To the guy who's taxes went from $30K to $40K: I'd love to tour your estate! To the limited income people (esp elderly) who have a serious problem paying, I have real sympathy for you and that's where we need to figure something out.Mabye one problem is that every 8 years isn't often enough.  For people who haven't bought a new house, then 8 years is a lot of valuation increase. Not sure if it's possible to do it more often but I think it would reduce the sticker shock.David Beck

This debate engine is fired by far more than just the trigger-issue of non-credible valuations.  It's fired partly by stubborn rural vs. town cleavage but even more by conflicting philosophies of taxation.  The concept is the "common weal" - even if NC isn't a "commonwealth" - not pay-per-service. From the ultimate authority, wikipedia: "the common weal" comes from the old meaning of "wealth," which is "well-being." The idea that the only reason to pay tax is when it's for something from which you benefit, personally and directly, just doesn't work, even at the local level.   For one thing, there's the administrative overhead on top of specific services.  For another, there are some services you might not immediately need - hopefully, no one here has needed emergency services recently - but you might.  If you want a rec center and I want a library, should we have neither because the other doesn't want it and won't use it?  Or do we each contribute to a common fund and vote on distribution?   As for schools, it isn't just a matter of having a school-aged child - it's an investment in how our world works: the classic example is that one of those kids may take care of you in The Home someday and you'd better hope he/she can calculate dosages.  Finally, and obviously, if the quality of the services is poor, reducing taxes will only make that worse.

That's all fine and dandy and sounds great until you reach a tipping point where a vast majority of the people paying can't afford to pay anymore then something must be done. We have reached that point. People are facing furloughs and layoffs at the University, certainly people have been downsized that work in the Triangle. People are scared stiff about the uncertainty of their income. Now is not the time to put more property tax burden on the citizens of the county.Thx

I think it's clear I was not making a case for raising taxes or justifying the valuations - which may have followed procedure but don't empirically make much sense in the current scene -  or anything other than the fact that taxes, one way or another, are necessary.  Evil sometimes, but not dispensible and not tailored to any individual taxpayer's priorities.   People are indeed - and justifiably - scared stiff, but attacking local government as the cause and enemy misses entirely what has brought us to our current crisis. Yes, the valuation mess needs to be fixed, but that's just not the same issue as taxation, nor is it why people are facing furloughs, layoffs, canceled raises, early and penurious retirement, etc.  If you're "mad as hell and won't take it anymore," make sure you've got the right target, not to mention the right fix.

I understand that. I'm just stating reality. I'm not attacking the government. The commissioners are great conscientous people and just trying to do there job but there is a population that has not been represented well and have gone along with the system pulling there weight until now. Taxes are necessary but not to the extent that our porperty tax has grown. At the meeting last night, I did not get the impression people in general are attacking the government, they are expecting attention and a solution to this problem and not willing to accept business as usual.

Revaluation only impacts those who are going to have to pay a larger share of the pie.  I'm sorry if you are one of them, but that only means your property value has risen faster than the average in the county, so your share should be more.   Revaluation does not put an increased tax burden on the citizens of the county overall.  Period.  Never has. Never will. Sure, you'll point out that "revenue neutral" has only happened once in 20 years.  But how many times in non-revaluation years has the rate stayed the same as well?  Last year rates were up 4.8%, year before 5.2%, year before 7.1%, year before 4.6%, year before 4.1%.   Those increases are what drive us all nuts, but fighting revaluation as a surrogate for the real increases just seems silly.

Where is it written in stone that someone has to pay a larger share of the pie. The problem is the growth of the share of the pie is way out of wack to the point where the ability to pay is affected. Does it cost any more to educate my child than yours, why should higher valued property tax payers pay 2 or 3 times the average house pays.



If it's not the size of the property that serves as the basis for taxes, what should it be? Family size? Income? People who live in the mcmansions do use more services--they have more square footage to be protected from fire; they produce more stormwater; they have more things for the police to protect; they use more water; etc. etc.  

That's a joke Son.I don't find your reasoning very convincing. I'm not saying that a larger house should not pay more. I am saying that a larger house should not pay unrealistically higher than the average to the point where it affects an individuals abilty to stay in that house. We have reached that point. The system should be flattened out and maybe both sales tax and transfer tax should be implemented making the system more equitable and putting more burden (transfer tax) on the new growth causing much of the problem (ie new schools, schools take 50% of budget).Rescinding the valuation and going with revenue neutral rate is a good first step. Thx

Why should the system be "flattened out"???   What you're saying by that is that folks who live in cheaper houses should pay more.  Sorry, but regressive talk like that is not going to fly in OC.  To whom much has been given, much is expected!

I am not saying that the folks how live in cheaper house should pay more. I am saying thet the growth at the above average has gotten way out of hand to the point it is affecting people's ability to pay (especially retirees).Hey they did it in progressive CA why can't we do it here. Thx

In order to get the same total $, if you reduce burden on someone, someone else has to pay more. Which part of that math do you not understand?If your beef instead is with the total $, this is the wrong time to have that conversation -- budgets for the coming fiscal year aren't even proposed yet.CA's example is an interesting one.  You hear a lot of mixed things about that now (unintended consequences and all that).

Gee thanks for the implication that I am an idiot to all the people that read this site. All I am saying is the valuations combined with tax increases have gotten way out of hand to the point where we are impacting people's ability to pay. I agree that someone else has to pay more. That is why I supported the transfer tax, why I support a sales tax and why I support increasing the impact fees on new houses. The growth that is causing most of the increases is basically the need for more education budget which is 50% of the total. The growth comes from new residents which do not pay there fair share of the services they get. The marginal cost of adding new school capapcity is basically we have to build a new school. Now is not the time to implement these unrealistic revaluations and now is the time to implement a revenue neutral or lower tax rate. We are all tightening the belt. Chapel Hill is planning it's budget at no new increases. The BOCC should be doing the same.Thx

But again, increases in the county budget have nothing to do with revaluation.  And my point about increasing someone is that this "flattening" you support is regardless of which portion of the pie property tax supports.  You can't say we're going to cut taxes for some in property tax and make up for the rest in another source of revenue.  That's still regressive.  And mixing up the argument about revaluation with all these other notions is not intellectually honest.  Not by you and certainly not by the tax revolters.As Joe said, revaluation is all about who pays what PORTION of the overall property tax bill.  End of story.  

Increase in the budget has everything to do with how much tax you pay and revaluation has huge influence on what you pay. Regressive, progressive whatever gressive, I am just arguing about what is fair to the citizens of OC. I am not arguing about cutting taxes for some, I am arguing about what is fair to pay and what sources we should consider to pay with. How about we lay off the implications of idiocy and dishonesty and stick to debating the issues instead of inciting flame wars. Your right end of story I disagree with your thoughts you disagree with mine. You certainly won't convince me your arguments are valid as well as I won't convince you of mine but it sure was fun debating with you.Thx

amoose, it's interesting that you mention the transfer tax. Did you vote for it?I thought it was a more equitable way to increase the burden on those who are creating it (people moving into the county), and at a time when folks are more able to pay (real estate closing). But folks out in the county voted it down resoundingly. I wonder if many of those folks would look at it differently now.

"folks out in the county" -> "folks out in the country";-)In any case, I believe the measure was voted down partially due to the negative publicity it got, but mostly because it was a bad idea.  Empowering any branch of government with a brand-new power to confiscate can never be good.  Why?  First:  Power corrupts, as we're told, and absolute power corrupts absolutely, again as it's said.  Connecting the next dot, power, in our economy, comes from money - but what constitutes corruption isn't a constant, it's an opinion.  We need to codify corruption to get rid of it, instead of trying to get rid of the money, which won't ever work.  Justice comes from the elimination of corruption.  So, what IS corruption?  It's all around us, but not always obvious.  For example, I believe that unfunded mandates are a form of corruption.  It's bad enough to think your idea is so great that it's worth spending my money on it with first explicitly asking me, it's even worse -indeed, corrupt- to do the same thing and force SOMEBODY ELSE to spend my money without asking.  A certain national politician, no longer in office, was fond of doing that.  The only people to complain, however, were those whose opinion was counter to the idea. Second: Power is lost first by acquiescence, then by fiat, and it's a darned short line between these points.None of this matters when you recognize that the County's role as a de facto wealth-redistribution engine is illegitimate and will now be coming to an abrupt halt.  Mike Nelson's quote in today's Chapel Hill News was telling: "After 20 years of tax increases 'people have hit the wall'."  Indeed.So, no.  The transfer tax is not a solution, by both principle and effect, and I doubt anyone would see it differently now than they did before.   People know that cutting spending is one of the two real solutions, and it starts by having the County go back to providing only necessary services within its charter ... and having a more representatively democratic process to codify what "necessary" means.  Wen Gong captured this sentiment, in the same CHN article: "I don't know who voted these people in here," said the Chinese immigrant turned US citizen and repeat Democrat voter.  "I'm going to join [the] Republicans." As I pointed out WAY earlier in this thread, the BoCC has done for the Orange County GOP what the GOP could never do for itself.   Mr. Gong has simply ratified this idea, independently, and I suspect he isn't alone.The other of the two solutions to the County tax morass is the realization that much of the County's taxable asset base, roughly half, is essentially off-limits for regular rate assessment - and much of that land is 'exempt' for truly questionable reason.  It's a political third rail that must be exposed and de-energized if any equitable solution is to move forward.

This is getting silly.  Big house, little house, big family, no kids ... we're all in the same boat.  I value my stuff as highly as any McMansion owner does.  I want the same protection from fire.  Water use is an extraneous argument; it's an OWASA issue, not a taxation factor.  I'm aware that citizens without kids in school feel taxed unfairly.  Pardon my language, but that's just plain dumb.  Good schools = healthy communities, and if some percentage of my tax dollars is designated for schools, I'm fine with that.    

Valuation is all about how the property tax burden is distributed.  If, as the newspapers report, the countywide valuation increased 22 pct, while the  valuations within the CH city limits increased 29 pct, then the new values shift the tax burden southward and from rural to urban.While I understand everyone's, rural and urban, reaction to the sticker shock, there is one point that confuses me.  From the show of hands at the tax revolt meeting at the Big Barn, most of the people were from unincorporated Orange.  If keeping their taxes low is their primary goal,  they should favor the new valuations over the old, not lobby the commissioners to rescind the new values. 

Golly Gee, I live in unincorporated OC and I have the rare privilege (HA HA) of finally being included with the Chapel Hill crowd. My valuation went up almost 29%. I have analyzed most of the neighborhoods in my area (Bingham Township) and they have seen similar increases if not more. Us Gomers aren't stupid like you imply (even though we drive old GMC pickups). We understand fully that unrealistic high valuations mean higher taxes (even at the rev neutral rate) as well as increasing the tax rate over the revenue neutral rate.Thx  

It may not make sense logically.  But people are extremely emotionally attached to their housing values.   They pay attention to their real estate values far more than the tax rate, and for many people, the equity in their homes is  the retirement savings they are counting on.   Real estate values are collapsing and then you get a letter in the mail saying your property is worth X and you know it probably isn't.   So that's the fuel driving this fire.  .   I suspect that if you rolled the valuations back to the 2004 and increased the tax rate, people would find that easier to accept than  a higher value, lower tax rate,.    They are doing the math with the 2009 value, 2008  tax rate, and looking at the increase.   I know that isn't reality, but that's what's happening.  I think getting to a budget consensus and setting the tax rates quickly will help this situation.   Its the uncertainty of what the bill will be that is the greatest feeder of anxiety.  

People are upset because: A: Tax rates historically creep back up after being lowered for revaluation. Even if elected officials this year take the rare step of actually holding the revenue-neutral rate, it's safe to assume tax rates will gradually increase in subsequent years to close to where they are now. It's easy to do the math and assume that if revaluation increased your property value (even less than the county average) your taxes will go up -- if not this year than next year or the year after. It's not unreasonable for people to assume that what's happened for the past many years will happen again. B. The longer you've owned your property, the more your tax bill is probably out of whack with your income and other expenses. When you buy your house, whether it's a $50,000 condo or a $1,000,000 McMansion, its price and expenses (taxes, interest, etc.) match your income's ability to repay it. But as values and taxes go up over time, the tax bill seems an increasingly onerous burden. My house cost about $150,000 in 1993 and is worth about $300,000 now. Even if my house and an identical $300,000 one next door get the same tax bill, the guy next door who bought his house last year is better able to afford it because he makes enough money to buy a $300,000 house while I don't. Not many people's incomes have kept up with rising property values and tax bills.C. Add economic anxieties and dwindling nest eggs to the above and you've got more people protesting revaluation this year than in the past. It's certainly fair to ask "tax revolters" or whatever you want to call them what they would cut to save money. But I think it's unfair to dismiss them as a bunch of anti-government, pro-war, Dick Armey disciples when they have reasonable concerns about their tax values. that taxes go up every year in OC.  Because the BoCC spends more $.  Every year.   Be upset at that all day.  Have at it.  But don't pretend that it has anything to do with revaluation.  

Sorry to disagree but I ain't pretending.Valuation plays a huge contribution to what you pay in taxes. If your valuation goes up over the average you will pay more taxes at the revenue neutral rate. If the taxes go up over the revenue neutral you get the double whammy. As this ridiculous growth rates in the valuation continue the compounding affect of annual tax increase over the years causes your taxes to grow at an exorbitant rate to the point where your ability to pay is affected especially for people retired and about to retire that have worked all there lives for their houses and are and will be on a fixed income. Now reduce your retirement portfolio by 40% and see how you feel.It's pretty simple and I hope you can understand why so many people are upset.Thx

That is it.  If people feel like they're paying more, after adjustment for inflation and after adjustment for any change in their station in life, they get pissed off and push back.  I mean, I don't think people keep extremely close track of it but if they start to feel like they're paying more and more then they get tired of it. After adjusting for inflation, what are the per capita local taxes compared to 10 or 20 years ago?  Or even after adjusting for home values too?  I don't know but if it's more then nobody should be surprised people push back.  People naturally want to have a direct choice on what happens to their money.  That's why nobody ever just puts their money in a big box and abandons it in the street.  Even if they decide they want to give their money away, they want to be the one to decide who gets it.

Laura stated that well.     

Some states have a grandfathering provision by which there's a cap on the rate of future increases locked in at the date of purchase.  People in their houses for 10 yrs. may therefore pay less than those who just purchased last year - and the upshot of that, I suppose, is that recent arrivals can find themselves paying much, much more than previous occupants.  I can see pros and cons to that, but I wonder if it's ever been proposed for OC. (And apologies if this was covered much earlier - I've kind of gone cross-eyed trying to stay current with this enormous thread.)

Great idea. New purchasers woull know what they are getting into and whether they can afford it.Thx

Priscilla,Wikipedia has a lot of details regarding Proposition 13 in California. of the basis of its passage has similarities to what you and others described (people being priced out of their homes) and what you suggested could happen (new arrivals bearing the cost more than existing residents).  I suspect that it has contributed to California being one of the most costly places in the US to purchase a home.  And that is also part of the reason that when Californians sell the home they've been in for a number of years they usually leave the state (because taxes on a comparable home will be based on the purchase price).I can understand the rationale behind keeping taxes from pricing people out of their home but I'm not convinced the California approach has shown itself to be a good, overall solution.

My only experience with it is in Fla., where it was largely in the context of retirees and how they might arrange their lives and housing.

Grandfathering, or "Save Our Homes" as it is called in Florida, has created its own tax mess. Over the last 16-17 years this system has created great inequities between homesteaded properties (those protected by the SOH act) and non-homesteaded or commercial properties. It also taxes people differently based on when the home was purchased.

 Scenario: House A is purchased in 2000 for an actual value of $100,000. SOH includes a $25,000 tax exemption for homesteaded properties, and also dictates that the taxable value of that home can only increase by the greater of 3% or CPI each year. In 2005, the assessed value of House A is just under $87,000 assuming a 3% increase. Assuming that the actual value of House A increased by the same percentage, the actual value of House A would be  about $116,000, creating a $29,000 gap between assessed value and real value.

House B is identical in every way to House A, but is purchased in 2005 for the actual value of $116,000. Using a millage rate of .02003145 (actual tax rate on my current property in FL), the taxes on House A would be about $1,700 while House B would be taxed about $2,300, a difference of $600 on identical properties. That doesn't sound like much, but consider than from 2000-2005 properties in Florida appreciated by over 20% each year and you get inequities of several thousand dollars on identical properties.

To make things more fun, if the owner of House A (assessed value $87k, actual value $116k) sold that House and purchased identical House B (assessed and real value $116k), that homeowners taxes would increase by $600 instantly. What ended up happening is that homeowners who bought homes before the boom sold them at wildly inflated values and purchased new homes with values equal to or even less than the selling price of their home, only to find that their tax burden had increased drastically.

Florida is currently in the midst of a true tax revolt. The legislature has tinkered with the tax system without fixing the inherent inequities, which has only worsened the situation and burdened local governments with severe revenue losses. I know how much the citizenry of OC prides themselves on the school system. Search any Florida newspaper and see what has happened to education in Florida during this mess.

Let us not forget that counties across NC are making the mistake of thinking real estate is ALWAYS rising in value.   Orange County is making that assumption in a major way with a tax increase that probably is out of whack with current and foreseeable values.    One of several reasons we got into the current economic mess is that many assumed real estate always is rising in value.


 My family’s investment guru has continuously said real estate in Orange County was growing at 8 to 10% per year.  He did not guarantee it would continue but all the same he gave a rosy outlook.  The logic of that thinking says the value of real estate is infinite.   I buy at 300K today and sell at 3500K in 3 years or so.  That is bad logic.  Why is it that property taxes cannot remain constant or rise only with inflation in economic crisis?   Our county, like the vast majority of counties, subscribes to the bad logic that real estate always appreciates in value.


Orange County needs to back off the tax increase via property tax by a large percentage and look for additional sources of revenue.  We citizens of Orange County must realize that we have consistently supported leadership that makes property tax the primary (only?) revenue source.   I know the county is cutting expenses.  We may need to cut even more.  My fear is that schools will by necessity lose funding.


Residential property owners had grown accustomed to having their
property assessed at a value below its market value. This informal tax
privilege was not only valuable in absolute terms, but psychologically
because the privilege essentially meant that property taxes on one's
home would rise little, if at all, over the many years that one might
own the home. From the perspective of political and tax theory, such an
informal privilege invited corruption and inefficient use of resources.
Nevertheless, the informal privilege did provide a valuable form of
social insurance and was perceived as such, especially by those voters
on fixed incomes. According to Martin, the tax revolt was not sparked
by jaded consumers, but by angry homeowners who had deep ties to their
communities and did not want to be displaced by market forces.

Full abstract:

The reverberations of the tax revolt that began in California in 1978
remain very much with us. Taxes were cut dramatically first in
California, then throughout the country at the state level, and then at
the federal level. The tax revolt has generated a huge literature in
the legal academy (and elsewhere), much of it aimed at explaining why
it happened when and how that it did.

Martin, a sociologist, offers a new explanation for the tax revolt in
The Permanent Tax Revolt. This review essay summarizes this book and
then proceeds to demonstrate how Martin's analysis undermines the
dominant approach to local government law and finance - the Tiebout

What is most perplexing about the tax revolt is why it
began with the local property tax. This tax would seem to have been
directly under the control of the voters. If the property tax rate was
perceived as too high, then voters just needed to elect local officials
who would lower taxes. The prevalent explanation (that of William
Fischel) for the great tax revolt that began in California is that an
event happened at the state level that systematically caused voters to
turn against the property tax. This supposed catalyst was the mandate
handed down by the California Supreme Court that the state must
equalize school funding across school districts. This meant,
pragmatically, that one's local property taxes could no longer go
directly to support one's local schools. Faced with this prospect,
voters rejected the property tax. Note that in this model local voters
are analyzed as consumers who treated their taxes as a price for a
service; they revolted when it appeared they would be asked to pay the
price without the service. Note as well that this explanation for the
tax revolt suggests that virtually any attempt to achieve more
equitable public school finance at the local level is doomed to be
self-defeating because Americans expect a market-type relationship
between local taxes and services.

Martin argues that this
explanation for the tax revolt is false. Martin explains that the tax
revolt is better understood as a response to a change in the manner in
which the property tax was collected. Residential property owners had
grown accustomed to having their property assessed at a value below its
market value. This informal tax privilege was not only valuable in
absolute terms, but psychologically because the privilege essentially
meant that property taxes on one's home would rise little, if at all,
over the many years that one might own the home. From the perspective
of political and tax theory, such an informal privilege invited
corruption and inefficient use of resources. Nevertheless, the informal
privilege did provide a valuable form of social insurance and was
perceived as such, especially by those voters on fixed incomes.
According to Martin, the tax revolt was not sparked by jaded consumers,
but by angry homeowners who had deep ties to their communities and did
not want to be displaced by market forces. On Martin's view the tax
revolt should caution policymakers from doing away with vital forms of
social insurance that protect local homeowners from market forces. This
is essentially the reverse of the prevailing wisdom described above,
which insists that voters will not tolerate a deviation from the rule
of market forces at the local level. 


Just some thoughts for consideration.



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