News Brief Sept 18, 2006

News Brief - Sept 18 2006

The township has begun to televise Planning Board meetings. This has been long over due but started because the planning board requested it. In addition the Township website now provides streaming audio of township meetings.

There has been a freeze on tax assessments for one year. This was largely the work of Councilwoman Terry Danile. TUF is neutral on yearly vs. other than yearly assessments. Most people believe that assessments are what leads to increased taxes. TUF has covered that multiple times (1 2) and we maintain government spending is what raises taxes (that one of the things that drives spending growth is population growth).

To explain lets say the government levy was $1000. Assessments are then used to decide how much each of you will pay. Assessments do not determine how much the government will collect. In this case they will get their $1000 regardless of how the assessments come out. If there are four houses in town and each is assessed at $100,000 then everyone would pay the same, $250. $250 + $250 + $250 + $250 = $1000. If you double the price of each house equally then they would still all pay $250.

If however two are assessed at $50,000 and two are assessed at $150,000 then the homeowners of the cheaper houses would each pay $125 and the owners of the more expensive houses would each pay $375. $125 + $125 + $375 + $375 = $1000. Either way the government gets their money.

If your assessment increased more than the average (and spending stayed the same) then your taxes will go up, but if other home assessments increase more than your home's then your taxes would go down. It's a crap shout in any given year which house will increase in value more. So on average they all increase approximately at the same rate.

Getting back to our example if assessments stayed the same and spending went up 10$ then your taxes would go up 10%.

This freeze of tax assessments may or may not do anything but it could actually cost you money. There is one reason why yearly assessments do raise your taxes slightly and this is part of the reason why Ms. Danile wanted the freeze. Lately housing values have gone up faster than commercial property thus home owners are required to pay for a bigger piece of the pie. Her intentions are genuine, she is trying to lower taxes to the homeowner however, by shear chance, her plan may backfire. The recent housing market slump may cause housing prices to actually decrease but may not effect commercial prices. If that happens then you will pay a small amount more in your taxes than if there were not a freeze even if spending stayed the same.

The other reason that Ms. Danile wanted the tax freeze is that it turns out that last year the assessor made errors on 800 homes. In this regard Ms. Danile is 100% correct. The system needs to be fixed before assessments should be resumed. Just remember, you heard it here first, even with the freeze your taxes will go up.

The last piece of news is that in an effort to hold down property taxes the Township Manager and Council is making every effort to keep the increase in the Municipal portion of the tax levy down to 5%. If you take inflation over that last year of 4.5% into account. This is only a 0.5% increase over inflation. If you assume that the population growth this year equals last year (1.45%) and that cost of services to the community will increase with the size of the community then one would expect and increase of 4.5% times 1.45% or 6%. So the levy growth is 1% less than one would expect given inflation and population growth.

TUF will need to look into this a bit more but at the surface the council and staff are to be commended. We are forced to wonder however if there is more that can be done. We have witnessed overtime spending to enforce a flawed sign ordinance, the firing of FTTV volunteers so that we are paying videographers over $100 each to tape each meeting and political influence effecting a printing contract that would have cost Franklin over $17,000 had it not been exposed. Our fear is that this is the tip of the iceberg.

We will also reiterate that one thing that drives spending growth (other than waste) is population growth. Of late this council has allowed zoning density increases that have and will lead to population growth that will increase the number of children in our schools. Each child costs at least $10,000 a year to educate and each house on average puts 1.5 children in school. Since most homes do not pay close to $15,000 in taxes then most homes cost more in taxes than they contribute. The only way to generate the needed money is to raise the taxes for all.