Time to End the Ad Valorem Property Tax


November 20, 2020 | 7:30 PM

Time to End the Ad Valorem Property Tax

Time to End the Ad Valorem Property Tax

This is a tad difficult to pen. I have been on the wrong side of this equation for quite some time. I was asleep at the political wheel until Barry came along. Didn’t vote in primaries or work elections as I assumed what the system produced was good enough to support in the general elections.

Lord, forgive those retarded ways.

When the meltdown began in 2008, I was knee deep in salvaging clients that were losing their shirts. When McCain won the nomination later in the year, I was concerned for the first time since the Republicans nominated dotard Robert Dole against Clinton in 1996. I had more skin in the game this time and when Barry came in and began the Great Communist Takeover, it was time to get off the sidelines and get in the game. I am not going to review my campaign here; rather a nugget of a topic that I thought was nuts at the time.

Outdated Tax Theory
I came from the education theory of property taxes providing local stability for police, fire, schools, etc. To question that dogma was to have folks look at you like you just ate a pile of fecal matter. In 2009, it was a hot topic among some candidates, but never the electorate. Stopping Barry and his ilk was the goal. Well, we know what happened there. Thanks George!

Roll the clock forward to 2016. Aside from Trump shaking the political world, I got talked into taking becoming a fire commissioner to serve on the Board for Johnson County Emergency Services District #1. To summarize – the Board sets policy & procedures; approves an annual operating budget; contracts volunteer and paid fire departments to provide fire and emergency services; and pays for un-Godly amounts of equipment to make all of this run. The funding is done via a property tax on the property owners in Johnson County which is currently at 6% per $100 of value. We generate somewhere in the 4 to 4.2 million of revenue for the District. You would be surprised at how far we stretch it.
In early 2017, I started putting pen to paper on the increase in call volumes, shock purchases (fire engines cost $500000 BEFORE you equip them), and a hit to our budget from an countywide real estate appraisal value rollback that knocked 20% off our revenue. Our projection ran a 7 year time frame of when the ESD would begin to operate in the red. Additionally, most of our department are volunteers in their mid to late 50’s and can only answer so many calls. At some point 911 becomes “we’ll get there when we can honey…”.

We need more money to be able to do the job. Period. So, what were the options – raise the ad valorem from 6% per 100 to 10% per 100 of value OR get into sales tax revenue and have more equity in the participation of services. You see almost everyone uses fire, police, and school services at some time or another, yet only property owners are doing the financial lifting?

While the ESD I serve is still working to get its solution for finances, one thing I have seen up front and personal is the sausage making that is the budget process. I have seen where, regardless of political affiliation or agency size, government agencies will suck up every taxpayer cent even when they need to cut costs. Our ESD is a piss ant agency and it still acts like the feds.

Last year I voted for a budget that had pay raises I did not agree with. The rest of the budget was good, but we were not putting back money as we could have. I find it difficult to ask for additional taxes of any kind when you are not being a monstrous tight ass with the current funds. I told my fellow Board members it would be the last budget I gave an “Aye” to if they pulled that crap again.

Well, kiss my behind if raises were not trotted out again this year. Costs more to operate from home for some of the group (insert your favorite whiny phrase…), etc, etc, etc. Three months earlier when health insurance came up for renewal with a 30% increase in premiums, yours truly had a shit fit and wanted a cut in benefits to keep costs at the year prior. Guess who was the only “no” vote. So when this budget came up and had the raises, I voted against this year’s budget. Even though I liked and worked on 99% of it.

Getting to the Point of this Diatribe
There is a point to this rant. If you look closely at where the violence and riots are being allowed during the Wuhan Flu, all are liberal democratic mayors. Mayors who can back off the cops and all of whom have the base of the ad valorem tax to keep their revenues constant. That does not mean they are not suffering economically – they get sales tax revenue as well and it is down during this crap, but the ad valorem provides enough funds for the here and now to get them through without cuts in pay or benefits while their cities burn.

And that’s the point – the ad valorem is too reliable and stable where these government hogs keep getting fatter and fatter.
Look at virtually any school district on your tax bill and they are the 8000 pound gorilla sucking up your monies. Do you feel you are getting a good return?

Modern Day Slavery
So you work to own your property after x amount of time. Got rid of the mortgage, but you can still lose your home to unpaid property taxes! How messed up is that? Now I am not saying we don’t need reasonable taxes for funding services, what I am saying is its time to get property owners out of ad valorem tax slavery and take away a major power play from local authorities. Could the mayors in Portland, Seattle, or NY perform the heinous crimes without real estate tax money floating them? Give me a solid answer of why municipalities and county authorities cannot work on sales tax revenue? Yes, I know its not as stable and that is my point – they will have to be more cautious in budgets.

The Consumption/Sales Tax Theory
I know this has been floated as a way to replace income taxes on a national basis. While I think it is time for this debate, the first place to start is at the local and county level. States already operate on sales taxes, so it’s a matter of the lower tiers to do the same. Every state will be different based upon its population. In my state of Texas, it has been projected to achieve this would be a sales tax rate of about 22%. That tells me 2 things – 1. We need to cut our expenses more; 2. That is still cheaper than what I pay in property taxes as compared to what I spend on goods and services. This would also aid in the rise of property values, as the long term burden of property taxes would be gone. That makes it easier to create wealth in real property.

Poor Timing for Such a Subject
With a Presidential election still up in the air on results, no one is going to give 8 eggs on this topic at the moment. Depending on who the recount awards, it could become a powerful tool for grassroots activists to get done at each state level and begin to defang the cobra of government.

In any case, it’s time to have the conversation once again.