Fact and Friction

This guest post is by Takoma Park resident Alain Thery.

*FACT*: According to a recent MontCo Planning Department housing study, between 1997 and 2005 Takoma Park residents experienced the highest increase in homeowners’ costs in the County (while at the same time facing the highest decrease in median income).

Could this above average increase in homeowners’ costs be related in any way to the sharp increases in property tax rates by the City during that period despite high increases in assessments toward the end of the period? Between 2005 and today, this increase in property taxes was modulated somewhat by a 7% decrease in the rate while assessment during the period rose 30%.

Looking at the 5/27/08 TP Council meeting, it does not look that the Council members in their majority are even aware of the situation that has been created for residents by relentless double-digit annual increases in City budgets approved by past and present Council members.

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Is this blindness the result of a clever manipulation by the City Manager that has become a master of annual claims that the City’s financial prospects are worrisome (even though, as this year, the data shows a healthy level of tax collection and only minor decreases in other funding sources) thereby precluding any serious questioning of her budget proposals. In fact, it is the City Manager who makes the financial prospects of the City increasingly problematic through her double-digit budget demands and her budget calculations initiated not on the State-calculated Constant Yield Tax Rate (CYTR) but on the past year approved tax rate and her reliance in dipping in reserve funds and borrowing.

Of course, the City Manager is savvy enough that she knows that, when confronted on the rate she proposes, she can count on reactions such as:

– Colleen Clay’s who seems to see the City as an employment agency; or
– Josh Wright’s, who when presented with a questioning of the automatic assumption of last year’s rate shoots from the hip with a counter-demand that the questioner identifies “areas of cuts”, quite confident that he will be able shoot them down.

Don’t they realize that if the budget preparation started from the CYTR, rather than from the previous year’s adopted rate, costs increases could be clearly identified and an increase from the CYTR be justified, i.e. it would not be a question of cutting services but see what is needed as funding. By starting from last year’s rate, identification of costs areas is being muddled as the revenue needed are already taken as an assumption.

Do Council members also have such a short memory that they have forgotten that current Mayor Bruce Williams campaigned for the post last fall on a platform of reviewing all City Departments? I have not seen any Council agenda items related to this promise since he took office and given the magnitude of the task it is unlikely that it was conducted with any seriousness without anybody noticing.

However, would not such an exercise have been quite useful for the Mayor and the Council to have a more informed view of the functioning and performance of each department prior to this budget cycle?

Tom Gagliardo, in his answer to the most recent Gilbert’s post, already made a number of suggestions as to how the City could change its ways of profligate spending. I suggest a examples of a few more:

– Eliminate two positions in the City Communications Department, leaving only that of Web master, and replacing them by Gilbert who so benevolently and so gracefully tends very often to present himself as the spokesperson and defender of City hall; [how much does it pay? – G]
– Given the loss of rental apartments in the city, is the continued level of allocation to Housing and Community Development justified.
– Do we know how many youth benefit from the activities of the Recreation Department and what is the cost per youth per type of activity?

A little thinking by a group of people who are interested in having City hall function efficiently and effectively would without a doubt come up with quite a few more areas to review.

So far, it looks like from the Council members only Dan Robinson and Terry Seamens have an appreciation of what the long-established ways of City hall bring to the residents and homeowners. I congratulate them for their concern about the people they are representing and for trying to address these issues. We can only wish that more of the Council members would share that attitude. It is not too late: the budget has to be approved by June 30 at the latest.
— Alain.

About the Author

Gilbert is the pseudonym of a hard-bitten, hard-drinking, long-time Takoma Park resident who maintains the granolapark blog. Gilbert and William L. Brown — Granola Park's mild-mannered chief of staff, researcher, and drink pourer — have never been seen in the same place at the same time.

5 Comments on "Fact and Friction"

  1. Seth Grimes | June 4, 2008 at 9:17 am |

    We’re comparing apples and, well, pears here:
    “Between 1997 and 2005 Takoma Park residents experienced the highest increase in homeowners’ costs in the County (while at the same time facing the highest decrease in median income).”
    The median income is by household, and 45% (?) of Takoma Park housing is rental. Those folks would not be affected by an increase in homeowner costs. In fact, one might suspect that the increase in homeowner costs has been so steep because the city’s revenues come primarily from property taxes and therefore the biggest burden of budget increases is borne by only slightly more than half of the city.
    As for the decrease in median income: it is *conceivable* that this is an effect of rent control. It was 2-3 years ago that a UMd study established that rents here are 25-30% below market — figures cited from memory — so the decrease in median income could be a testimony of the effectiveness of rent stabilization as an affordable-housing tool.
    What I mean to do is only to suggest that one shouldn’t draw unwarranted conclusions from the data.

  2. Alain Thery | June 4, 2008 at 10:40 am |

    “45% (?) of Takoma Park housing is rental. Those folks would not be affected by an increase in homeowner costs”
    1/ This 45% for which Seth is not certain is probably from the 2000 Census and there has been quite a loss in rental properties since then. I just have to look in my neighborhood.
    2/ The fact that the homeowners are supporting the costs of tax increases without being able to pass it on (except through a arduous process of proving hardship, as one owner of a rental property explained to me very recently) is probably contributing to condoisation.
    3/ What is Seth’s point anyway? He disagrees with the findings of the study (done on probably stronger information that he obviously has). But does that mean he also has quibble with the rest of the post on the traditional patterns of approaching budget making in TP?

  3. Maybe this is a dumb question, but why isn’t the city tax based on income rather than property value?

  4. Alain Thery | June 5, 2008 at 11:15 am |

    I think the better question is why are we taxed twice (once by MontCo and another time by the City) for a level of services that our elected leaders would be hard pressed to prove that it is so much better than in a non-incorporated jurisdiction>

  5. Alain,
    Are you saying that the root of your objections to the budget process is that you think the city should dis-incorporate and cease to be? If that is the case, then wouldn’t you object to ANY budget process?

Comments are closed.