GRANOLAPARK: Tax the old!

GRANOLAPARK • BY GILBERT

Dear Readers,

Takoma Park’s taxes are going up. But don’t worry, it’ll mostly hit the old, retired, and poorest home owners.

The city manger proposes not to raise OR lower the tax rate, but don’t be fooled – that amounts to a tax raise.

And that means a tax double-whammy on long-residing, older city homeowners.

The cap

Folks who bought their Takoma Park homes decades ago paid much less than they are worth now.

Their real estate tax rates have not kept up with the assessed value of their homes. Lucky for them the county puts a 15% cap on the yearly increase so they don’t get clobbered all at once.

Nevertheless, those people’s real estate taxes creep up year to year.

Slick and slippery

Here’s how the city proposes to stick it to them. It’s slick. They can boast that they aren’t raising the the tax rate.

They aren’t raising it, yes, but they aren’t lowering it. If they lowered it most homeowners would pay the same amount or less than last year.

But they can’t do THAT, Dear Readers. That would not fund all the new programs and expenses the city budget proposes.

Rest easy, you newer, better-off homeowners who are paying your full real-estate taxes. You’ll pay about the same as last year.

You older, long-time residents who pay the automatic 15% yearly rise will pay that 15% extra to the county AND the tax on that higher amount to the city. A double-whammy!

Sitting pretty

Those venerable citizens who bought homes 30-40 years ago are now at least middle aged. These are the people who shaped the city the newer residents are attracted to. Now, some are retired, living on fixed incomes. Few could now afford a house in Takoma Park, where home prices have soared as much as 1000% since the 1970s and 80s.

Sure, if they sell they’ll be sitting pretty, but that doesn’t pay the tax bill, and they couldn’t afford to buy again in Takoma Park.

Public hearing

The city, as required by state law, is holding a public hearing on the tax increase at their Monday, April 28 meeting.

Budget Public Hearings – Monday, April 28, 7:00 p.m. in the Auditorium: 1) Public Hearing on the FY 2015 Proposed Budget. The proposed budget may be viewed at: http://takomaparkmd.us6.list-manage.com/track/click?u=7eeebe001a5959260ff9ae083&id=20ba1ff749&e=96caabc7ff. 2) Public Hearing on the Property Tax Rate. The City is considering not reducing its real property tax rate enough to fully offset increasing assessments. The City proposes to adopt a real property tax rate of $0.57 per $100 of assessment. This tax rate is 1.1% higher than the constant yield tax rate of $0.5640 and will generate $118,150 in additional property tax revenues. The public is encouraged to attend the public hearings and sign up to speak. The full notice of the property tax rate hearing may be viewed at: http://takomaparkmd.us6.list-manage.com/track/click?u=7eeebe001a5959260ff9ae083&id=073629a3c0&e=96caabc7ff.

Ya’ll come, and bring the torches and pitchforks!

 – Gilbert

 

 

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About the Author

Gilbert
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.

8 Comments on "GRANOLAPARK: Tax the old!"

  1. “You older, long-time residents who pay the automatic 15% yearly rise will pay that 15% extra to the county AND the tax on that higher amount to the city. A double-whammy!”

    You mean people like Gilbert!

    • Lester Craddock | May 6, 2014 at 12:40 pm |

      As a former resident of Takoma Park, dating back to when one of the earliest communes, Toad Hall, burned down and Maggie’s Farm sold various “farming and harvesting utensils,” as well as tools to enjoy the crop, and Joe’s Record Paradise sold cut-out vinyls for two bucks a piece, great food could be had at The Electric Maid and so on…who stayed through the loss of the last truly great Mayor, Sam Abbott and through the gentrification, I don’t find it odd that the more privileged are safe from additional taxes and I shed a tear (albeit one of the crocodile variety) to hear so much about all the crime taking place against the groovy, primarily white folks, who now inhabit the formerly affordable habitats in the City. If only the poor minorities in the surrounding, and in some cases, immediate area would go out and work for a living, instead of preying on those more fortunate than themselves…

  2. Bruce Williams, Mayor | April 26, 2014 at 6:59 am |

    Gilbert

    First a correction, then a comment. It is the state that imposes a 10% cap on the increase in assessment value, not the county that imposes as 15% cap. Most if not all property owners in Takoma Park have reached full assessed value because in the last two reassessments, the values decreased, then rose very slightly or continued to drop. So, oldtimers and newcomers are paying on the same basis. Your description of the situation was closer to reality about 4-5 years ago, but things have changed significantly.

    I’ll use my own property as an example. My 100% assessed value and the assessment cap were very close in 2001–only $3,700 apart. With the reassessment in 2004, the difference was almost $30,000. In 2007, the difference was $115,000. The maximum difference was 2009, when it was about $148,000. However, with the reassessment in 2010, my assessed value dropped by $81,000 and the difference was only $27,000 (don’t forget that the cap value moved up as the assessment moved down that year). By 2011, my assessment cap and my 100% assessed value were in line with each other, and the difference has continued at $0 every year since.

    So, the only increased assessment value that people are paying on now is value added by renovations, or when a new owner purchases a property for a price greater than the assessed value. I’d venture to say that most if not all long-time property owners have been in the same situation as I for a few years now.

    Bruce Williams, Mayor

  3. What Bruce said. Few Takoma Park property owners will see increases.

    Property taxes are public information, and information is available online. I checked a random property-tax record, for [address removed]. That property owner would pay exactly the same for next year as this current year. That person will pay $151.06 LESS than paid for the year July 1, 2012-June 30, 2013, however, because a) the city cut its rate from $.58 to $.57 last year, and b) the assessment was lowered from $513,100 to $495,600. By contrast, that person’s Montgomery County property taxes went up because the county raised its rate from $1.00 to $1.02, even when the city was cutting its rate.

    It seems to me that county property taxes are the bigger concern for us Takoma Park residents. The rate went last year to the point where 79% above the city’s rate, $1.02 versus $.57.

  4. Geez, we try and get people interested in the budget and the council quibbles about facts.

    Thanks for the information and corrections (if they are corrections). According to Takoma Park Mayor Bruce Williams and Ward 1 Councilmember Seth Grimes above everything is sweetness and sunshine and hardly anyone will pay more taxes.

    Still, the reality is that there’s a tax increase proposed which the city is legally obligated to hold a hearing on. Which begs the question – why do we need a bigger budget? Do we really need those additional costs and programs: dog park, $160,000 for unspecified sustainability initiatives, the Safe Grow weed police, a “Garden Maintenance Technician” to name a few of the more dubious.

    And what about the “hardly anyone” folks, those few whose budgets are already stretched thin to build an addition or buy a new home? $118,000 is going to be squeezed out of those people?

    OK, old-timers, pass the torches and pitchfolks to the addition-builders and new homeowners.

    Its not fair to shift a tax burden onto ANY group disproportionately. Instead, councilmembers, you should be cutting the budget so there is no additional tax burden. Show us that fiscal responsibility you claim to have.

    – Gilbert

  5. Gilbert, one more thought. The city property-tax increase, if we retain the .57 rate rather than adopting the .564 constant-yield rate, is 1.06% from the year before. The consumer-price index for the Washington DC region, for March, 2014, was up 1.6% from the year before (http://www.bls.gov/ro3/fax_9156.htm). Allowing that the timing is off by 3-4 months, since the fiscal year starts July 1, the City of Takoma Park property-tax increase would be is over half a point below the inflation rate! In inflation-adjusted terms, the .57 rate could not be considered a tax increase.

  6. Uh huh.

    Instead of putting all this brainpower into massaging the numbers how about using it to find ways to cut the fat out of the budget?

    – Gilbert

  7. Steve Davies | May 14, 2014 at 12:10 pm |

    Here’s one way to cut the budget: Stop spending thousands ($40,000 at last look) annually to plant scrawny street trees in the narrow strips of green between sidewalk and road. Most of the trees thus planted have grown very little over the years and have received only intermittent care — mulch spread all the way up to the trunk, for example (supposedly a no-no). These trees add almost nothing in terms of shade or habitat. If they bloom, they look good for a couple of weeks.

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