Next month San Antonians will go to the polls to vote on $1.2 billion in bond proposals. It’s a whopper of a debt-binge that includes funding for unfinished projects authorized by prior bond elections, some of questionable legality, and others representing wasteful jurisdictional overlap.
Also on the ballot will be two constitutional amendments, both aimed at reducing property taxes. The issues are related.
Here in the Alamo City, part of the tax we pay on the investment we put into our homes goes toward paying off that debt. The city’s ability to continue tapping that source is subject to a couple of cross-currents.
One is soaring property appraisals. This allows the municipality to pull in more revenue without raising rates. Unfortunately, they opt to spend this windfall rather than cut rates, or at least raise exemptions.
The state of Texas has been picking up the slack on the latter.
In addition to the ones on the ballot in a few weeks, a couple more exemption-raising constitutional amendments were approved in November. Any reduction in this damaging tax is progress, and it puts citizens on more equitable footing with businesses that get favorable tax treatment.
But only some taxpayers benefit.
To state the obvious, this is unfair, and it increases the burden on the remaining, shrinking tax base, some of whom may eventually say “to heck with this” and move outside city limits. My dad did exactly that when I was a kid.
Our mayor on the other hand, believes this exodus is happening due to a lack of “affordable housing,” and prospective homebuyers “losing … bidding wars … to outside investors.”
The fact is, those investors are looking for safer assets as a result of poor monetary policy in Washington D.C.
The City Council practically salivates at the opportunity to take advantage of this, and other federal largesse, to spend on their pet projects. However, they can’t bring themselves to modestly raise exemptions on property taxes without the state compelling them to?
During the last effort to raise exemptions a year ago, one councilman said the savings to homeowners of the proposed hike would be “meaningless.” I agree. That’s why the entire scheme should be eliminated.
The reaction of most politicians, regardless of jurisdiction or political party, is typically “but how will we fill the revenue hole in the budget?” Whether that’s due to lack of respect for citizens, envy or ignorance is anyone’s guess.
I tend to give them the benefit of the doubt that they just don’t know any better.
For one, taxpayers will not simply stuff the reclaimed $400+ million in tax seizures under the mattress. They’ll inevitably go shopping, thereby pumping up sales tax revenue. Or even better, some might use it to launch a business venture, hiring more sales tax-paying employees.
Maybe in addition to appealing to residents to “buy local,” our elected representatives should also urge them to “invest local.”
They could also show more respect to enterprising individuals and businesses by eliminating city programs that are better- and/or already handled by these folks. As it is, they appear to have more faith in their ability to spend taxpayer money than they do in that of the taxpayers’ themselves.
For example, rather than expanding control and increasing subsidization of “food access” programs, how about removing obstacles to its development, and selling plots of city-owned land to urban farmers?
Members of council who have owned a business should know all of this. If not, they’re more prone to cronyism.
If all this is a bridge too far for their ego, they could at least choose the least worst option by adding a fraction to the city’s sales tax rate. If they agree with the aforementioned councilman’s sentiment, one would assume they’d feel the same about consumers paying a few more dollars for another T.V.
If citizens are serious about stopping municipal versions of federal omnibus spending bills, it is critical to also demand the elimination of this coercive property tax. It would bump up the GDP portion of our state–high debt/GDP, which itself calls into question how much more we can take on with a handicapped ability to pay for it.
Depending more on the most efficient form of taxation would force the city to depend on the health of the economy for its spending, rather than on devalued dollars. It would have more incentive to clear excessively burdensome hurdles to commercial activity.
Otherwise, they can count on us wasting valuable time protesting appraisals, putting on workshops to teach others how to do the same, numbing ourselves to it all by outsourcing the escrow process to our mortgage lenders, etc.
Next month, citizens can put a stop to the city borrowing like a teenager who stole his parents’ credit card. We should also put them in a timeout until they stop plundering our bank accounts.
Christopher E. Baecker works in fixed assets at ClearWell Dynamics in San Antonio, teaches economics at Northwest Vista College, is the policy director and editor at InfuseSA, and is a board member for the Institute for Objective Policy Assessment. He can be reached via email or Facebook.