Are property taxes the best way to pay for local services?

Local governments will begin holding hearings this week to give the public a chance to speak up about planned increases in property taxes. The increases reflect a shift away from state aid that formerly helped pay for local services. Today’s Question: Are property taxes the best way to pay for local services?

  • Clark

    Yes, local users should pay for local services used, otherwise there is no accountability. If someone else is always paying the bill, who cares about the cost. If cities are filled with freeloaders, and therefore have fewer services, time to make tough decisions just like most families and businesses do everyday.

  • Sal E

    Yes, for those services that are controlled by the local governments (in addition to the state, we have counties, townships, cities and school districts). The problems arise when the state is allowed to dictate a level of service but does not provide an equitable way of raising money to pay for those required services. Remember, there are large swaths of Minnesota that are sparsely populated by primarily low-income households.

    Yes, yes, because once the tax money flows to the state capitol it is difficult to pry it out of the hands of the metropolitan area legislators. For example, there are miles upon miles of unsafe, bone-jarring highways in the corners of the state that would not be tolerated in the metro area. There are school districts making do with outmoded materials and old facilities. (The main school building at Murray County Central is the same one I attended when I graduated in 1964 and was fairly new when my father graduated from there in 1925.) There are more social service needs in outstate Minnesota because the population tends to be older and poorer.

  • Duane

    I can support asking the local users to pay for the local services as long as the tax base if fair; however, I live in a rural community, on a five acre farmstead. The tax base to support the operating expenses of the local school is the house, garage and one acre land. This means I pay the same tax to support the operating expense of the school as my next door neighbor with a section of land worth over $4000 per acre and a Million dollers of improvements. I am beginning to see some purpose in the OWS protests.

  • James

    Entire text book have been written on this subject. It is an impossibly complicated subject and not well served by “off-the cuff” remarks.

    First off what is a local service?

    – plowing local roads? Yes

    – cutting grass in local parks? Yes

    – maintaining the highway that passes through town that is heavily used by people “passing through?” Maybe

    – K-12 education that has to meet state and federally mandated standards? Maybe

    – etc.

    One quick comment, is that basing local taxes on property values is a peculiar choice.

    Why not:

    – based on household income?

    – based on number of people in the household?

    – the width of your lot?

    The fact that local tax collections vary with real estate market conditions is actually quite silly. We’re just used to the notion.

  • Hugo

    The source of funding, at least to a level of an adequate education for all students, should be public. The cost of properly educating students from disadvantaged backgrounds is higher than for other students. There should be some redistribution inherent in the funding of public education, even if market-based elements are introduced.

  • Emery

    Projected cuts will bring forward some deeper questions about school finance. As it is, Minnesotans already pay for public schools by virtue of where they live; schools are partly funded by property taxes. The richer the parents, the better the schools, or at least better resourced. That is a fundamental inequity of the American system, not a new one.

    A broader question is whether money is the best way to improve schools.

  • Steve the Cynic

    The post by James at 6:11am is correct. This question is too complicated for this forum to address. One thing I will say, though: The quality of public education should not depend on the wealth status of the neighborhood the school sits in, unless the goal is to entrench the wealth disaprity by keeping poor kids poor and giving rich kids an educational advantage.

  • Chris Oinonen Ehren

    As a parent in a high property tax area with very good schools, I am content to pay what I pay, but I am concerned about senior citizens. I don’t think the elderly should be driven out of their homes by property taxes. It seems like the value of someone’s home isn’t a good way to decide how much tax they can pay, considering the value of someone’s home can go up so drastically independent of their ability to pay – a person can become retired, widowed, have health issues all just while their home becomes greatly more valuable. I would like to see our tax burdens pinned to something that more accurately indicates our ability to pay.

  • david

    This is another gift left to us from the baby boomers. Their flight to the suburbs and subsequent urban sprawl is incredibly unsustainable. Sprawl is expensive and if property taxes were actually set from the get go to pay for it without deficits it would have been naturally reigned in. Instead the suburbs have become a fool’s paradise. There’s too many small towns on life support that will eventually just have to be let die a natural death too. Freedom has it’s price.

  • GregX

    The current system is so entrenched for the simple reason – other methods didn’t work. Creativity has never been in short supply – a lot of stuff has been tried.

  • CarlS

    The question has an irrelevant feel. The government is going to get their taxes one way or another. Whether money for services comes from property ownership, the state, wherever, they’ll designate a revenue stream and find a source. Ultimately it all comes from our pockets.

    Property tax is very regressive. It is a carryover from when property was used to generate income, i.e. agriculture. When home ownership solely for the purpose of having a place to live grew the revenue demand just never went away.

  • Joshua Northey

    Property Taxes are a perfectly sensible way of raising funds to pay for services which predominantly benefit property owners in that jurisdiction.

    For services which have a more broad group of beneficiaries an income or sales tax is a better way to raise the revenue.

    Whenever possible you want to keep the beneficiaries of a service and the people paying for a service the same or you tend to get a lot of wasteful spending.

    Look at the St. Croix bridge project where all of MN is being asked to pay for something that benefits a few thousand people living in Wisconsin and some Stillwater business owners. If those people had to pay for it themselves they would never be interested.

  • LoieJ

    Local taxes help keep the local leaders accountable, but there are drawbacks. For example, if there are a lot of people without kids in the schools, they might not support the taxes for the schools. I think that there needs to be a combination of ways to pay for services. For example, there could be a certain percentage of our sales taxes that come back to the municipality where the taxes are collected. That way, people from the outlying areas who use the services of that town/city help pay for those services. Otherwise, people move out of the city limits, yet use the services of the city frequently.

  • Shane

    I don’t like property taxes and here’s why, it means you never really own your property. You can pay a mortgage off after 30 years and own the property free and clear, but if you stop paying your property taxes the government can come in and take your property away. So it’s like you never really own it. Everything should be paid for by a consumption tax.

  • Chuck

    Not entirely. Many “local” areas are sparsely populated and many of us want to get to those areas for hunting, fishing, camping, snow mobiling, etc. Those areas need roads, schools, hospitals, and emergency services for the resident population and the visitors.

    A combination of tax revenues from property, income, motor vehicle, gas, and sales taxes provided by local, county and state sources would help provide the services we all use and expect. Increasing usage fees (hunting and fishing licenses, for example) would also help.

  • Larry M.

    No, For a couple reasons. First it leads to greater disparity in educational opportunities between poorer and wealthier areas. Also I dislike how property taxes can drive senior citizens out of their home even when they have already paid off their mortgages. This trend of pushing everything down to the local level, mostly by republicans, is hurting the communities that need the most help.

  • John P II

    Seems like my property taxes are artificially low since I get assessed additional taxes whenever the city actually DOES something impacting my property, i.e new sewer and water pipes, new street, new sidewalk, etc.

    Infrastructure is apparently no longer covered by property taxes.

  • John Anderson

    State aid to local governments is the best way to pay for local services. Every Minnesotan needs ALL of the State to succeed. Those local governments that desire to provide services beyond that provided through State aid would be able to do so.

  • Mark G

    Local property taxes SHOULD be the best way, but there are many caveats to this. Property taxes vary in different parts of the state, the way they are calculated vary, the actual tax rate varies by municipality, and the costs of the actual goods and services provided vary for a number of reasons. Local government aid was developed to try to even things out just a bit, but under the current effort to drive these costs to the smallest local level, I would expect to see even wider variations in the cost, nature, and level of services available from place to place. The town where I live is contemplating a new water system and is already jacking up the water rates in order to sock away money for the project AND they have hit us with an 8% city tax increase on top of it. I am worried that this will mean that many residents will be forced to leave town because they won’t be able to afford to live here anymore. New people won’t come to town when they see how high the taxes and water rates are, and we’ll see further decreases in valuation because of all the empty, blighted houses. You can be sure, however, our property taxes won’t ever go down!

  • Michele

    Property taxes are regressive. All Minnesota communities need the resources to provide reasonable levels of services including fire, police, and quality schools, as well as administrative overhead.

    Given this, it seem a huge waste that internet sales are not taxed. They should be and the proceeds should be equitably distributed to local communities, where services are paid for and delivered.

  • Steve the Cynic

    I’ve got news for Shane: You never really own your property anyway, taxes or not. The instant you die, it belongs to someone else.

  • CF

    If the state reduces local aid to cities, (causing an increase in my property tax), does that mean I will pay less in State sales tax, State gas tax, State cigarette tax, State liquor tax, State income tax and a slew of State fees like license plate tabs?

    Don’t bet on it. This is a SPENDING problem – a revenue problem on ALL levels of gum’mint.

    TEA.

  • Steve the Cynic

    Want small gummint, CF? Move to Somalia and see how that suits you.

  • redsnapper74

    Hardly. It’s just another form of regressive taxation favored by Republicans. If Republicans favor it, you know it’s main beneficiaries are the wealthy and not the middle class. For example, I haven’t had a raise at work in 5 years. My last income change was a pay cut due to the economy. Yet, my property taxes continue to skyrocket. Now my wife and I are discussing selling our home of 20 years due to taxes alone. Also, keep in mind that only a portion of property taxes are for basic services such as infrastructure costs. Much of the cost is for law enforcement and especially human services which benefit all citizens, not just homeowners.

  • CF

    Want big gum’mint Steve, move to North Korea and see how THAT suits you.

    TEA

  • Steve the Cynic

    Exactly right, CF. That’s why both extremes are bad. If we become Somalia in order to avoid becoming North Korea (or vice versa), what do we gain? Extreme ideologues of any stripe are all wrong.