By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Wow. When did the whole topic of taxes turn into wild scary voodoo? Please. Taxes are numbers. Numbers are not snakes.
A majority of the Dallas City Council has already voted once in favor of raising the current property tax rate by 4.9 cents per $100 in the value of a property. Unless something weird happens, they will make it law this week.
That's not a tax increase.
Wait. Wait. This is only arithmetic. We can do this thing, if we don't panic.
The tax you pay is not a product of the rate, only. It's a product of the rate times the value of your property. The rates and the values can go up and down and still produce the same tax.
Maybe you've heard: Property values in Dallas have gone down. If the tax rate stayed the same, the taxes we paid would go down. The same rate would give us a tax cut, not the same taxes.
Every year by law, the city must publish what is called the "effective tax rate," which you and I might also call the "real tax rate." The effective rate is the rate that would keep taxes exactly the same citywide. The rate the majority on the council wants to impose is slightly less than the effective rate. That's a cut.
Maybe we should agree on what we mean by "taxes." I mean what you pay. The amount of the check. Sometimes it's called "city tax revenues," which is the amount that everybody pays—all our checks together. Whatever. It's the money.
This gets so weird. At one point during council debate on all this, council-member Jerry Allen called fellow council-members snake-oil salespersons for telling people that the rate they favor—the higher rate—is a tax cut by a little bit. I think Allen probably was sincere. He just couldn't feature how the rate could go up and the outcome could be slightly lower taxes.
Let's make it easy. If your house is worth $100,000 and the tax rate is 10 cents per hundred dollars in value, your tax bill is $100. Imagine that the value of your house falls to $50,000. But the tax rate gets jacked up to 15 cents. Now the tax bill is $75. The tax rate went up 50 percent, but you get to write a smaller check. I call that a tax cut.
What the minority on this council should do is spend some time in Montessori school. Then they would know that three-quarters of a small wooden block can fill up the same amount of space in a box as half of a bigger wooden block. And nobody's a communist or a satanist or anything. It's just blocks.
Mayor Tom Leppert sent a slick but strange mailer to my 101-year-old mother-in-law two weeks ago (but not to me at the same address). He urged her to send him a card telling him to "stand up for what is right and protect the best interest of taxpayers and our city's future by voting 'no' against a tax increase."
I didn't quite get the business about him telling her to tell him to vote against whatever. Maybe it's like, "Be sure to remind me so I won't forget." We have a lot of that around our house.
The fact is—and I speak from personal experience—if Tom Leppert and Jerry Allen were in Montessori school instead of City Hall, their argument against raising the tax rate would wind up with a parent-teacher conference. And I'm afraid we would be the parents.
We would all wind up squeezed into little-kid desks in the evening with Peruvian flute music in the background and the teacher telling us that "Little Tommy and little Jerry are having a lot of trouble with their volume works."
It's an important thing to get right, and please allow me to give you an example why. Tom Leppert, I am sure, will tell you that as mayor of Dallas he has kept the property tax flat. But as council member Angela Hunt has pointed out several times during this debate, Mr. Leppert actually was the cheerleader for a period of hefty tax hikes in Dallas, helped along by Allen, in his first two years in office.
The first budget process he presided over after his election in June of 2007 produced a tax increase of 7.61 percent for property owners in Dallas, according to the city's own budget data.
It happened because he encouraged the council to keep the rate the same in a year when the value of the tax base increased. Was that a simple mistake? Oh, no, it can't be a mistake, because by law the council is required to look at the effective rate—the rate that would have kept revenues flat. That would have been a lower rate.
The mayor and the council knew all of that. They had to. They knew that in order to keep total tax revenues flat they needed to lower the rate. But they didn't. They kept the rate flat, but because the block of wood was bigger, the same rate carved off a bigger volume of money for them.