TAX SHELL GAME

STOP THE CITY PROPERTY TAX SHELL GAME

We Are Unwilling Players In Their Game

When the City Staff and the City Council were working to establish a Budget for the 2016-17 Fiscal Year and set the Tax Rate, one would have been reminded of the old Carnival Shell Game of days gone by. “Move things around quickly in such a manner that the patsy gets confused and loses track of which shell has the pebble under it.” It was another version of “Bait and Switch”

This is a budget/tax year when several City Council members are up for re-election so it was desirable for the citizens to be thinking that the Council was working hard and making sacrifices to help them with their Property Taxes. “Let’s give them a tax cut!” “Let’s cut their City Tax Rate by a penny!” (FYI, if the average home is valued at $240,000 a penny difference in the tax rate amounts to $24/year.)

groupSo a penny cut in the rate was put under the shell. The game begins and the misdirection starts. Staff proposed a budget that provided the penny cut but left out several critical line items, such as 12 additional Police Officers and Personnel that were critically needed among a list of other vital services. “It would be absolutely impossible to provide these items AND give the citizens the penny reduction in the Property Tax rate,” we were told.

More misdirection came when the Council instructed the City Manager to go back and sharpen his pencil and find a way to provide the penny reduction AND fund the needed Police Officers and the other items.

But then comes the Big Reveal… or at least it was what was intended. Twelve short days later, the City Manager presents a revised budget to the Council that provided the penny rate reduction plus the funding for the Police Officers, the Parks, the Infrastructure Personnel, and the other items. Suddenly the impossible became the possible! Little explanation was given about which Budget line items got squeezed to provide the additional money needed.

On the cover sheet of the revised Budget, there is a statement, which is required by law, which says, “This budget will raise more total property taxes than last year’s budget by $11,577,061 or 7.57%, and of that amount $3,367,675 is tax revenue to be raised from new property added to the tax roll this year.” This is the real shell game.

How does a penny rate reduction produce a 7.57% revenue increase? Not here-to-fore mentioned, the reduced tax rate is applied to the substantially increased Property Values that were set by the Central Appraisal District (which could be the subject of a whole different article). So even though the Tax Rate went down a penny, property values increased enough to raise our tax revenue nearly $11.6 million. If you will look at your tax bill from 2015, you will likely notice that you are paying more City Tax in 2016 than you did in 2015. Property values increased enough to gobble up your penny reduction and raise your tax bill.

You might also note that the Budget/Tax Rate very carefully stays close to the 8% Rollback Rate that would trigger a citizen referendum on the Tax Rate where Plano taxpayers could vote to reduce the Tax Rate a lot more than one penny. This was actually discussed in the Council Meeting. They don’t mind taking more of your money and making you a little unhappy, as long as they don’t make you angry enough to trigger a Rollback election.

What Else Do We Learn?

This past year gives us an excellent example of how the tax system works because there was such a dramatic real increase in the value of property in Plano. There is no question that we have experienced a dramatic and sudden increase in the growth of Plano. Real Property Values have jumped significantly. Conservatively, we have seen a 10% increase in the value of our property. There are more people interested in buying our homes.

But if the new 2016-17 Budget is any indication, the tax revenue needs of the City have magically increased by the same amount. If we accepted our City Manager’s initial claim, the City’s need increased to the point that they could not even cover those last few desperately needed Police Officers because Council wanted to give that pesky penny tax rate reduction back to the citizens.

Could it be that the Staff was so focused on how much Tax Revenue it could extract from the citizens that it lost sight of how much Revenue was actually needed to take care of the City’s Business?

I submit that we are not being taxed on the basis of what we actually need for Plano government. We are being taxed on the basis of how much the City can legally take from us. Furthermore, the City Manager is willing to threaten cuts to vital, core functions, such as public safety (police and firefighters) rather than give up a penny of additional tax revenue.

The Consequences of the Game

So the citizens of Plano continue to pay ever-increasing taxes, year after year. They accept it because it has always been that way or because it is “only a small increase.” But there are those that cannot absorb these continual increases, year after year. There are people among us that are being taxed out of their homes. Yes, right here in affluent Plano, Texas. There are people losing their homes because they can no longer pay their property taxes. Regardless of the amount, it is our money, not the City of Plano’s money, and the city should focus on its core functions, public safety and public services and stay out of the taxpayer’s pockets.

I do not want to play their game anymore. I want to see Plano run on a fiscally sound basis and ask the citizens to pay, through taxes, those expenses that are a legitimate function of local government. I do not want the citizens to be taxed $1 more than is needed to properly run this city.