Thursday, May 25, 2006

Recall. A Serious Matter

The democratic process includes election of individuals to office by a majority vote of the people. In the event that the people become dissatisfied with the performance of those they elect they can remove them at the next election.

But what happens if the people believe that the elected officers are simply unable to perform the duties for which they were elected and that waiting for the next election could cause irreparable damage to the public good?

Is there another option? Recall. An election held to remove someone from office. It is an awesome responsibility to overturn a vote of the people in a second election when it is possible that the majority might be a very small number, far less than the number of people of who voted for the candidate the first time.

The Charter Review Commission is considering a recall provision for the North Kingstown, RI Town Charter. They have presented two drafts of a proposal and have invited the public to speak their minds on the issue. It is an excellent process with everyone being given adequate time to speak and the commissioners listen. The next meeting is on Wednesday, June 7.

The proposal currently has three requirements.

1. How to get a petition started.
2. How many petition signatures will be required to place the question before the people in a referendum election.
3. How many people should have to vote in the referendum for it to be considered a valid election?

It is generally agreed that the bar needs to be set reasonably high to avoid frivolous petitions and expensive elections at the whim of a few discontented voters.

On the other hand it should not be so high that it is nearly impossible to mount a successful petition drive and achieve the desired result.

For the first requirement the commission proposes that 50 valid signatures from registered voters be obtained to be eligible to receive petition papers.

For the second requirement there needs to be a number of petition signatures equal to 20% of the number who voted in the most recent general election.

And third, for the measure to be successful there needs to be a simple majority and the total votes cast must be at least 40% of the qualified voters in the last general election.

I have come to the conclusion that the third provision should be eliminated thus rendering the referendum the same as for any election - a majority of the votes cast regardless of how many people vote. Since there is a danger that a relatively small number of people can overturn a prior election there must be built-in protections.

I believe the best protection is to make the second hurdle significant. In order to place a question on the ballot the petitioner(s) must gather a number of signatures equal to 25% of the votes cast in the prior non-presidential election.

The Charter Review Commission might modify the percentage to reflect their best opinions and the link to elections might be altered to include an average of several prior elections. There is no universally agreed upon best answer.

The next draft will reflect the collective wisdom of the commission.

We look forward to the people receiving the ability to rectify their mistake in a fair and democratic fashion. This is a good thing.

Thursday, May 4, 2006

Our Dirty Little Secret

The 5.5% tax cap myth - our dirty little secret

False Advertising
Any advertising which is misleading in any material respect is considered to be false advertising.

In 1986, RI Gen. Law § 44-5-2 was passed apparently to limit local tax increases to 5.5%. This law clearly qualifies under the definition of false advertising. Let me explain how.

We assume that the 5.5% limit means that taxes won't go up more than 5.5%. But that 5.5% limit is very misleading.

You see, the 5.5% limit can be applied to either the tax levy, in which case there would indeed be a true limit of 5.5%, but it also can be applied to the tax rate, at the discretion of the town, and this is where deception comes in.

First, a short refresher in fractions, ugh! Sorry, but it will I'll try to make it painless, I promise.

First, remember that if the top number of a fraction increases the same as the bottom number, the value remains the same. For example, multiplying both top and bottom numbers by 2 gives the same fraction: 1/2 = 2/4 = 50/100 etc.

The decimal equivalent of any fraction is determined by dividing the top number by the bottom number and in this example is 50%.

A tax rate is a basically a fraction; the top number is the tax levy and the bottom number is the value of the taxable property. Converting this fraction to a decimal is done the same as any fraction; divide the top number by the bottom number.

We express tax rates as dollars per thousand instead of percentages so the conversion is modified slightly but the bottom line is that a tax rate of $25 per thousand is the exactly same as 2.5%. Both will produce the same tax bill on a $100,000 property, $2,500.

With me so far?

Now for the shenanigans. Just remember that a tax rate is a number derived from a fraction - Levy ÷ Value.

Let's say a revaluation increases a town's total value by 25%. (The bottom number in the fraction).

If the levy (the top number) also increases by 25%, the tax rate will remain unchanged! In any fraction, if both the top and bottom number increase by the same proportion, the result remains unchanged - remember our fractions lesson?

If this town chose to apply the 5.5% limit to the tax rate it would satisfy the law, since the increase in the tax rate, zero increase in our example, would clearly be below 5.5%. And yet taxpayers would be paying 25% more in total property taxes!.

Clearly the law is at least a deception if not an outright scam. It's a shameful loophole and should be plugged immediately.

An ambiguity or unintended omission in a law, rule, regulation, or contract which allows a party to circumvent the intent of the text and avoid its obligations under certain circumstances.

The legislature owes it to us to fix this now.