Thursday, July 13, 2006

Justice For All

Justice For All

The Pledge of Allegiance ends with those wonderful words and we know exactly what they mean. “All” means each and every one of us; not most of us, not most of the time, not the average. It means everyone.

Our Rhode Island Constitution proclaims that the “burdens of the state ought to be fairly distributed among its citizens.” Not most citizens, not the average citizen.

Are local taxes distributed fairly among all citizens, all the time?

Providence, 2004 - 57% of property owners got tax increases while 43% got decreases.
North Kingstown, 2001 - 61% paid more and 39% paid less.
West Warwick, 2004 - 73% got higher tax bills while 27% had lower tax bills.

While community expenses rise, large numbers of citizens pay lower taxes. Why?

In a word, Revaluations. In the years between revaluations, property owners pay taxes in direct proportion to the changes in the tax levies resulting from changing budgets. If a tax levy increases by a certain percent most tax payers’ bills increase by a similar percent.

This is a sensible process. But property values tend to increase over time. When new owners buy properties at higher and higher prices they might pay taxes inherited from the previous owner. This is highly unfair to existing owners. New owners buying the more expensive properties would not be paying taxes commensurate with their ability to pay as measured by the value of the homes they are buying.

The ‘solution’ has been to revalue. This results in more realistic and fair taxes for new owners, but unfortunately creates very unfair taxes for the majority of existing owners, as the distribution figures above suggest.

The truth is that after revaluation, most of your tax bill increase is used to pay for a decrease for someone else.

In our present (and ancient) system of tax distribution, a tax levy increase of 3% or 4% might be good for “all” but it certainly isn’t good for “every” taxpayer.

Maybe some are more “equal” than others. I sure hope not.

But maybe it's just me.

We have a proposal at R.I.G.H.T. that is fair to all and we mean everyone.