Thursday, December 3, 2009

Those Pesky Averages

Imagine you're asked to put one finger in each of two substances whose average temperature is 52°. No problem, right? But what if one glass contains boiling water at 212° and one contains dry ice at -109°? Would you accept this as a fair request?

Averages can be misleading.

Not much different with property taxes after revaluations. Data often deals with averages. The RI law called "S3050" sets the annual limit for local tax levy increases. When it drops to 4% (in 2013) it means that the when all the taxes of all the property owners are combined, the average increase will be 4%. Looks good - on paper.

The reality is that in town after town, despite the 4% limit, about a third of taxpayers get increases much above 4%, some as high as 100%, while others actually pay lower taxes. That's right, lower taxes, even as the tax levy just increased. In reality there are two kinds of taxpayers: those who pay too much and those who pay too little.

Until this unjust distribution of the local tax burden is acknowledged and fixed, all the posturing, the complaining about assessments, about the 'greedy' public employee unions, about graft and corruption, will produce little relief for those who have to pay the bills based on market values.

We must convince our legislators to discuss a new paradigm, where taxes for existing property owners are based on a system of "taxable" values producing tax bills directly related to budgets instead of the marketplace, where new owners will receive their first tax bill based on the market value of their purchase, instead of after a two year wait for revaluation, and where the limits on tax levy increases will apply to individual tax bills as well.

Please visit for an in depth discussion on this most important issue. Please talk to your legislators and ask that they at least think about this proposal. If you do, they might listen and we can get fair and just property taxes, at last.