NK, RI Town Council Meeting Dec. 11, 2006

Impressions from a citizen:

The new council got off to a good start, I think. The routine of running a meeting was understandably a tad shaky but will get smoother as time goes on. The mood was cooperative and respectful, a very good sign.

The first item on the agenda was an introduction of all the department heads to the council for the benefit of the new members. Maybe there'll be a test next week to see if they remember all their names?

There weren't any fireworks until a request to alter wetlands was before the council. It seems that because a lawyer didn't file a paper in a timely manner that DEM might consider a developer's request to encroach on wetlands to gain greater access to a house lot.

Not one person that spoke before the council was in favor of granting the exemption. The applicant wasn't there.

The council options are: a) lodge a protest or b) veto the request.

The problem is that should a veto be overturned, the town could be on the hook for damages the applicant might demand. The council opted to register a protest and not exercise a veto. Not an easy call for the town but the consensus was that strong town objections were usually upheld by DEM.

There was a discussion about the new tax levy limits, heading down in little increments from 5.5% to 4%. This year it will be 5.25%. The council talked about its own limits which could be even lower than the state's. A limit is just that, a limit; it's not a goal and I didn't see the point of saying that the council might want to spend less than the 5.25% increase. I take it for granted that the council will always try to spend as little as it can for necessary services, not up to a limit. Isn't that the idea of zero based budgeting?

Then came the item about the Elderly Tax Exemption. It makes sense that any exemption takes into account inflationary pressures on values and adjusts the limits of the exemption accordingly. My objection is with the whole idea of elderly exemptions at all.

Exemptions are given presumably on the basis of need. Income is measured as a percentage of the poverty level and the exemption is granted accordingly. Seems to me that a young family who finds that they can no longer afford their taxes on inflated property values are just as worthy of help as older people who find themselves in that position.

Exemptions such as this are a testimony to the need for true RE-FORM of the way we tax property to pay for local government services.

All in all a good meeting and I am very optimistic about the new council.

But maybe it's just me.

Property Taxes. Deal or No Deal?

On the popular TV game show, Deal or No Deal, host Howie Mandel asks the contestant a very important question, "Deal or No Deal?"

The contestant must choose between taking an unknown amount of money in his or her suitcase, or a known amount of money offered by the 'banker'.

What does this have to do with property taxes?

Taxes pay for government. Whether federal, state or local government, we pay for them all with our taxes.

For local government we have been taxing property for centuries. Long before the Industrial Revolution, long before there was a United States, we taxed property. The value in those earlier times was determined by the revenue produced by the property - more revenue, more value, more taxes. In fact one could say that the property tax in those early days was really an income tax.

Things are very different today. The market place determines the value of property. People who own property of equal value must pay equal taxes. No matter how wealthy they are, no matter when they purchased the property, the taxes will be equal if properties are of equal value. (To insure that new owners don't pay unfairly low taxes based on previous values we revalue property every three years.)

Most of us accept that this is a fair way to distribute taxes among tax payers as long as assessments are accurate and up to date. If it's fair, it begs the question:

Would you choose to pay your state or federal taxes based on the value of your house? "Deal or No Deal?"

"Hold on" you say, "no way. Pay state taxes on my revalued property? It wouldn't be fair!".

If it's not fair to pay state taxes that way, what makes it fair to pay for local government that way?

It isn't fair, at least not the way we do it today. Revaluations are indeed necessary to insure that new owners pay their fair share but those revaluations make it harder to hold on to a home, even forcing some existing owners to sell.

Maybe we should do away with property taxes altogether and have a local income tax.

Income taxes would be much more fair than property taxes. But they have serious drawback; they're very unreliable.

Today, when a town sets a tax rate, it is guranteed to produce the revenue required by the tax levy. This is a good thing, and very important for prudent management of our towns and cities.

On the other hand, if towns depended on income tax and sales tax revenues, and the economy stumbles, towns would face the same problems that the state currently faces, deficits and expensive borrowing. Clearly not a good thing.

The challenge is to retain the benefit of taxing property and, at the same time, discard the unfair treatment of our existing long time owners who are forced to pay taxes on homes they could never afford to buy at present day prices, while still assuring that new owners pay their fair share.

It can be done. We have just such a proposal on our web site at R.I.G.H.T.

I welcome your comments.

NK Town Council Meeting

November 20, 2006

First post-election Town Council meeting was about the shortest meeting in recent memory. It took almost as long to recite the Pledge of allegiance as it took to dispatch the agenda items. Way to go!

The interim manager, Cindy Olibri, mentioned in her report that the food bank is really low and in dire need of canned goods and non-perishable items. Sure hope that the shelves are filled soon. Donations are more than welcome.

The new Council will be sworn in next meeting at 7:00 to allow some extra time.

The recommendations for the new audit committee will be presented to the TC the following week, December 11.

During the public comments section a resident spoke of his concern for Quonset's plans for the new Gateway Project. He was very unhappy with the prospect of huge mega-stores as the main features of the project. It sure would change the character of North Kingstown and something on a smaller scale such as the Garden City mall would be more in keeping with the quality of life her in NK. I see much merit in his position. President Miccolis assured him that several councilors shared his view and they would try to maintain the more rural nature of the town.

See you next week.

Cure The Cancer of Terrorism

It seems clear to most people by now that our administration's policy to defeat terrorism has not had the desired outcome. As I write this, terrorism, sympathies for fanatic fundamentalism, deaths in the mideast are all on the rise. We haven't had another attack in the US yet but no one believes we are immune to one, that we are really safer today.

Administration policy is based essentially on an attitude that the only thing terrorists understand is brute force and they must learn that America won't stop until they change or they are all dead. Unfortunately, our efforts likely have created more terrorists. It sounds to me a lot like a failed treatment for cancer.

As we all know, cancer is a tumor that can grow uncontrollably, can invade surrounding tissue, and can spread to healthy parts of the body. Left untreated it will ultimately kill. We acknowledge that the best solution is prevention, but once discovered, what is the best way to treat it?

There are many kinds of cancer and good doctors understand that the best treatment must be tailored to the specific tumor. Terrorism is like a tumor with poorly defined borders that has begun to spread and invade. Our leaders appear to believe they can cure any cancer by hunting down and cutting out all the cancer cells, like a surgeon run amok. Doctors know that this naive and simplistic approach would most likely spread the cancer even faster, not cure the patient.

For a patient to have a chance for survival, this cancer needs to be deprived of its blood supply, the nutrients on which it depends to grow and spread its death. The patient might undergo the partial removal of the most diseased tissue but if the blood supply to the tumor can be cut off, if the patient stops activities that encourage more cancer, such as smoking, toxic food etc. and works to rebuild the body's immune system, the chances for survival are vastly improved.

Terrorism's revenue source, its 'blood supply', arguably is oil. If we are serious about removing terrorism's malignant threat we must do the smart thing and cut off this revenue source. As we did in WWII, we will need to make sacrifices, we will have to endure limited supplies of oil and increased energy costs, we will have to conserve energy, and embark on a crash program to develop alternative fuels. With the right leadership, we can do it.

Our current leadership's suggested treatment? Ignore the 'cancer', don't let them think they've won, blow smoke in their face, go to the mall, shop.

What we need are leaders who learn from mistakes, leaders who can inspire, leaders who can think, leaders who can lead.

But maybe that's just me.

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.

Is There Global Warming? It's The Wrong Question.

There are four possible truths regarding global warming:

1. There currently is no global warming.
2. There currently is global warming.
3. People do affect global warming.
4. People don't affect global warming

and two possible actions:

A. We change our behavior
B. We don't change our behavior.

There are eight possible results.

Outcome 1-A. If there is no warming, behavioral changes make no impact and produce only this:
Lower consumption of fossil fuels, significant changes in daily life, new technology, development of mass transit, significant economic impact on energy producers and automobile makers, new emphasis on renewable energy resources, cleaner environment, lowered dependence on foreign oil etc.

Outcome 1-B. Nothing changes. Unless of course, we run out of fossil fuel and are unprepared for it.

Outcome 2-A. The same as 1-A but there would be a beneficial effect on global warming, though the results will take years to occur.

Outcome 2-B. The world continues to support economies dependent on oil revenue, we continue to promote environmental pollution and hasten the global damage resulting from greenhouse gases in the quest for cheap oil.

Outcome 3-A = 2-A
Outcome 3-B = 2-B
Outcome 4-A = 1-A
Outcome 4-B = 1-B

We should be talking about consequences of being wrong in our assumptions and how quickly and effectively we can remedy any damage caused by a wrong decision.

We will either have to rebuild an economy disrupted by a fear that never materialized or we will have to restore the climate and environmental damage (perhaps impossible by the time it's acknowledged) caused by the continued use of and exploration for fossil fuels.

It seems to me that being wrong about the environmental damage is a far greater disaster than if we are wrong about the economic consequences.

But maybe it's just me

"Without fair treatment from government, little else matters"

Which of the following would you choose?

1. Property taxes bills unrelated to town expenses. Budgets increase, yet about a third of property owners pay LOWER taxes.
2. Onerous tax increases force many long time homeowners to sell.
3. New owners taxed on market value of property are often shocked by tax increases after revaluations.
4. Expensive revaluations add to budget costs.

or

1. Property tax bills are directly related to budgets.
2. Tax burden increases are fairly and equitably shared by existing owners.
3. New owners taxed as above but become existing owners after purchase.
4. Lowered revaluation costs saves money for towns.

If both methods will produce the same revenue, which would you choose?

The first system is what we do today.

The second is what we propose at RIGHT.

Take your pick.

The RIGHT tool for the job

Please forgive this paraphrase an old expression, “If the only tool you have is a screwdriver then everything will get . . .”. Well you get the idea.

Our property tax problem is a little bit like that. It appears that the only tool or remedy anyone ever proposes to fix the most hated tax in America is to control or cut tax levies. Prop. 13 in California, Prop. 2 1/2 in Masachusetts, the proposed TEL here in Rhode Island, are all such examples.

At first glance it seems like a reasonable approach. After all, the reason we have a property tax in the first place is to help fund the tax levy, that portion of the municipal budget not covered by other revenue sources such as state reimbursement from income and sales taxes, parking tickets, fees, such as dog licenses etc.

Since we all share in the services provided by our towns, we should share in the tax levy needed to provide them. Thus the efforts to lower those total expenses would appear to be a rational and fair way to reduce the tax burdens on property owners. And it would be, if we each paid our fair share every year.

We used to many years ago. We paid taxes based on the value of our property. Then someone noticed that properties were increasing in value and people were buying homes at ever increasing prices yet paying taxes based on the older values.

The solution? Revaluation. This way, the people who were paying those high prices would be taxed on the fair market value of the houses they were buying.

But, we revalued everyone. That meant that there were lots and lots of people who found themselves living in homes that were getting more and more valuable. Their taxes were climbing faster than their incomes, faster than inflation, faster even than budgets.

Folks were finding it hard to keep their homes. Indivdual tax bills were being driven, not by the needs of towns, but the real estate market.

After a typical revaluation about two thirds of the people get huge tax increases but the remaining third were getting tax decreases! Clearly not everyone was paying their fair share.

And those decreases were going to primarily commercial owners whose property values weren’t rising as fast as the homeowners, so owners like Home Depot and Wal-Mart were getting large windfall reductions on the order of 15-25% while owners of the most modestly priced homes were getting increases of from 11-13%. These numbers are for North Kingstown after its last revaluation but are pretty typical. Not exactly a fair distribution, is it?

Any marketplace, no matter how well regulated, is at its core, a gamble. There is simply no justification for using marketplace gambling as a basis upon which to tax our citizens for the municipal services we receive.

Our website offers a different approach, another tool, to use in this battle against the most hated tax in America, the Property Tax.

Take a look and share your thoughts.

Click on RIGHT for the website.

Sex and Taxes

Property taxes are all over the news again, or more correctly, still. Everyone is trying to bring relief to the beleaguered property owner, as well they should. Our collective property taxes in Rhode Island are way too high.

The goal of the lawmaker is to receive credit for lowering those taxes while permitting towns to continue providing needed services. The one who does that will be hailed as a real hero and is assured a prominent place in the Legislators' Hall of Fame. It's 'sexy'.

Sad to say that the real answer is a very unsexy, practical, boring one. We need to make the distribution of property taxes fair before we make them lower. Any tax increase, no matter how small, will be unfair as long as there will be those who pay increases based on the increased market value of their property, which often is anything but small.

The market price of property is not unlike prices in any market, the stock market for example. It is what buyers are willing to pay and is simply a gamble. True, we expect the dice not to be loaded and the market value (assessment) to be honest and accurate. But why should gambling have anything to do with the taxes we pay simply to live in our communities?

Nothing. Not one thing.

But maybe that's just me.

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.