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Letters to the Editor
In a recent editorial published by Lee Chowaniec, he supported assessing properties based on 100% market value based on recorded home sales, a designed model considering numerous variables and house type comparables. He thought the Lancaster’s Town Assessor’s process fair asked for opinions on what other process could be fairer. The following is my opinion.
Governments need money to operate, that’s accepted. Distributing the costs fairly and equitably across their citizens is the challenge. Federal and State Governments need dollars so they get the dollars they need from a portion of the dollars of their citizens’ income. They share “dollars” – on the basis that the citizen’s taxable dollars are a direct indicator of his or her ability to contribute to the cost of government.
The Lancaster Town Assessor declares his primary concern is fairness; where every property owner pays his or her fair share based on 100% market value.
However, there is no longer the same correlation between a person’s home and his financial status that existed in years long past when governments began taxing real property. Before there was an income tax, property ownership was the most obvious and reasonable measure of a citizen’s wealth and means to support his government.
A person’s home may be a reasonable measure of his income when he is in the prime years of his working career. That changes drastically after retirement and the combined effect of a fixed income and inflation. The home no longer represents ability to meet a tax obligation based on an assessor’s opinion of it’s’ market value - which may be multiples above the owner’s original cost. At the same time the owner’s purchasing power of his fixed income is reduced by the same inflation. Clearly this process is unfair!
With today’s information technology and readily available data bases it would be relatively easy to base all taxes on income... Why should the value of one’s property be based on an assessor’s opinion? It does not cost the government any more to service a million dollar home than a $50,000 home.
The necessary income data already exists in the files of the IRS. For any taxing jurisdiction, say a town, the total income for all entities (individuals, retail, commercial, industrial, etc.) provides the tax base (equivalent to the current total taxable property base).
Each one’s tax is then the ratio of one’s income divided by the total income times the budget. Computing tax bills will be much simpler. No one can manipulate the "tax rate” for political purposes.
Using a property owner’s federally documented income would be a much fairer measure of his dutiful share of the cost of local government than real property taxation based on someone’s guess of market value.
Frequently there is a considerable gap between the estimated property value and the available dollars government infers from that estimated value. This is particularly true for citizens who have lived in their homes for decades during which their income becomes limited but then further eroded by an inflation of both their living costs and the value of their home as perceived by a stranger, the assessor!
In 2005 the disparity in what commercial properties paid in taxes was evidenced by Lancaster Industrial Development Agency (LIDA) Payment in Lieu of Taxes (PILOTS) tax breaks. LIDA properties already have “tax-incentive” PILOT agreements that produce significant tax savings for them.
Incredibly, in the case of 38 Lancaster Industrial Development Agency (LIDA) properties, the assessed value was reduced for 37 properties and one was left unchanged. Not one LIDA property was increased – after 15 years of inflation!
As a result, the property at 6615 Transit Road (Salvatore’s) pays only 28.7% of its’ 2004 share of Town Government and 4201 Walden Avenue (American Sales) pays only 27.55% of its’ former share. The net tax savings on these two properties amounted to $512,000.00 per year at the 2005 rate and proportionately more in later years. All other Lancaster taxpayers must replace their savings!
A residential property on Court Street which sold for $104,000 in July of 2004 was increased to $157,700, a 52% increase in 8 months!
A residential property on Woodlawn Avenue which sold for $117,000 in May of 2004 was increased to $145,600, a 24% increase in 9 months!
A residential property on Rollingwood Court which sold for $129,500 in February of 2004 was increased to $143,000 one month later. A 10% increase in one month!
The only true market value is the one at such time a property sells. Any other is at best someone’s subjective opinion, regardless of that someone’s experience and training.
Coming to the present, does it make any sense for ANYONE to even consider a real property revaluation at this particular moment in time when the entire United States real estate and mortgage market is in a turmoil unprecedented in history!
Jack Beilman (Last President of former Lancaster Taxpayers Association)
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