COMMENTARY: Cut Taxes to Reflect Lower Property Values


April 29, 2013

Ronald Reagan famously said, “Government is not the solution, government is the problem.”

A Cape Charles town employee told me last summer, “We don’t need anything except money.”

The thinking seemed to be: Money is supreme, run government like a business, we know more about it than you, don’t argue with us, we’re technocrats.

A few weeks ago, my wife and I bought a new fax/printer. It cost $125 and is better than the one we paid $400 for four years ago. Why? Because when there is competition, prices go down and quality goes up. That is the free market.

If the cost of a product is too high or the quality is too low, a consumer is free to buy somewhere else. Business responds by cutting costs and improving quality.

Not so with our Town government. It has a monopoly on service, and the Town Council year after year has allowed monopoly power on setting prices, i.e. tax revenues.

The taxpayer has no choice — pay the tax or face a penalty and a property lien.

This year the money numbers are indisputable. Real estate assessed values are down 20-38 percent, depending on the source of the estimate. Undeniably, the sale value of real estate in Cape Charles has declined from the last assessment five years earlier.

In real terms, many taxpayers have seen the market value of their investments evaporate, and some have lost their life savings.

But what is happening with the cost of local government? Has the Town reduced the burden of taxes in response to lower property values? No. All the Town taxpayers have gotten is a flaccid discussion of whether taxes will go up or stay the same. There has been no discussion of actually cutting tax rates, — of making choices that every homeowner and investor has to make, namely, how to do more with less. [Read more…]