Waldo Jaquith

Waldo:

The Roanoke Times recommended a vote against the first two amendments. Their reasons, amplified somewhat by me, are as follows:

The first proposed amendment seems like it is just a “local option,” Dillon Rule no-brainer. But when you compare it to the present provision in the Constitution, what it is in effect doing is allowing a locality to STOP means-testing its tax relief to the elderly. Note that it says that the change would amend the Constitution to “PERMIT” the locality to use a means test, so that only the poor would receive the tax break. But the present state of the law REQUIRES means testing for this tax break for the elderly. Under the Constitution now, localities already may grant exemptions from property taxes to residents 65 years old or older and to residents permanently and totally disabled. But that tax break can only be given to people who have “an extraordinary tax burden on said property in relation to their income and financial worth.” In other words, there is a means test — only people below a certain income or net worth threshold can get the discount.

This change would go from a situation where the tax break MUST be based on need, to a situation where the locality could decide to grant the exemption to all elderly, regardless of need. I’ll be reaching the 65-year-old threshold sooner than you will, but that is one tax break that I really don’t think I deserve.

When we give a tax break to anyone, that increases the burden on everyone else. I don’t mind taking up the burden to help poor folks, but I DO mind taking on an additional burden to help people who don’t need the help. My neighbor the retired doctor doesn’t need the break, and it would really chafe me to be paying higher property taxes to make up for giving him a break.

Likewise, the “disabled vet” exemption has no means test. Tax relief shouldn’t be a political football to be thrown to whoever we like at the moment; to the extent that taxes are not evenly applied, it breeds resentment. If a disabled vet is a very successful investor, or is married to a person who is successful in his or her career, there would be no need for this tax relief.

As for the last one, 10% of the income and sales tax revenues has recently amounted to about $1.3 billion. 15% would take it to $2 billion. We have seen shortfalls in recent years of $6 billion, as budgets have increased. Of course, the real problem here is that the state budget includes a lot of revenues from other sources — deed taxes, for just one example. So when the real estate boom became a bust a couple of years ago, the amount of revenue from deed taxes declined sharply. When the rainy day fund is tied in its size to sales and income tax revenues, and when those revenues decline as a relative share of the budget, the rainy day fund becomes less of a “rainy day” fund and more of a “brief shower” fund. It is of less value at the moment than when it was established in the 1990′s. Hence the desire to increase it.

Posted by cvllelaw on 27 October 2010 @ 11pm

FWIW, cvllelaw, I’m actually OK with giving localities the power to enact a non-means-tested tax break. I think it’s foolish, I don’t think that any localities should take up the state on it, but I think that they should have the right to do so.

(I’m feeling a bit like the People’s Front of Judea right now…)

Posted by Waldo Jaquith on 28 October 2010 @ 8am

Just when I thought I had this election thing all figured out…

#1. I thought I was a no, but now I’m undecided.
Generally, I’m all for lowering taxes, but in this case, I don’t know if doing away with the means requirement is a good call. I have to think more on this one.

#2. I think I’m a yes.
The number of veterans who have a “100 percent service-connected, permanent, and total disability” and would qualify for this is really low (in my mind negating the “overburdening others” argument outlined by cvllelaw), and I’m generally in favor of helping out our veterans (and their families), especially those who have been disabled as a result of serving our country.

#3. I guess I’m a no.
In times of economic downturn, I feel that the government should also tighten its belt, so to speak. Budget projections shouldn’t really be off by more than 10% anyway. Ideologically, I don’t think that the government should stow away more of our money than is absolutely necessary. Giving them an additional 5% allows the government the ability to be off by an additional 5% without consequence.

That said, I really have strong views on any of the three and am off to do more research. :-)

Posted by Michael on 28 October 2010 @ 12pm

*”don’t really have”

Posted by Michael on 28 October 2010 @ 12pm

#2 makes me pretty uneasy without more information available. What qualifies as a “total” disability? Loss of the use of all four limbs? Or does total blindness count? What about legal blindness — if I can’t drive or read but I can detect light and color, that’s not total blindness. Do I still get an exemption? Also, precisely how many people are we talking about here? And at least as importantly, how are they distributed throughout the Commonwealth? Is this a state-wide feel-good constitutional amendment that actually only affects a handful of cities with military bases, VA hospitals and large veteran populations? Is this the ballot-box equivalent of Danville slapping a yellow-ribbon bumper sticker on their car while Norfolk and Hampton are left to do the heavy lifting?

What’s the process for qualifying a veteran for the exemption? How do we handle the applications of veterans from earlier wars (from as far back as Vietnam, Korea or even WWII) who may not have the requisite proof that their disabilities are “100% service connected?” And how do we define “permanent?” If there’s a possibility that some forms of therapy might work over time — but then again, they might not — does the veteran get an exemption?

Posted by Sam on 28 October 2010 @ 1pm

Michael and Sam, I think that both of you raised an important question about #2 that should really be asked way more often about a lot of bills: How many people are we talking about here? I’d love to get the answer to that.

Posted by Waldo Jaquith on 28 October 2010 @ 1pm

Sens Barker and Puller:

There are slightly over 7,000 100 percent disabled veterans in the Commonwealth according to the Virginia Department of Veterans Services. This has been one of the top initiatives of the Joint Leadership Council of Veterans Service organization for several years. Passing this Constitutional Amendment could be of assistance to those who have served in our Military Services and helped protect our freedoms.

http://www.senatorbarker.com/

So, 7000? If they all own homes that would qualify.

Posted by Michael on 28 October 2010 @ 2pm

Wow, 7,000—that’s quite a few more than I expected. I’m not really sure how that affects my thinking. With a homeownership rate of 67%, we can figure that’s approximately 4,700 homes. (That estimate makes oodles of assumptions, but whatever.) If the average assessment is $150k, and the average tax rate is $0.80 (and I totally invented those two numbers), then that’s $5.64M in tax revenue lost to localities. Fairfax, with 13% of the state’s population, would lose $726,000 annually. On the other hand, little ol’ Bedford, VA would lose $48,000 annually. Again, lots of assumptions here, but you get the idea.

Thanks so much for tracking that down, Michael.

Posted by Waldo Jaquith on 28 October 2010 @ 3pm

They’ll all pass.

Posted by I.Publius on 28 October 2010 @ 5pm

Thanks for posting this.

Posted by Brian on 28 October 2010 @ 7pm

Increasing the rainy day fund will only encourage spineless Richmond legislators to pander to the anti-tax, something-for-nothing crowd and draw down the savings. No.

Kill the Dillon Rule, don’t wing it.

Posted by Bubby Hussein, Hillbilly Sheikh on 29 October 2010 @ 3pm