Rubes in the City

If you want to really, truly understand how city residents find themselves with high taxes, low home appreciation, lack of development and ever dwindling public services, you need to read the article Thane and Barone debate water rate increase vs fund balance depletion.

Here are the main takeaways from article:

— We need to literally deplete the city’s fund balance so as not to pass rate increases to the towns. That’s interesting: our Council members prefer to penalize city taxpayers so as not to upset the town supervisors or town tax payers, Really?! Apparently the mantra of “protecting taxpayers” applies to the towns, not the city.

— We need to promote growth in the town with lower water rates as we will get more than enough in sales tax revenue to make up for it. This is kind of like pitching in with your buddies for a lobster bake and they get the lobster tails, while you get the claws, and the smaller ones at that. Think of it this way: the town gets a development of let’s say $500K for a retail store. The town then not only gets sales tax revenue from the retail operation but , more importantly, now adds $500K to the total assessment of the town tax rolls. It’s the $500K that matters most as that will help lower everyone’s tax rate. Meanwhile, in the city, we only get a fraction of the sales tax revenue and zero impact on our total assessments. As I’ve stated over and over, it’s this lack of development and associated bump to the total assessed values in the city that makes our taxes high. Getting sales tax revenue in lieu of development is a fatal policy error compounding decade after decade.

— Returning to the desire to deplete the city’s fund balance , I am at a bit of a loss as to how that works. According to our pundit class and Council members, the city’s finances are totally underwater to the point that the city is not viable financially. Remember how they clamored to dissolve the city and to wail and gnash at the unknown state of city finances and their stated claim that the fund balance is actually negative. Well then, exactly how do we reconcile a financial situation so dire with zero fund balance to using that zero/negative fund balance to offset water rate increases to the towns? You can’t.

Well, actually, if you are a Republican COuncil member, you can believe in your ideological wizardry of supply side economics which states that you can always lower taxes regardless of the underlying financials or economics of the situation.

If the above does not make city taxpayers the rubes vis-a-vis the town, I don’t know what does.

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