How the Common Council and the School Board Consistently Mislead the Amsterdam Taxpayer By Demagoguing on Taxes But In Reality Fleecing Them Out of Tens of Thousands of Dollars in Home Values
As I read these articles in the Mohawk Valley Compass (Does council’s budget put us on same path county was on? , Auctioneer to city: buyers avoid sales with too many restrictions ) , I was struck by how utterly nonsensical the policies pursued by our Common Council continue to be in terms of the underlying economics when it comes to real estate development and the real estate market in the city. Coupled with the policy failures of the school board, it’s a formidable tag team pounding local homeowners to the mat with a ‘People’s elbow’ for good measure.
What fuels my ire on residential real estate is the convergence of poor, ineffectual policies relying on economic fallacies and then presented to taxpayers as ‘protecting taxpayers’ or some other such pablum. This is not ‘protecting taxpayers’ , it’s actually , well, let’s be polite, ‘hurting’ taxpayers.
While the Council decries the purchasers and investors of auction properties, the Council continues to ignore the root cause for these properties — the lack of investment in the city. While Council after Council appropriates (aka takes) ever more money from local taxpayers to knock buildings down unquestionably creating higher taxes on existing homeowners and then compound the problem by failing to enact policies that prevent properties from reaching the point of auction in the first place, the Council like previous Councils perpetuates an ever escalating rise in taxes. Tragically, this is considered ‘protecting taxpayers’ and even more tragically, this is actually accepted as a fact by many versus what it really is: a canard, a ruse, a fable, a work of fiction.
Here are the main points to consider if you still believe the Council and school board are ‘protecting taxpayers’ versus ‘hurting taxpayers’:
— The Council expects investors and purchasers of auction properties to be unimpeachable in terms of credit quality and guarantees to the city when assuming high risk ventures such as restoring dilapidated homes in a moribund real estate market. In other words, the council expects investors to assume all these risks while the city assumes zero risk. This is patently absurd. That is why LLCs were formed and why real estate investors create LLCs — to shield themselves from personal liability when assuming risky ventures. To believe otherwise is simply delusional.
— It’s a matter of public record that qualified, successful investors shy away from investing in the city given two facts: the city is a risky real estate market and many city leaders and public actively dismiss and disparage outside investment. You need look no further than how the Council and a large swath of the public treated the investors in Chalmers to see this. Let me state the obvious: the more successful developers look at the inherent risk of investing in the city coupled with the political theater facing any outside investor and simply, and rightly figure, “I’ll go elsewhere”.
— Like the recent Council confirmed with the threat to defund the only economic development agency in the city, the CED headed by Robert vonHasseln, the commitment to promote economic development here is simply non-existent. The notion that the city can be viable for economic development is dismissed and disparaged by this council, the school board and a wide swathe of the public. City taxpayers don’t get lower taxes from this failure to pursue economic development — they get higher taxes. Smart investors look for locales where development is encouraged and developed — the council pursues precisely the opposite approach.
— For all the talk of lowering taxes for taxpayers decade after decade by the usual chorus, it might be time to ask yourself if these decades worth of talk and demagoguery have in fact delivered lower taxes. The answer is clearly NO. So what makes these incessant claims of ‘protecting taxpayers’ today mean to taxes decades from now: that taxes will be higher not lower if we just look at the end-result of demagoguing.
— In terms of our school board and administration, they have proven themselves to be equally harmful to real estate values by simply adopting and embracing the lottery system for elementary schools as but one example. This means that when you buy a home here, you literally have no guarantee where your kids will go as a parent and a home buyer. This risk lowers property values from what they otherwise would be and clearly raise the effective tax rates as a result. Coupled with the school board’s past public statements of their unwillingness to engage in their role in economic development initiatives, taxes cannot help but rise. But of course, they also clamor for the mantle of ‘protecting taxpayers’ while doing nothing of the sort. Even worse, they wilt under any challenge to advocating for academics and learning for students from the ‘protect the taxpayer’ crowd.
— Finally, if this Council really fulfilled their commitment about protecting taxpayers at-large, you would see some meaningful reduction in property taxes. But guess what: taxpayers will not see that bottom line result. Do you know who the Council gave the biggest windfall in terms of ‘protecting taxpayers’? The answer is golfers with a 5% reduction in membership fees which translates into a minimum of $30 some dollars saved which I assure you is multiples of what the average taxpayer will see in tax reduction.
In the end, it’s pretty simple: “protecting taxpayers” is a talking point with no economic or fiscal policy behind it. Until the public wakes up to that fact, you can expect this public work of fiction to continue.