Saturday, May 11, 2019

Takoma Park tax increases are not as steep as you may think

[Edited: I corrected my calculation, replaced some figures with more accurate figures I found after I first posted, and clarified the conclusion.]

One of my neighbors posted text including the following to my neighborhood e-mail list:
"Takoma Park resident and financial management consultant David Navari made a presentation about the city’s budget, based on months of analysis and meetings with city officials. He noted that the tax burden is heavily carried by residences... [and] that our tax burden has gone up 25% in eight years."
The statement that "our tax burden has gone up 25% in eight years" seems deceptive.

As a 2011-5 member of the city council, I spent a lot of time looking at the city budget, and I voted on the FY13 to FY16 city budgets. I'll break out some figures.

Here are audited real property tax figures for the last nine years, FY11 to FY19 --

FY11 -- $10,858,055
FY12 -- $11,237,329
FY13 -- $11,496,733
FY14 -- $10,974,639
FY15 -- $11,144,083
FY16 -- $11,516,876
FY17 -- $11,998,604
FY18 -- $12,094,212
FY19 -- $12,652,357 (estimated)

So real property taxes went up 16.5% in the eight years to the current year, FY19. (They went up 2.5% in my four years on the council, less than half the inflation rate.) The Washington DC area CPI increase from July 2011 to March 2019 was 10.9% (with 2 months remaining in the fiscal year) so the city's property tax increase over 8 years has been 5.6 points above inflation.

Maybe David Navari was including other figures that the city lists under Taxes and Utility Fees in its annual budget. Some did show steep increases.

Highway revenues are transferred from the state, which had cut them severely a decade or so back. Local governments won a big victory in getting them restored so that city receipts went from $43,931 in FY11 to $464,802 in FY19 (estimated).

The city's Admission and Amusement revenue went from $514 in FY11 to $130,000 in FY19 (estimated), almost totally linked to Chuck E. Cheese's opening in Takoma Park, since the city gets a cut of money pumped into game machines.

The amount received by the city from state income taxes jumped from $2,326,483 in FY11 to $3,400,000 in FY19 (estimated). I note that Maryland's unemployment rate dropped from over 7% in 2011 to 3.7% over the last year, responsible for some of the higher revenue.

To say that "our tax burden has gone up 25% in eight years" -- with the implication that we're talking real property taxes and the inclusion of items the don't affect the tax burden of the vast majority of taxpayers -- seems deceptive.