Wednesday, February 01, 2006

February Follies

Wednesday's Capital leads off with a piece on Delegate Dwyer's erstwhile effort to get enough signatures on a petition to force his anti-gay marriage bill before the House. Thankfully, he's failed at that task thus far. The article reveals a potential side benefit of the recent judicial ruling which concluded, preventing gay marriage violates the State constitution: Bigoted Anne Arundel County Clerk of the Court Robert P. Duckworth would refuse to officiate same-sex ceremonies, hopefully leading to his being frog-marched from office, and allowing him to join the horde of countless unknown individuals who allowed their principled prejudices to drive them into the ranks of the unemployed. [Post profile on the man some are calling the "Anne Arundel Ayatollah"]

In more pleasant news, increasing tax assessments seem to be the talk of the town. On Tuesday evening, Eastport hosted a meeting to inform local residents about the process to appeal increasing property tax assessments. For instance, one resident who purchased her waterfront home in Eastport in 1996 for $367,000 had her property assessed at $1.7 million earlier this year. While, on the one hand, it's difficult to muster pity for people whose homes quadrupled in value over the past decade, it's easy to see how such a valuation could certainly squeeze people's pocketbooks. I've been thinking about this a fair amount, and trying to come up with an equitable solution. Certainly, appealing the assessment is one tactic, but really it's only temporary measure. Property values will keep climbing, and it's not hard at all to believe that waterfront property in Annapolis would have a low end of $1 million. How about this as a compromise:

  • The homeowner's assessment is locked in at the purchase price of the home, and that assessment can only climb by a fixed percentage (say 5%) per year, even though the potential sales price of the home may go up by 15-20% per year.

  • The catch is the State's "real assessment" stays in place, and for each year their is a discrepancy between the amount the homeowner pays, and the amount they would pay under the State assessment, a running balance is kept.

  • At the date of sale, that running balance comes due, and is paid out of the profits from the home sale.

    So, as an example, Jane Homeowner buys her home in 2006. Property values climb 17% per year, and her property tax payment is $1 for every $100 dollars of assessed value:

    YearHome ValueHomeowner's Assessed ValueActual PaymentPotential PaymentDifference

    In 2011, Jane decides to sell for the market value. She receives about $87,388 in profit, but her running tax balance is $1,487. After the balance is paid, she takes away $85,501 from the deal. She's happy, the State is happy, and the taxes get paid, albeit a bit later. I'd welcome any constructive feedback.

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