Woof!After a couple of years with a 0% increase, the party is about to end.

The city that I live in has approved a 6% property tax increase for this year and an 8% increase next year.

I like how they planned the higher hike for the second year making it actually higher than the 8% number they’ve released to the public.

For those unsure of the math (or how percentages can be deceiving), here’s how it works…


Let’s say your property tax bill for 2011 was $1000.
The 6% increase for 2012 would cost you $60 more.
The 8% increase for 2013 would cost you the $60 more and then an additional $84.80.
It’s not just $80 more because the starting point is higher ($1060).

Higher starting point and a higher rate means more for the government.

That’s why a flat tax is generally preferred, though, mostly due to the fact that the general public fails to understand percentages…

I could go on and on about the gas tax here (which is a percentage so the State government benefits greatly when the price of gas goes up) but I’ll spare you…

So over the next two years, in this scenario, I’d pay $1060 and $1144.80 in property taxes.

Basically, $204.80 extra.

Doesn’t seem like that big of a deal but my actual property taxes aren’t a mere $1000… They’re more like $5k for the house and $750 for the cars.

In short, the increases add up. Like…to the tune of $345 the first year and $832.60 the second.

Ouch.

So while I should be upset about this tax issue, I’m not, really…

See, it’s just like on the national level, I don’t think we have a tax problem… we have a spending problem.

Plain and simple, the city and the country spend frivilously.

I don’t have a problem with my taxes going up if I see (and agree with) where the money is being directed.

Problem locally, though, is that while our taxes are going way up, our services are still slated to be cut. There’s a disconnect there.

Absolutely, I’ll pay more for good service but instead, in this scenario, I’ll be paying more for no service.

Where’s this money going?

Well, I know where some of it is going… No joke, just a week ago there were countless parks and recreation employees mopping the road.

Yeah, they were mopping the road. Like a tile floor. Not kidding.

I don’t know why and, frankly, I don’t care. But I do know that everyone of those guys was getting paid. To mop the road. That’s the type of expense that I think the city should “cut” immediately.

I really hate the phrase, but it’s pork barrel spending…at the local level.

Anyhow…this coming increase will cause me to come up short when my property taxes are due. Currently, I stash away $95 each week so as not to get caught with empty pockets when the bill comes due.

It’s looking like I’ll have to “up” that to $110 or $115 per week just to break even…

Could be worse, I suppose…

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3 COMMENTS

  1. OK, so this might be nit-picky, but isn’t it really better that it goes up 6% then 8%, instead of the other way around? I ran the numbers, and if you do the 8% first, you end up paying an extra $80 the first year, then an extra $64.80 in addition the second year. Making your second year payment $1144.80 in either case. By having it go up the smaller amount the first year, you are saving $20 ($1060 vs. $1080).

    Other than that, I totally sympathize and agree with your issues with our government! Have a great day. 🙂

  2. Grrrr… Angie, you’re making me second guess myself. ;0)

    And you’re right — I have my math backwards… The city is actually doing the tax payers a “favor” by starting with the smaller increase.

    For some reason, my brain is still having a hard time wrapping itself around it but here are some crazy examples to showcase it.

    Example 1:
    Tax bill is $100.
    Increase for the first year is 10%.
    Increase for the second year is 25%.

    The first year, the bill will be $110 ($100 + $10 = $110).
    The following year, it will be $137.50 ($110 + 27.50 = $137.50).

    Total tax increase over the two years is $47.50.

    Example 2:
    Tax bill is still $100.
    Increase for the first year is 25%.
    Increase for the second year is 10%.

    The first year, the bill will be $125 ($100 + $25 = $125).
    The following year, it will be $137.50 ($125 + $12.50 = $137.50).

    So, the tax bill in year two is exactly the same as it was in the first example so it seems like a wash but the nill yas way higher in year ine.

    Total tax incease over the two years is $65.50.

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