Got My Property Tax Bill Today….

[Tim Liston]

Guess what? I no longer own my home. Not even a bit of it. Even though the mortgage is paid off in full. Between LCSD, the County, the City, the library and the Metroparks, they own my home. Mostly of course LCSD.

BTW you don't own your home either. Let’s do the math….

I now pay about 3.3% of the assessed value of my home in property taxes to the above-named governmental entities. That’s up quite a bit over the last couple years (about 2.8% then) and a crap ton since I bought my house here a couple decades ago (it was about 1.9% when I bought my home. Think about that….).

For the sake of argument, let’s say my house is assessed at $100,000. That means I pay $3,300 annually in property taxes. So the question is, what is the value of $3,300 a year in perpetuity. Well, that’s pretty easy to calculate actually. In annuity math, that payment stream is (oddly enough) is called a “perpetuity.”

As it turns out, a perpetuity is really easy to calculate. It’s just the annual payment divided by the assumed interest rate, the so-called discount rate. So if for example I assume the rate of interest I can safely earn is about 2.5%, which is the current rate on 10-year treasury bonds, then my $3,300 a year forever is worth $3,300 / .025 = $132,000. Go ahead and look up the formula online. Easy to find.

But hey, my house is only worth $100,000. The obvious question is, why should I be paying property taxes ($132,000) in excess of what my home is worth ($100,000)? The answer is, of course, because you can’t swing a dead cat without hitting someone who thinks it’s quite appropriate that someone else pays for their kid to go to school.

BTW the perpetuity calculation assumes that your property taxes will never increase. Care to make that presumption?

Property taxes have three times been ruled as an unconstitutional way to fund public education. This of course over the last dozen years or so. The Ohio Supreme Court ordered our legislature to find a better way. If you or I defied a Supreme Court order we’d be hauled in front of a judge and then to jail. I guess it’s good to be a legislature. You get a free pass.

In the meantime, property owners get their heads handed to them….

[Grace O'Malley]

What a whiner. You live in a very nice home and area but all you do is bitch.

I wish I didn't have to pay a dime, but the city services, schools, and libraries aren't going to be there for my family unless we all fund them.

You have a choice to live elsewhere but you'll never be able to live anywhere without some tax. Get over yourself.

[Bill Burnett]

When I bought my house here 25 years ago my property taxes were $900 a half. Now they are over $1900 a half. I still have voted for every levy and bond issue on the ballot in those 25 years. Sure the taxes are high. I knew before I bought that Lakewood has no industry to help the homeowners with the tax burden. With the high taxes comes good schools and city services which is a big plus when it comes time to sell my home.

I will agree that something needs to be done down in Columbus to remedy the situation. Don't forget our Governor when he took office decided it would be a good idea to cut the state allotment for our schools by quite a bit. The last levy was to make up that shortfall. But hey he cut my income tax by about $100.

[marklingm]

I wish I didn't have to pay a dime, but the city services, schools, and libraries aren't going to be there for my family unless we all fund them.

Grace,

I agree.

But I'm not voting for the property tax that City Hall is planning on sneaking by us in an off election year to pay for an unnecessary City Hall run recreation department and the "Michael P. Summers Recreation Center & Natatorium" at the soon to be vacant Lakewood Hospital location ... or other vacated property.

I challenge anyone to name just one city run recreation department that is better than the recreation department run by the Lakewood City Schools.

City Hall can't even manage issues related to two small basketball hoops at Kauffman Park.

Matt

[Tim Liston]

Grace….

Call me names, whatever. I’ve been called worse. Heck, about six months ago I got a PM from a frequent poster here who said “I used to think you were a complete azzhole but now I have come to realize that you were right all along.” So I am emboldened!

I just think that when the property taxes we pay on a house exceed the value of the house, then it’s gotten completely out of hand. We passed what, six levies last year? School levy in the spring, then two more school levies in the fall, plus levies for the Port Authority, the County, and the Metroparks. That’s six….

Making it as simple as possible, if you said ”Hey Tim, you can have a house worth $100,000, or you can have $3,300 a year forever, which do you want?” I’d take the $3,300 a year forever, buy the $100,000 house, and put the remaining $32,000 in my pocket. As long as the property tax rate per year exceeds a safe rate of return on your savings, the taxes are worth more than your house.

The fact that your property taxes exceed the value of your property, does that not resonate with ANYBODY? Am I really the only one of the 100 or so who have read this post that thinks that’s outrageous?

I moved to Lakewood in 1985. I rented. When I bought in Lakewood (1995) my property taxes were about 1.9% of the value of my house. Just a year ago it was about 2.8%. They have now grown to 3.3% (3.2982% to be exact) of the value of my house due to the passage of all six of the aforementioned levies. The value of my house is up about 20% in 19 years (woo-hoo!). But my property taxes have more than doubled. That’s not an outcome that I should have anticipated when I bought my house.

Property taxes have gotten crazy. It’s no wonder that no city in Northeast Ohio can attract significant new residential development without at least a 10-year tax abatement (e.g Clifton Pointe). Even University Circle and downtown Cleveland have to offer abatement to attract residential development.

I also think that when then Ohio Supreme Court orders our State legislature to alter the way we fund our schools, well, then our legislature needs to do so, or be jailed. One or the other. Why the OSC has not issued arrest warrants is beyond me. I guess the whole “checks and balances” thing is just a fairy tale we teach our kids in government-run schools.

But what do I know….

[Jim O'Bryan]

Grace….

Call me names, whatever. I’ve been called worse. Heck, about six months ago I got a PM from a frequent poster here who said “I used to think you were a complete azzhole but now I have come to realize that you were right all along.” So I am emboldened!

I just think that when the property taxes we pay on a house exceed the value of the house, then it’s gotten completely out of hand. We passed what, six levies last year? School levy in the spring, then two more school levies in the fall, plus levies for the Port Authority, the County, and the Metroparks. That’s six….

Tim

Great stuff.

But as I was biking today, I was thinking, why isn't the same true about everything with
your house, not just taxes.

Your beautiful house, must cost a fortune to paint every 7 years, it has to be damn close
to the tax bill. So why doesn't Sherwin Williams own your house?

Does Cliff Marathon own some of it because he sells you gass for the lawnmower and leaf blower?

I understand, from knowing you and reading you that you flow Libertarian, especially
when it comes to taxes and schools. And I am always fascinated and sometimes amused
at the way the Libertarians on the Deck package comments.

So, does Scott Grass Seed own a piece of your house cause you reseeded?

You do have a bitching house.

.

[ryan costa]

they should just change the state constitution to read that it is now okay to fund schools with property taxes. that is the quickest solution. it should only take about fifteen minutes.

one new racket is top open a charter school. then the government will give you a big check for each student enrolled.