The Observation Deck

Mr.Liston,

How much did you pay for your house? If it would sell for over three hundred grand you may be better off selling it and buying a similar or larger house for less than 160,000 dollars, which is what someone else described the average price of a lakewood home being.

On a related topic, Schools should be funded on levees against household electricity use: People have some control over how much electricity they use, but families with kids tend to use much more electricity. Assessing how much a home is worth is a bureaucracy-heavy process that causes more trouble than it is worth. Homeowners generally have no control over how much their home appreciates or depreciates. The only real measure is the record of a homes last sale price.

Mr. Liston.

Your analysis is interesting, and as I said, I am sympathetic more than you know. However, there is one misconception implicit in that analysis.

If your new assessment took your property value from, say, $250,000 to $300,000, as far as the SCHOOLS are concerned, it's still only worth $250,000. Your taxes won't go up 20%, only the half the schools DONT get will go up that much.

The schools get no inflationary increase from higher assessments. That can only come through a vote, which we'll probably get next year.

When people talk about the out-and-out silliness of the Ohio school funding system, they're not kidding. A rational system would provide for incremental growth year to year, via income or sales taxes, rather than the crazy quilt of assessments, levies, elections, etc.

I agree that your home should not be a 'piggy bank for the schools' but the money has to come from somewhere. And when our lawmakers give the finger to our own Supreme Court on this issue,that's certainly government malfesance, but a different type than what you describe.

A system based on income or sales taxes would work in theory, in terms of keeping up with inflation.

but in the era of subsidized urban sprawl and big box retail concentration it would not work: A wal-mart will simply close up shop and construct a bigger wal-mart a mile away.

Subsidized suburban sprawl typically leads to hyper class stratification(class based on income, that is). Places like Lakewood are exceptional in this regard. Places like Westlake or Rocky River or Bay Village thrive on wealthy people working in not-westlake and not-rocky river moving there. The difference between them and Lakewood is the diversity of incomes, and the density and diversity of housing. Location, Location, Location: My Grandpa's house is worth about 80,000 in Cleveland, probably 195,000 in Lakewood south of Clifton, and much more in Westlake(if it could be levitated over)

That would lead to vast inequities in education funding anyhow. not that it matters in that regard: More is spent per student in Cleveland than in Westlake or Bay Village, the last I heard: it is simply that more money comes from the state than locally in Cleveland.

The solution would seem to require tearing apart how the U.S. constitutional Right to an Education is currently interpretated. Training as a lawyer inherently renders someone incapable of sense or good judgement: Supreme Court Judges are the most successful lawyers, therefore a sensible solution is not possible in this regard.

Tim Liston wrote:And I really don?t care whether my home appreciates in value or not. My home is a place where my family lives. It was never intended to be an investment, nor a growing piggy bank for the schools, etc. It was my hope that I could live in my Lakewood home until I die. But as the county arbitrarily increases the taxability of my home, and as the tax rate itself increases, I?m pretty sure I will have to be moving into a cheaper home or perhaps even into a cheaper city. I don?t know how long I can afford to continue to live where I do now, especially with two kids to put through college and my hope of retirement.

Tim

Some things jump out.

Maybe you do not care about the investment angle but many do. I have investment property that has done better than the market for me. This would be like someone saying "Bikes should not be allowed during driving times, as I do not ride. Why should I pay for Bike Racks through taxes when I own no bikes"

Also when you bought your house, you knew the value would rise, and that taxes would be rising as well. If you did not think of this, I have no sympathy. My wife and I looked at 15 acres in Medina 15 years ago. The area around it was becoming more developed. It had 3,000' of frontage. I asked about sewers. The realtor said there will never be sewers out here. Meanwhile less than a mile away the city was putting in sewers. My wife and I both knew the sewers would be installed right as we retired and the cost would force us from the house. We passed. I have a friend that bought a very nice house near the Lake, he knows, he will not retire in that house as he can barely afford it now. But he liked the house and bought it. Point is how can you complain about things that you knew were going to increase?

At least you are not like many Lakewoodites. "I always voted for school levies while my children were in school, but know that they have graduated I think taxes are too high." You still have kids in schools.

Finally the success rate of contesting assessment is about 98%. Of course you have had some massive building projects in your neighborhoods. And when you neighbor ads a boat dock, beach, break wall, etc. its you that will also pay the tax burden.

FWIW


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The only problem is that real estate, especially in Ohio, is one of the few iinvestments where you pay tax on profits before you actually REALIZE the profit.

If I buy $1,000 of Cheesecake Factory stock, and it soars to $10,000, I don't owe a penny of tax until I unload it. Even the tax on my forlorn bank account isn't due until after I already have the interest in my hand.

But on real estate, you get whacked just by sitting there. You may not even be able to sell your house for what they say it's worth. It's a patently unfair, messd-up system for many reasons. One of those reasons is it leads to decent citizens resenting the schools and their "piggy bank". It's gotta change.

Joan said "The schools get no inflationary increase from higher assessments. That can only come through a vote, which we'll probably get next year. "

That is not entirely accurate they do get the inside milage - not the outside milage. It is very interesting that when property is sold - it is the school board that files suit against the new owners to pay back property tax according to the new assessed value - not the city.

Ohio's system is infinite times better than California where I lived for 20 years before returning to Lakewood in 2000.

In California you pay tax against your purchase price until you buy another property. For example, I paid tax against my $650,000 purchase price in 1993 (don't be impressed, it was a 1900 square foot box, entry level pricing is $500,000). Trouble is the guy next door may have bought his house 10-15 years earlier for $150,000. My taxes were 5 times greater than his/hers yet he/she could reap exactly the same services.

Give me Lakewood anytime! I will happily pay for assessed growth 3, 2, and 1 years past the time the growth was realized. More importantly, the MPI per square foot in Lakewood is still reasonable versus other communities. Personally, I look at the total equation of mortgage plus taxes and interest and attributes/amenities/services sought and delivered to define my value equation.

My kids have a chance to buy a home here someday.

Now we just have to work on making sure there is job growth in NEO, a safe and secure community and adequate housing and good schools going forward to make sure Lakewood is their community of choice.

Rollbacks…. Inside millage…. Outside millage…. 920 reduction…. 10% reduction…. 2.5% reduction…. Homestead…. Yeesh….

Many people have their property taxes paid as part of their mortgage. I don’t. I write a check twice a year so I have a clue….

Jim you are right about one thing. When I bought my Lakewood home in the summer of 1995, I had presumed its value would keep up with inflation, and possibly better. But I was not aware that as its value increased by 46%, my property taxes would increase by 117%. Abject ignorance on my part….

Nor was I aware that the chunk of my home owned by the schools/city/county/etc. would rise from 38% to 55%. If it rises by a like amount in the next 11 years, the schools/city/county/etc. will own 80% of it. This is a distinct possibility given the enormous pension promises made to school/city/county/etc. employees.

I can’t believe how nutty this is. These guys make Enron/Adelphia/Worldcom look like amateurs….

Jay Foran wrote:Ohio's system is infinite times better than California where I lived for 20 years before returning to Lakewood in 2000.


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First time I've ever heard Ohio's school funding system as being infinitely better than ANYTHING.

I'm sorry but it's a philosophical point. Every other tax (and I'm the rare conservative who believes, yes, taxes ARE necessary) is based on an actual TRANSACTION. Wages earned, interest paid, goods and services bought and sold, profits taken.

Only the reappraisals of property taxes are based on POTENTIAL transactions. I MAY get x for my house if I sell it, but I may not sell it, and if I do, I may not get x. Yet I am liable for a tax based x because that's what was determined by a bureaucrat sitting at a PC

You paid tax on a $650,000 home because you actually BOUGHT a $650,000 home. Your $150,000 neighbor never played in that league. Why should he pay based on a transaction he never enaged in?

And it's not about getting the same services. I hope that the police respond to the $7 clerk's 911 call as quickly as they do to yours.

In any event, I understand that you were one of the point people behind the school facilties issue. Despite the people on this forum who are saying,"thank you, sir, may I have another?" when it comes to big tax increases, the troubling things I'm hearing suggest that the program may run into a real roadblock when the next bond issue comes up next year.

That would be a shame.
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