Taxes in University Heights are too high.
The consequences of high taxes are around us.
People are less likely to move into our city when they learn the tax burden that comes with it. This reduces demand for our otherwise desirable beautiful homes, and that depresses our property values. Our home values have not rebounded since the recession, and this is one reason why.
We have lost successful businesses to neighboring cities because it is cheaper to do business elsewhere. Businesses have moved to the north side of Cedar Road, and enjoy lower taxes while serving the exact same clientele. And for our city, that’s a 100% loss in tax revenue.
In 2006, our elected officials made the case for raising taxes. They put it on the ballot. We voted, and we raised taxes on ourselves. A majority of us thought it was necessary at that time.
But in recent years, we’ve had surpluses in our city. Last year, we had a $2.5 million surplus. The year before that we had a $2.3 million surplus.
Earlier this year, city council discussed an increase of the RITA tax credit of an additional .25%. For this past year, that would have resulted in $490,000 less revenue.
In other words, a .25% increase of the RITA tax credit would put almost half a million dollars back in the pockets of University Heights taxpayers. And I support this.
We need to be prudent, of course. You expect a high level of city services, and to deliver that, there has to be a way to pay for it. That means taxes. But given the recent surpluses, it looks like we can deliver some much desired tax relief without jeopardizing the level of city services you expect.
As for the rest of the surplus, we should be making expenditures that help rebuild our tax base. That’s why I support commercial redevelopment, investment in our business districts, and investment in our neighborhoods, because doing all of these things will not only improve our quality of life, but they also grow our tax base. We can afford to lower our taxes if we maintain revenue by growing our tax base.
Look at all the businesses we have lost over the last eight years. Look at all the empty store fronts, not just in University Square, but in all of our business districts. Look at them and think about how we nevertheless have a $2.5 million surplus. Now think about how much revenue we might have if we had thriving businesses in those empty spaces. We could afford to lower taxes even more.
A .25% tax credit increase is just one idea. I support it. But I’m open to other ideas, and additional ideas.
So here is another idea.
We have long been known as The City of Beautiful Homes. But our beautiful homes are growing older. Some of our residents are outgrowing their homes. Some of our residents like the architectural offerings of our city, but desire modern updates. We should encourage investment in our homes, and here’s one way to do that:
Residential tax abatements.
I support a ten year tax abatement on the increase in value that results from major improvements in your home. For example: If the taxable value of your home is $150,000.00, and after improvements if your home value is $200,000, then you would get an abatement on that $50,000 increase for ten years.
I would suggest that the abatement be transferable to the new owner if you sell. I would suggest that it apply to both single family and multi-family homes.
For people who feel like they are outgrowing their homes, or are considering moving to gain upgraded living space, this is a way we can make it worth their while to stay. Meanwhile, our overall housing stock will improve, and we will benefit from that for decades to come. Our homes will be more valuable, more desirable. Even homes that aren’t immediately improved will become more desirable because buyers will know that they can invest in these homes and get a tax abatement.
What do you think?