Yesterday, I showed you how your taxes go up each year, not from your home’s market value rising, but from tax increases due to a failed public policy agenda. It is that time of the year when your wallet pays for the public policy agenda that pretends to be creating a prosperous El Paso. Most of you know that I believe that the misguided public policy agenda, that is dependent on tax monies, is unsustainable. In its simplest terms, the current public policy agenda pretends to create a vibrant El Paso economy based on the notion that you must invest in your community to make it better. Hence, your property taxes continue to increase each year.
This public policy agenda has been ongoing for many years now. Currently it is being propelled by Veronica Escobar and her cohorts. Although there are many examples to look at, today I am going to explain the failed public policy agenda by reminding you about the El Paso Children’s Hospital.
As you likely know, the children’s hospital recently filed for bankruptcy and it has been absorbed by the taxpayer-supported hospital; the University Medical Center, or UMC. When the children’s hospital was first proposed, the taxpayers were promised that it would not be tax supported and that it’s well thought out revenue model would create jobs and prosperity for El Paso.
The hospital’s eventual bankruptcy revealed that the financial model was faulty from the onset, hence the bankruptcy. As a result of the bankruptcy, Veronica Escobar told the taxpayers that the city “deserved” a children’s hospital, that UMC should not lose money due to the bankruptcy and that she knows that the children’s hospital will be an economic driver, actually, the community could not afford to lose the jobs and therefore she told you that it needed to be absorbed by UMC in order to keep it as a showcase of a prosperous El Paso.
In other words, although you were promised that the children’s hospital would not be a drain upon the taxpayers of the community, it is now positioned as a public entity that must depend on your taxes to remain viable. The example of the children’s hospital is an example of the community-wide public policy agenda that depends on property taxes to create an illusion of prosperity.
Well, it is now time to pay the piper.
Like every time the discussion about taxes is raised, the retort from the politicians is that “we are not raising taxes” this cycle, we are focusing on moving the “burden away from homeowners to commercial businesses” or that “you voted” to tax yourselves.
So what is the bottom line?
Although you have been promised over the years that tax relief is just around the corner, the reality is that your taxes just continue to increase every year.
Let me illustrate this for you. Although I no longer own the house I used to own in El Paso, I will use it to illustrate your tax increases. I am using my previous home because it demonstrates a real world example. When politicians discuss taxes, they use averages and confuse the tax increases with pontifications of tax exemptions and nebulous arguments about how it’s not their entity but rather the other entities that are costing you more in taxes. But for your wallets, it is actual dollars that you pay your taxes with. So let me give you a real world example.
For my example, I am leaving the school district taxes out of the illustration. Yes, they are the largest component of your tax bill, but there are many school districts with vastly different tax rates and exemptions. It is part of the pass the blame game the taxing entities play on you. There is also the notion of investing in the future of the children. Since my focus is on the failed public policy agenda heavily dependent on property taxes for prosperity, I am just going to focus on the taxing entities that have pushed forth that taxing notion.
Let’s look at the taxes for my old house in El Paso.
2016 Market Value: $168,055.00 – total taxes paid excluding the school district: $2,301.78
2015 Market Value: $168,055.00 – total taxes paid excluding the school district: $2,298.86
2014 Market Value: $162,853.00 – total taxes paid excluding the school district: $2,236.24
2013 Market Value: $164,052.00 – total taxes paid excluding the school district: $2,175.16
* Without exemptions
2016 City of El Paso taxes: $1,252.77
2015 City of El Paso taxes: $1,189.85
2014 City of El Paso taxes: $1,139.62
2013 City of El Paso taxes: $1,112.89
2016 El Paso County taxes: $738.14
2015 El Paso County taxes: $738.14
2014 El Paso County taxes: $737.23
2013 El Paso County taxes: $710.55
2016 University Medical Center (UMC): $370.87
2015 University Medical Center (UMC): $370.87
2014 University Medical Center (UMC): $359.39
2013 University Medical Center (UMC): $351.72
Now let’s compare my old house in El Paso with my house in Orlando.
The house in El Paso is 1,852 square feet. The house in Orlando is 2,106 square feet.
2016 Orlando Market Value: $208,220.00
2015 Orlando Market Value: $206,773.00
2014 Orlando Market Value: $205,132.00
2013 Orlando Market Value: $202,100.00
2016 Total Taxes Paid in Orlando, excluding school: $1,537.13
2015 Total Taxes Paid in Orlando, excluding school: $1,525.18
2014 Total Taxes Paid in Orlando, excluding school: $1,511.37
2013 Total Taxes Paid in Orlando, excluding school: $1,483.52
For those of you that are curious about the school taxes, the 2016 assessment for the schools for my Orlando neighborhood is $1,427.22, down, yes down from the 2015 assessment of $1,489.70.
Now this is where it gets even more interesting. The cheapest water bill I ever paid in El Paso was $48.26 and that was my last bill on a house that had been empty for almost a year! In Orlando, my average, yes I mean average water bill is $22.52 for a house with a swimming pool. I have paid as low as $12.89 for my water bill in Orlando. In Orlando, my trash gets picked up as part of my property tax bill. If I have an old sofa that I need to get rid of, all I have to is send a request via the online tool and a few days later the old sofa is picked up from the curve. And it doesn’t cost me any extra money. The storm water fees in Orlando are part of the property taxes.
Invariably the question that everyone is likely asking, what’s the difference. Some of you will point out that Orlando is a tourist mecca. This is precisely where the failed public policy that El Paso has embarked upon is exposed. Orlando seeks money from outsiders for its taxes. This cultivates and incentivizes business investment to create more tourist attractions. Encouraging outside monies into a community need not be limited to tourism. It can be the manufacturing of consumer goods for export to other communities. It could be cultivating intellectual property providers selling their services to other communities. For example, have you ever noticed how many lawyers fly into El Paso each week from Houston? The legal fees paid by El Paso is spent in Houston.
That is true economic growth, using other people’s money to grow the community.
In essence, the property tax burden in Orlando is dependent on outside investments, not recirculating the same local money in an endless vicious circle that only burdens the taxpayers further.
But El Paso taxes visitors for the ballpark using the HOT taxes will likely be pointed out by some of you. My question to you is, how has that worked out for you? Have you noticed that paying attendance at the ballpark is down?
Oh, and by the way, my cost of living is Orlando is the same as it was in El Paso, except that I have access to more services and the taxes do not overwhelm my pocket book.
The bottom line is that continuing the public policy of building the economy through taxing the locals is doomed to fail because you cannot have an economy that recycles the same pot of money over and over again.