The new reappraisal for Brattleboro has been completed by the town listers and will be mailed to all property owners within the next two weeks. Homeowners will be stunned at their reevaluations and in sticker shock at the pending impact on their August 4th property tax bill.
Renters will be overcome with angst that their landlords will pass these hellacious increases onto them (believe me, they will). Locally owned businesses will need to raise prices on their products and services that will render them less competitive than their “big box” competitors who can absorb this tax without price increases.
Frustration will turn to anger. Numerous appeals, to no avail, will be filed with the Town Listers, the Board of Civil Authority, and ultimately to state court. The selectboard will be placed in the unenviable position of defending the Listers because residents will blame the messenger and not the message. It will be a summer of discontent in Brattleboro.
There are twelve reasons why property taxes in Brattleboro have spiraled out of control.
Reason 1: The financial overhead of the town, school, and social services has outgrown the ability of the grand list to adequately fund them. Twenty years ago thirty-five percent of property tax receipts were remitted by local industries whose owner’s actively participated in town government. That is no longer the situation.
Homeowners are now burdened with paying the lost property tax revenue from the one million square feet of vacant manufacturing space in Brattleboro.
Reason 2: The increasing cost of health care insurance is driving town and school budgets through the roof. In theory, single payer universal health care would resolve this problem. In reality, it will not. To understand why, please read Vermont Is Not An Island and Internet Wine Trumps Political Whine on this web site.
Reason 3: The fundamental property tax crises in Brattleboro is not the current fair market “assessed” valuation of homes and businesses. It’s the tax rate. Property taxes are outrageous because the town and school system can not control spending. Why?
Reason 4: Representative Town Meeting has become a culture of inertia. Ninety-five percent of the budgets are fixed or negotiated before Town Meeting that representatives can do nothing about. Unfortunately for homeowners, Town Meeting has evolved into a series of meaningless “let’s send a message” referendums.
Reason 5: Osama Bin Laden. His attack on New York City had a monumental impact on the real estate market in town. Metropolitan dwellers discovered why Brattleboro residents live here. Our quality of life is more important than our quantity in life. Their motivation to own a piece of Vermont set in motion a series of events that jet propelled local real estate sales. It’s basic economics. Urban neurotic demand exceeds local housing supply resulting in a shortage that inflates real estate prices which triggers an Act 68 reappraisal.
Reason 6: The Common Level of Appraisal (CLA) under Act 68 is the real villain in Brattleboro’s property tax crises. Reassessment quantifies the financial impact of skyrocketing real estate values by state government taxing the unrealized gain of a homeowner’s property that has no relationship to the homeowner’s income or ability to pay the increases.
Reason 7: In their competition for customers, banks in Brattleboro have created an equity free-for-all marketplace based on marginal credit and minimum monthly interest payments. Homeowners are now spending their ever increasing equity line of credit, calculated on their escalating real estate assessment, to pay for purchases other than home improvements. This has resulted in a local economy that appears stronger than it really is because consumer purchases are paid for with borrowed dollars and not earned income. This level of consumer equity consumption has given both school boards and the selectmen a false sense of economic bravado when calculating their budget increases and future bonding plans.
Reason 8: Because the town and school computer systems are archaic, various boards and department heads continue to waste countless hours examining every budget line item to determine if a cut can be made. Property taxes are out of control because town and school administrations ignored the accounting data software revolution of the 1990’s that successfully redefined the fiscal efficiencies in the private sector of the economy.
Reason 9: When negotiating labor contracts, Brattleboro school board members lack the intestinal fortitude to articulate the word “no” in the presence of the teacher’s union representative.
Reason 10: Digital technology has rendered the planning and permit process obsolete. Open-sourcing, outsourcing, insourcing, offshoring, supply chaining, and workgroup computing can all be done within the confines of the home undetectable to the property tax system. This is why unemployment in Brattleboro is low and the business percentage of the grand list is shrinking.
Reason 11: Property taxes have become a disincentive for residents to improve their homes. Profits are being made on the anticipated real estate “bubble” of ever increasing residential values, and not on the condition of the property. This is why so many homes in Brattleboro, especially in the older working class neighborhoods, are in physical disrepair. Poverty attracts poverty that places additional financial demands on town, school, and social services requiring additional property taxes.
Reason 12: Outside money has replaced internal reinvestment. Up until 1990, the growth of the grand list evolved from local large employers expanding their companies within the geographic confines of Brattleboro. Property taxes, along with the planning and permit process, have made this type of local business reinvestment financially unattractive. This void has been filled with publicly held companies (Home Depot, Walgreen, Staples, Peeples, Wendys, etc.) who provide new employment opportunities but with no long term local reinvestment that would continuously expand the grand list.
For the past ten years, the town and school system have indulged themselves in a spending and bonding binge similar to an irresponsible teenager with unlimited credit cards. Within the next two weeks, the day of reckoning will finally arrive. The immediate impact of the new reassessment will be obvious and very painful. Housing in Brattleboro, whether owned or rented, will be unaffordable for those residents who work in town.
That’s the real tragedy of property taxes in Brattleboro.