Tuesday, November 15, 2005

A taxing view?

Does two posts in a row make a theme?

"Live Free or Die" was not initially meant to refer to taxation. However, New Hampshire residents will fight to the death to avoid taxes. New Hampshire has no sales or income tax. There are meals and lodging taxes, and capital gains taxes, and business-based taxes. However, the largest revenue generator for state and local governments is property taxes.

There is no such thing as a free lunch. Public services need to be paid for somehow. We all understand that. And, it is generally understood and accepted that real estate taxes will increase over time. However, any significant increase to a tax bill will generate more fervor in New Hampshire than any state in the union. Perhaps that is why there are so many tax-related stories in the local press on any given day. ( Others would argue that there just isn't that much else worth talking about in the area. )

The town of Orford is currently enmired in a battle over, what is popularly being refered to as, the view tax. The independent assessment firm that was hired to reassess properties in the town has raised the valuations on many properties by $100,000 or more based on "the view" from a particular property. The Union Leader article gave one example where a one room cabin with no electric, phone, or septic services, was valued at $22,900 — plus $140,000 for it's view of rolling hills. The assessment firm argues that "view" has always been part of any assessment formula. Residents and Town Selectmen argue that the increases in local values is outrageous and unwarranted. Most of the fervor over "the view tax" has been that the assessment forms now have a distinct line for the valuation of properties labled "view".

Assessments are supposed to be based on fair market value of property. While I am sure that the town has a right to be concerned about an overly steep increase in the valuation of its properties, I have to wonder if this situation would have generated less hype had the details of the valuation not been broken down so clearly on the assessment forms. Then again, that guy with the primitive cabin who was assessed at $162,900 probably has a right to know why HIS cabin is worth more than some guy down the road whose identical cabin was only assessed at, say, $25,000 since that cabin only has a view of the town dump. Then again, if I were in the market for hunting cabin, would it be worth the HUGE difference to have a lovely view from my primitive hovel. Perhaps. I certainly hope that the assessment firm has enough substantial comparable market data to back up such differences.

I wish Orford well in its fight of the assessments. The State is looking for revenue in some tough economic times. It should be interesting to see how this plays out.


David said...

It's not just a local story, the view tax made the front page of the Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2005/11/13/AR2005111300965.html

Another side to the tax what debate: (I may have this backwards) Washington State has no income tax, Oregon State has no property tax. Clearly there is a sweet spot in where you live and work if you are close enough to the border. I should say, that was true when I was in school out there (a little while ago...).

Kitten Herder said...

"A little while ago..." ;)

I am not against taxation. There is no such thing as a free lunch. Since living in NH, however, I have gotten a pretty jaded opinion on property taxes and assessments. Basically, it boils down to assessors tagging properties with a certain value to reach an overall valuation goal for an area to meet the revenue goals of whatever municipality that hires them for the assessment. Draft budgets are drawn up before the assessors are ever turned loose on an area.

When we lived in Bedford, the education budget needed to increase big time the last two years, dovetailing with a long anticipated reassessment of the town. Voters would only approve a tax increase of so much. Low and behold, the property value base of the town went up enough to meet the difference between the tax 'rate' that the public could stomach and the necessary funds for the budget.

So, it's a game, IMO.