Thursday, 31 March 2011 by David H. LeVan
Where’s the plunger when you need it? Have you ever been stuck in a bad situation because there simply was no plunger available when it was most needed? It’s quite a sinking feeling…. at least that’s what I’ve been told. My friend recently experienced a delay while traveling because of this very situation. It seems that the airplane toilet was clogged and no one could find a plunger. After waiting a long time, maintenance was able to locate a plunger and resolve the situation so the plane could take off.
Do you feel like we’re getting clogged up with property taxes? According to the US Census Bureau local governments were on track to collect more than $475 billion in property taxes in 2010. That is an increase of 92% from the estimated $247 collected in 2000. In that same period inflation increased only 27%. In other words, property taxes have outpaced inflation by over 340%! By contrast, we have experienced the biggest real estate downturn of our lives. Real estate values on a national perspective are estimated to have dropped as much as 30%.
Values plummeting while property taxes increase at such a rapid pace – the water is starting to rise. A 92% growth in property taxes means that local government have increased their budgets and have spent 92% more than in 2000. Is it because of expectations and demands for services that local government provides? Is it because it’s easy to spend other people’s money? Now, where is that plunger?
Thursday, 24 March 2011 by David H. LeVan
Many of us spent part of this past weekend watching March Madness. In fact, it’s the one time a year that I actually watch college basketball (and probably make up for the rest of the year in a few weekends). If you filled out a bracket prior to the tournament, chances are it’s time to reassess your picks (particularly in the Southwest Region where three of the four final teams were seeded 10th, 11th and 12th – a historical first). What happened to all the teams seeded 2nd through 9th?
Reassessment is an important aspect in college basketball. It’s also an important aspect in property taxation. Each state requires the jurisdictions in the state to reassess values, which are the basis for property taxation, on a periodic basis. For example, in Texas (a team knocked out of the NCAA tournament) jurisdictions are required to reassess every year. By contrast, Ohio (whose team will likely win the NCAA tournament) reassesses every 6 years. Splitting the difference is Iowa (a team that didn’t make the NCAA tournament) where jurisdictions are required to reassess every two years – and, by the way, the reassessment year is 2011.
When jurisdictions reassess values it provides a good timeframe for taxpayers to also reassess the values being placed on their property. Take advantage of the opportunity. You’ll probably get better results than you will with your NCAA bracket.
Thursday, 17 March 2011 by David H. LeVan
About a month ago I took my wife shopping for a new computer. Given her interest in photography and video there really was no choice but going to the Apple Store. We walked out with a beautiful new MacBook Pro. Cost…. approximately $2,100 (shopping together….. priceless). At the time they were offering a discounted printer as a special incentive. We thought about it but declined. After further thought, my wife decided the printer was a good idea and went back to the store almost 30 days later to see if the deal was still valid.
Interestingly, a new model of the MacBook Pro had come out since the time we purchased her MacBook Pro. Cost….approximately $2,100. Because of the new model the cost on the “old” model (the one we had purchased earlier) was several hundred dollars cheaper. Cost…. approximately $1,800. Apple decided to not only give her the printer but also threw in a $200 rebate for the cost difference! The good news is she received the printer for free plus the $200 rebate. The bad news (if there is actually bad news in this story… and for the sake of the blog post let’s say there is) is that in less than a month her laptop had decreased in value by $300 (15%) due to obsolescence. The new model created obsolescence for the old model.
As we know, property taxes are based on value. In a state that taxes equipment, we would have cause to reduce the value (and thus the taxes) on our MacBook Pro by 15%. Taking that out on a larger scale, I wonder where you might find examples of obsolescence in the equipment your company has purchased.
I’m also wondering if we can go back to the Apple store in 30 days and get the same deal again!