Unintended Consequences
Friday, October 22nd, 2010This will be a somewhat abbreviated post because the News Guy moderated a debate among Northeast Kingdom legislative candidates last evening and there is only so much one fellow can do in one day.
Oh, all right. Full disclosure. In addition to this public duty, the News Guy herewith admits another factor. As revealed in an earlier post (the one about Centennial Field and the Lake Monsters Take Us Out To the Ball Game? July 3, 2009) among the News Guy’s private passions is that exotic past-time known as baseball, to which he devoted the latter part of the evening.
So for today, just a correction or two, a little mopping up, and then a tale, a true story that may or not be cautionary.
Wednesday’s post reported news of an “inter-active map showing poverty rates by state and county in 2009 when the poverty reached its highest levels in 51 No big surprises.”
Obviously that should have been the poverty rate which reached its highest levels in 51 years, period, end of sentence.
A few paragraphs later, the post listed the poverty rates for Vermont’s counties, but left out two of them. Thanks to the reader who pointed out the omission, and for those who read the post early, scroll down. All 14 counties are in there now.
And to the reader who asked what the under-five-year-old poverty rate is by county, stay tuned. The search is on.
Another reader had a good point on that post, and this time it was not just any reader but Doug Hoffer, the Democratic candidate for Auditor. Read Hoffer’s full comment (just go down to the bottom of Wednesday’s post and click on “3 comments,”) but his main point was that it isn’t good enough for Vermont’s poverty rate to be lower than in most other states; ten percent in poverty still too high and we’re all too willing to accept that state of affairs.
An interesting comment which deserves a full treatment soon.
Later in that same post was the report of a poll showing that “45 supported the idea, 36 percent opposed it, and 19 percent were undecided.”
No doubt you all figured this out for yourselves, but just for the record, that’s 45 percent.
The October 11 post, Ethical Quandary, reported that Lt. Gov. Brian Dubie was once a member and chairman of the school board in Essex. It was Essex Junction. Apologies to both municipalities and to Dubie.
OK, now to the tale, in which the names shall be changed to protect the innocent. So let’s call them Mr. and Mrs. Jones. They live in Charlotte, in the same house they had built more than 40 years ago. It isn’t a big house. Fifteen hundred square feet, Mr. Jones said.
The Joneses are not young. He’s 81. She’s 75. They’re not rich either. Last year, they said – and emailed tax records to back it up – their taxable income was $44,000. Because they own their home free and clear, they no longer have to make mortgage payments. They just have to pay their utility bills, buy food and fuel, whatever clothing they might need, and some incidentals.
Oh, and of course property taxes on their house. This year, their property tax bill is $11,252.
No, that’s not a typographical error. The Jones pay more than $11,000 – one quarter of their taxable income – for property tax.
Wait a minute. Doesn’t Vermont’s property tax system include an “income sensitivity” provision that protects middle-income homeowners from sky-high property taxes?
Yes, but earlier this year the Legislature passed a bill (H 783) effectively abolishing income sensitivity when “the equalized value of a housesite (is) in excess of $500,000.”
That covers the Jones’s 1,500-square-foot house that they had built in 1967 for $22,000. It is now assessed at $1.4 million
No, neither of those was a typo, either.
The Joneses have made some improvements to their house over the years. But that’s not why its assessment shot up. It was, said Mrs. Jones, the much larger houses built all around them over the last several years that raised the assessed value of all the homes in the neighborhood.
The Legislature acted after some news stories in the Burlington Free Press and the Valley News (for some reason unavailable on its web site) that some residents of opulent homes were paying modest property tax bills based on their incomes.
The Legislature acted out of a combination of opportunism and controlled panic. The lawmakers were scrounging for all the revenue they could find. And they worried about being attacked for coddling the “wealthy,” even if these supposedly wealthy people earned average incomes.
It was not an unreasonable decision. Like the others so targeted, the Joneses will not suffer economically. They can sell their home, probably not for $1.4 million in the Recession, but for several hundred thousand dollars, which will allow them to live out their lives in comfort.
But they don’t want to move.
“This is our home,” Mrs. Jones said. “It’s where we raised our three boys. At my husbands age, moving will be hard on him.”
Surely this is not what the Legislature intended. But nobody has repealed the law of unintended consequences. And legislating on the basis of a few “horror stories” is a good way to activate that law.






