One of the very first discussions the Founding Fathers had was about how to balance the rights of all individuals with the rights of those who owned property. They knew that if only property owners could vote, the rights of individuals and minorities might be suppressed … but, if voting extended to non-property owners, the rights of property owners could be unfairly overruled. In the end, they left the question of voter rights to the individual states. Now, nearly 240 year later, with suffrage extended to all citizens, with or without property, the question remains:
“Do elections affect property owners differently than non-property owners?”
Nearly every municipality imposes property taxes on homeowners for, well, owning homes (and other property). The tax authority typically bases these taxes, or mill levies, as a percentage of the assessed value of the property owned. Proceeds from levies on property fund local services including:
- Law enforcement
- Roads, bridges, street lights, and other infrastructure
- Public schools
- Emergency services
- Debris and snow removal
Each locality and school district sets the property tax rates each year to meet the needs of that community. This means that tax rates vary widely from one municipality to another, and even between neighborhoods. They can increase each year, or may even decrease. For homeowners, voting for or against a levy affects property owners in two ways:
- The actual tax increase affects a property owner’s bottom line. Yearly property tax increases might push the cost of owning a home higher than the owners plan, or higher than their income can bear. Putting stress on property owners’ financial situation may make it more difficult for them to maintain their property. Homes in distress can bring down the value of an entire neighborhood.
- When homeowners vote to increase levies—such as those that provide local services, upgraded roads, improved schools or increased emergency personnel—they are voting to increase the value of their homes and communities, making them more attractive to buyers.
Voting for or against levies is a delicate balance between increasing an owner’s outgo with increasing the property’s value and the community’s desirability. Researching the fiscal impact of the levy you intend to vote on is an important first step in determining how it may affect your bottom line.
Taxes based on the sale of goods typically spread the burden of the tax across both property owners and non-property owners. Sometimes, however, a sales tax increase is for a specific neighborhood or commercial area. If you own property in an area with a higher sales tax rate than one nearby, it can determine how easily you keep your space leased to shop owners since customers may choose to shop elsewhere.
If you are new to home ownership, increases in sales taxes make purchasing furnishings and appliances more expensive. If you are considering upgrades and improvements, renovations or additions, a tax increase may expand your scope costs.
Taxes specifically affecting homeowners include those like the one embedded in the Affordable Care Act. It taxes the capital gains income of upper-bracket homeowners that sell their home at a sizable profit and even taxes rental income from investment property.
Decisions by both national and local elected officials—from state senators to congressional representatives, governors to county commissioners, city council members to school board members—impact the future levies imposed on local property. Knowing your candidates and how they hope to legislate their agenda can affect both your bottom line and your property values.
Not only are elections about national and state officials, international and social concerns or party platforms—they are about local schools, streetlamps, parks and 911 services.
Do not leave decisions that affect property ownership to others. Take the time to vote in your local and national elections. Balance how a levy can affect your immediate bottom line with the impact it might have on the sale of your property in five years.
Compliments of Rudy Kubasta