Schools and Property Taxes and Home Values

Local school districts face painful decisions as voters vent their frustration over rising property taxes. While voters reel over the ultimate effect of yo-yoing energy costs, for example, how are they most likely to respond in the ballot booths?

The upcoming operating levy for the Hilliard (Ohio) City School District will be an important case in point for 2008 and beyond, as the district has been relatively fortunate through the past 15-20 years in passing various levies and bond issues. Opening a third high school in 2009 takes us back to 1997 and the addition of the district's second high school....as a formerly "rural" or outlying district found things changing quickly, with many longtime residents wondering what (and who) was responsible. That scenario has been repeated across central Ohio, and other districts have found it much more difficult to get voters to say yes....Canal Winchester appears to be in one of those "close but only almost" cycles that others have struggled with. There's no doubt that a successful campaign will be more difficult to achieve amidst the bad economic blues news that now surrounds us.

Are schools wandering spendthrift paths, and should they be more fiscally and educationally accountable? The first answer is probably a matter of perception, and which news sources one relies upon. The second is a simple yes, but complicated at that.

What´s been referred to as a national property tax revolt is easily understood from either side of the tax billing. Local governments are asked to do more with less, and population growth stretches things further. At the same time, our expectations tend to be higher3;we´re less willing to accept what used to be considered adequate services. This, too, is a not unexpected result of a consumer-based economy.

Governing bodies read the same headlines as the general public. Housing prices have risen dramatically3;.and, of course, have continued to fuel the economy. The bearers of the tax codes simply decide that if property assessments more closely reflect actual market values, then all is fair. But what about those who have no near-term intention of capitalizing on the increased value of their property?

It´s been noted that ever-increasing property taxes are unfair because they are taxes on unrealized gains. But "unrealized" here is purely an accounting term, and applicable only if gains cannot be accessed. In the case of increased home values, legions of homeowners have tapped their rising equity to acquire other things they need3;or simply want. During the recent economic slowdown, it wasn´t business that supplied most of the fuel for the economy3;it was individuals, taking the "profits" from their homes.

And it´s also important to consider just what it was that drove up home values. Any number of factors can be cited, but ultimately it´s a matter of supply and demand, right, and that old cliché "location, location, location"3;.? Yes, but in many if not most communities it´s primarily a matter of schools. Good schools at the very least prop up the value of community real estate.

What about senior citizens, or those on fixed incomes? Aren´t they being blindsided and driven from their homes and neighborhoods? Again, the answer appears simple but the changing nature of our economy requires more thought and research. Reverse mortgages allow anyone to tap into the increased equity in their homes; it´s a topic you can find often in publications directed at seniors, not just something the local banker peddles.

When school levies and bond issues fail, there´s no shortage of rhetoric on the editorial pages. Certainly in Ohio, the biggest target is state funding. Does the overall formula need to be revised? No doubt. Is there a magic one-size-fits-all answer?

Let students be satisfied with less, we often respond. Why should taxpayers be forced to pay for extracurricular activities? OK, good question, and it begs another3;.why should taxpayers have been forced to pay for the extracurricular activities we adults enjoyed through our school years? Each generation owes the next a boost of vision, opportunities and confidence. The things we benefited from in school were likely better than those our parents and grandparents had.

In the interest of full disclosure, it should be noted that I served on the Hilliard (Ohio) City School District Board of Education during the mid-late 1990´s, when Hilliard was the state´s fastest-growing school district, and also currently serve on the volunteer Financial Advisory Committee. I´ve also taught both high school and college, and readily empathize with those who teach and those who administrate. We ask more and more of them as days progress, and their average or median salaries tend to lag behind what they often could earn outside of education. Those who do the job well also carry it home with them nightly; consider trying to fall asleep to thoughts of any number of students´ needs, performance and oh-so-varying personal and family situations.

Should we expect them to be the best they can be? Yes, that´s a valid expectation, but it´s only with the community´s true encouragement that it´s likely to be fulfilled. Too often today, we allow simple complaining and agenda-driver criticism to masquerade as interest and support.

©2008, Doug Parker, ikarensell Enterprises Inc. http://www.ikarensell.com