For the last few years, I’ve been breaking down the property tax I pay by recipient. The actual tax rate in my particular district rose by 2.84 percent; it’s the highest ever, or at least the highest since the beginning of the County Assessor’s online list, but not by much. Here’s who’s getting what, with what they got last year in brackets:

• City of Oklahoma City: $141.26 [$142.27]
• Oklahoma City Public Schools: $548.87 [$524.90]
• Metro Tech Center: $136.58 [$138.15]
• Oklahoma County general: $107.23 [$110.34]
• Countywide school levy: $36.60 [$37.02]
• County Health Department: $22.90 [$23.17]
• Metropolitan Library System: $45.97 [$46.50]
• Total: $1039.41 [$1022.34]

Note that with one exception, everyone is making do on slightly less than they got last year.

The individual millages for each of these are listed here.

The hardest thing for some of us to get our minds around has been that there exists no Law of Conservation of Equity: if it’s reduced at Point A, there is no Point B at which it must therefore increase. There’s still a lot of it out there — $6.2 trillion, said the Federal Reserve at the end of June — but six years ago there was over $13 trillion. That’s one hell of a vanishing act.

Still, not everybody is underwater yet:

Roughly one of every three homes is mortgage-free, according to federal and industry estimates.

Among owners who have mortgages, according to CoreLogic, 48.5 percent of them have at least 25 percent equity stakes in their properties. Roughly a quarter of owners with mortgages — 24.6 percent — have more than 50 percent equity.

At the other end of the spectrum, 22.5 percent of owners are in negative equity positions, burdened with houses worth less than their mortgage balances.

According to the county assessor, the value of the palatial estate at Surlywood dropped by a percentage point this year, but the amount due on the mortgage went down more than that, so technically my equity position has improved by a smidgen: about 27 percent, putting me pretty close to the 50th percentile. Property-tax rates won’t be released until later this month, but I anticipate about a 1-percent increase — which would leave my tax bill for this year at pretty much where it was last year. Then again, my mad prediction skillz have been fairly questionable of late.

The usual suspects are effusive in their praise for what was House Joint Resolution 1002, which puts a measure on the ballot to change the existing property-tax cap from five percent to three percent. An example thereof:

State Sen. Jim Reynolds was effusive this morning (Wednesday, April 20) after passage of House Joint Resolution 1002. By a vote of 77-16, with five members excused and three taking constitutional privilege, the measure sailed through the House of Representatives. The final overwhelming bipartisan majority approved sending the constitutional measure to a statewide vote of the people.

If passed by voters, the proposal will limit property tax increases to 3 percent of fair cash value.

Well, actually, no, it won’t. Like the previous 5-percent cap, this measure imposes a limitation on the increase in taxable assessed value. It has absolutely nothing to say about the tax rates themselves, which will continue to be set exactly as before. If you happen to live in, say, the Crutcho school district in Oklahoma County, the tax rate went up 20.4 percent this past year, mostly due to a $1 million bond issue passed last year by eleven of fourteen actual voters. The tax rate in my own area, by comparison, went up just under 0.8 percent.

I’m guessing someone lent Jim Reynolds a hat to talk through for this:

“At the 5% cap, property taxes essentially double every 14 years. With this new 3% cap, it will take at least 24 years for taxes to double.”

At least he knows the Rule of 72, which puts him a notch above some of the innumerable innumerates who seem to get themselves elected these days. The facts of the matter, though, from someone who’s done the homework:

Since I’ve been here, the market value of the house has risen by a third; the tax rate has bobbed up and down, and while 114.33 is the highest it’s been, the lowest (for 2008) was 106.08, so we’re talking a fairly-narrow range here. The [Oklahoma County] Assessor’s online records go back to 1983, at which time the tax rate was 83.63; the tax rate has therefore risen 37 percent in 37 years. Market values, of course, have risen faster, especially considering that the local real-estate market in the early 1980s was in a deep, dark hole.

Leonard Sullivan, who is the Assessor for Oklahoma County, understands the rule. I understand the rule. I’d like to think there’s at least one more person in this state who understands the rule. I suppose I’ll find out when this shows up as a State Question in 2012.

Tulsa County Assessor Ken Yazel wants you to know that if the legislature passes one of its property-tax limitation measures, it doesn’t mean your taxes will quit going up, which regular readers of this site know already.

That much is pretty well indisputable. But then he comes up with this:

Yazel said lowering the cap on property valuations wouldn’t benefit poor or middle-class homeowners because it does not address the real issue — the growing demand for property tax money.

“If I constrain a taxable value for a home in an area that is going up 14 or 15 percent a year, I no longer have as much value in that rising neighborhood,” so the millage rate — which affects the entire area — will have to be increased to raise the funds needed, Yazel said. “So we’re shifting the fair share, if you will, to the people who live in the neighborhoods that do not go up.”

In other news, there are supposedly areas in Tulsa County that are increasing in value 14 or 15 percent a year.

(Via Mike McCarville.)

For the last couple of years or so, I’ve been breaking down the property tax I pay by recipient. This year, no doubt inspired by my initiative, the County Treasurer is doing the math and enclosing the details with the annual tax statements, so here are his numbers for 2010, alongside my numbers [in brackets] for 2009:

• City of Oklahoma City: $142.27 [$130.71]
• Oklahoma City Public Schools: $524.90 [$517.11]
• Metro Tech Center: $138.15 [$136.73]
• Oklahoma County general: $110.34 [$113.81]
• Countywide school levy: $37.02 [$36.64]
• County Health Department: $23.17 [$22.92]
• Metropolitan Library System: $46.50 [$46.02]
• Total: $1022.34 [$1003.94]

The individual millages for each of these are listed here.

This is the time of year when we start anticipating our property-tax bills and the Trepidation Meter starts deflecting rightward. We already know what we’re going to be taxed on — the Assessor publishes the taxable values in the spring — but the actual tax rate isn’t determined until fall.

And while they haven’t published the rate yet, a little down-digging into the Assessor’s Web site turns up a place where the new rate is already in use, and in my district it’s 114.33, up from 113.44 last year. This will increase the taxes on the palatial estate at Surlywood by $18.40.

Since I’ve been here, the market value of the house has risen by a third; the tax rate has bobbed up and down, and while 114.33 is the highest it’s been, the lowest (for 2008) was 106.08, so we’re talking a fairly-narrow range here. The Assessor’s online records go back to 1983, at which time the tax rate was 83.63; the tax rate has therefore risen 37 percent in 37 years. Market values, of course, have risen faster, especially considering that the local real-estate market in the early 1980s was in a deep, dark hole.

Last year, about this time:

Because of the cap rule, during periods when valuation increases, taxable market value lags assessed market value by several percentage points; but there’s no mechanism to push taxable value back down again unless the assessed value drops low enough to take up all that slack.

The County Assessor has now sent out the Notice of Change in Assessed Value, and it appears that all the slack has now been taken up, at least on the palatial estate at Surlywood, the taxable value of which has been deemed to have increased by a mere $834. At the current tax rate, this will cost me an additional eight bucks or so in property tax when the bill comes out this fall.

I mentioned earlier that the tax on the palatial estate at Surlywood had jumped up a bit for 2009, mostly due to an increase in the actual millage, since the value on which the tax is based didn’t go up a whole lot. It occurred to me that this might cause a substantial upward adjustment (current euphemism for “frickin’ ginormous increase”) in the monthly outlay, and since the mortgage holder normally calculates these things in March, I figured I’d send in the March house payment with an extra $250 or so to keep the escrow account from looking like a Federal deficit chart.

Score this as a temporary Connivance Fail. The payment duly arrived on the first of March, as it’s supposed to, but they ran the escrow analysis on the 27th of February. Which was a Saturday, and since when do bankers work on a Saturday?

Oh, well. When the property tax goes up for this year, as I assume it must, I’m prepared.

Last year I put up an itemized list of where my property-tax money was going, according to the County Assessor’s official breakdown, and I figured I’d do it again this year. Figures in [brackets] are for last year, and they’re of course lower.

• City of Oklahoma City: $130.71 [$125.46]
• Oklahoma City Public Schools: $517.11 [$439.83]
• Metro Tech Center: $136.73 [$129.49]
• Oklahoma County general: $113.81 [$94.29]
• Countywide school levy: $36.64 [$34.70]
• County Health Department: $22.92 [$21.71]
• Metropolitan Library System: $46.02 [$43.58]
• Total: $1003.94 [$889.06]

This is about as much as they could raise it without running afoul of either the cap law or the patience of the taxpayers, and I’m not so sure about the latter, especially since the notices haven’t gone out yet.

The actual rate chart is here. Many of the individual levies are actually the same as last year, though the OCPS levy is up 11.3 percent.

Last year’s Oklahoma County property-tax rate, in my particular sub-district, was 106.08; this year it’s going up a little more than a tad, to 113.44, which is the highest it’s been in a quarter-century, though barely more than it was in 2002, at 113.33.

This will push the tax on the palatial estate at Surlywood to just over $1000. (It was a shade under $900 last year.) The rate two years ago was 110.42.

Percentagewise, I’m getting about the same hit as Jerry “Iceman” Butler: about 11 percent. Then again, he’s in the Rock and Roll Hall of Fame, which I’m not.

Something is rotten in the state of Indiana, reports Roberta X:

I discovered my (new) home lender, the guys who picked up Countrywide (who’d bought the note from my original lender), reviewed my real estate taxes (which are just plain nuts in Indiana of late and did go up — should drop next year, once my various exemptions finally kick in) and decided, oopsie, they didn’t really think they had enough in escrow and cranked up their reserve to the maximum amount permitted by law; so they have jacked up my house payments nearly 130% and to keep them from going up 150%, I’m gonna have to front ‘em something over $2K by 1 September.

This is my punishment for gettin’ a nice, conservative fixed-rate loan. Gee, thanks.

If I’ve read this correctly, it’s actually worse than it sounds, since Indiana bills twice a year, but one year in arrears, so Weasel & Co., which presumably has to pay big this fall, will continue to collect big toward a smaller tax bill for much of next year.

I suspect, though, they’d have done the same had our heroine somehow been duped into one of those wicked ARM schemes.

Funny, when my employer asked everyone to pleeeeze forgo a raise this year, times being tough and everything, we all went along; but ask government or a homelender the corresponding question and they’ve suddenly gone deaf. Umm, d000ds, don’t you think you have bled the middle-class turnip just about dry?

They’re in cahoots. Ask Chris Dodd, beneficiary of this sort of cahootery.

State Senator Jim Reynolds (R-OKC) has been seeking to tighten the cap on property-tax assessments for some time now; a 5-percent cap went into effect in 1996, but Reynolds wants it cut to 3.

He got some support at the Capitol yesterday: some 60 folks turned out to support Reynolds’ SJR 5, which has passed the Senate and now goes to the House.

A couple of Oklahoma County officials endorsed the plan, including Assessor Leonard Sullivan, whose staff would have to implement the change locally. And District 2 Commissioner Brian Maughan declared, “The county has enough money; we can afford the decrease.”

Assessments for tax year 2009, whether or not SJR 5 passes, are due by the end of this month. I calculate that the lower cap would save me around $20 the first year.

Perhaps this situation supports the case for what I’ve been calling an “emptiness tax”:

In Downtown Austin, blight manifests itself in the primary forms of:
1) parking lots (or razed lots)
2) parking garages
3) chain link fence
4) perpetual disrepair

The Northeast quadrant of Downtown Austin takes the cake for parking garages. The area is desolate and completely void of human interaction. Unimproved parking lots are scattered throughout Downtown. It could easily be argued that Downtown Austin blight reaches its zenith on 6th Street. (slideshow) Broken doors, windows, tattered chain link fence, destroyed ATMs, it’s all there.

As I see it, the problem of blight is rooted with the owner of the property that is creating or hosting the blight. The economic behavior of hoarding undeveloped property in the CBD is contrary to the density goals of Downtown Austin stake holders. It is also contrary to the city’s and county’s goals of collecting ad valorem taxes. Perhaps more importantly, razing your lot and wrapping it in chain link fence is contrary to the sense of community.

As an example, Marriott, while it won’t be building in the Austin CBD for a year or two, has already torn down a pair of storefronts on the location it plans to use, prompting this complaint:

Downtown Austin is pockmarked with vacant lots and surface parking lots. We badly need a mechanism for discouraging property owners from warehousing vacant lots downtown. The solution is not to shut out all redevelopment to eliminate the risk of this kind of behavior. What we need is a vacant-lot surcharge or something like it. A surcharge calibrated to compensate the other downtown property owners, businesses and visitors for the very real cost of blighting a block. This might encourage property owners/developers to leave existing buildings in place or to fill in currently vacant lots, even if the structures are inexpensive and small.

Whether such a surcharge would be legal is a question for another day…

Establishing a surcharge of this sort might be easier, at least on our side of the Red River, than changing the property-tax laws. If blight carries with it externalities, and I believe it does — at the very least, it imposes costs, in the form of lower property values, upon the blighted neighborhood — to me, at least, it does not seem unreasonable to call upon the owners of blighted property to provide some form of reimbursement for those costs.

(Title adapted from a photo caption at the first link.)

The Oklahoma Legislature doesn’t actually start its session for another week, but there are already lots of pre-filed bills, and some of them, unsurprisingly, overlap. There are at least four bills so far to trim or remove the sales tax from groceries:

• SB 42 by Sen. Jay Paul Gumm (D-Durant)
• SB 304 by Sen. Debbe Leftwich (D-OKC)
• SB 318 by Sen. Mike Mazzei (R-Tulsa)
• SB 600 by Sen. Randy Brogdon (R-Owasso)

The Gumm and Leftwich bills kill off the tax entirely. Mazzei’s measure would phase it out over a five-year period. Brogdon’s would kill the state portion, but leave city and county levies in place. (Under current law, any sales-tax exemptions must apply at all levels.)

There are also two bills to reduce the present five-percent cap on yearly increases in the assessed value of real property. SJR 7 by Sen. Debbe Leftwich would cut it to 3 percent; SJR 5 by Sen. Jim Reynolds (R-OKC) would cut it to the lower of 2.5 percent or the rate of inflation.

And there are measures to freeze in place the most recent income-tax cuts, though I didn’t see any to cut the tax further. (Perhaps it’s just as well, since the state isn’t exactly going to be rolling in money for a while.)

In late December I mentioned a proposal by Bill Hudnut of the Urban Land Institute for a two-tiered property-tax structure that taxed vacant land at a higher effective rate than developed land, reasoning that the higher tax would spur development.

This Market Urbanism post says that a Hudnut-like scheme would be beneficial in the short run, not so much in the long run:

Speculators essentially hold the land until development is optimal for the site, and all sites cannot optimally [be] built at once. Discouraging speculation drives the land into the hands of developers at cheaper prices than current market prices.

At the same time, all the new developers will compete … for users of the space they build on the vacant land in reaction to the new tax regime. This either means they’ll build smaller in anticipation of the glut of new development, or vacancy rates will be much higher.

De rigueur Jane Jacobs reference:

[The proposal] will harm the diversity of building age that Jane Jacobs claims as a key ingredient that makes for great cities. The stock of buildings will be disproportionately represented by buildings built shortly after the tax scheme is enacted. As new development occurs, affluent people will be attracted to the developing areas. As these buildings depreciate, the more affluent will relocate. Without enough diversity, over a long period of time a neighborhood will be predominantly lower-class residents.

And an alternative scheme is proposed:

I do favor some regional, state, or other tax based upon acreage. (if offsetting income tax or other productivity-stifling taxes) However, I would implement the tax to discourage sprawl, not to discourage speculation. Thus, I would tax each acre equally, whether developed or vacant.

The one thing both proposals have in common is separating the tax on the actual land from the tax on whatever structures may have been built on it, which seems a rational approach: you can always replace a building, but they’re not making any more land. (Well, there’s always the Dutch, but they have other motivations these days.)

Many cities are wondering just how they can spur development in their central zones without turning them into Xerox copies of the suburbs. Bill Hudnut, senior resident fellow and Joseph C. Canizaro Chair of Public Policy at the Urban Land Institute, suggests a two-tiered property-tax structure:

More tax on those horizontal pieces of empty land and asphalt, less on the buildings. That is, reduce the tax rate on homes and other improvements, and substantially increase the rate on the site value…

[I]f assessments are fair, the higher land tax would bring vacant or woefully under-used central sites into use, giving new life to inner cities and reducing sprawl. It would also stem land speculation, which is the big engine behind house price escalation, thus stabilizing neighborhoods and keeping sale prices and rents more affordable. The land tax returns to government — the values it creates with bridges, roads, and other infrastructure — helping to pay for maintenance and necessary improvements.

There are those who rank surface parking among the Great Evils of central-city development; were such a system as this in place, the temptation to put down a slab on a vacant lot, then sit back and collect rent, might well be reduced.

I noted earlier this year that our county assessor is now specifying land values on individual tracts as part of the records accessible to the public. Could this be an indication that they’re thinking about eventually moving to a two-tier system? Maybe not: the assessments are set by state law, not at the county level. Still, if this is the future of property valuation, better to be prepared for the transition.

County tax assessments are out, and I can use this paragraph all over again, almost:

Under the 5-percent cap law, the assessed value can go up by a maximum of 5 percent per year, regardless of actual market value, unless there is a change in ownership or a substantial change in the property itself. And the market value, they estimate, has risen a little more than 11 percent a shade less than 6 percent this year; however, the assessed value has risen by — wait for it — 4.998 percent. (Remind me to hire these people next time I need hairs split.)

Still, this beats the hell out of all those the declining values they keep whining about on the news.

Let’s see how many of the folks who complained about Oklahoma City’s “NBA Tax” offer even the slightest criticism of this:

The District [of Columbia] has negotiated a $40 million deal with National Public Radio to keep the company’s headquarters in the city, granting tax abatements over the next two decades and edging out a bid by downtown Silver Spring.

Imagine that: cities competing against one another. Whoever heard of such a thing?

Forty years after taking root in Washington, NPR will build a 10-story headquarters at 1111 N. Capitol St. NE., Mayor Adrian M. Fenty said [Wednesday]. The site, a warehouse of the former Chesapeake and Potomac Telephone Co., will feature a 60,000-square-foot newsroom in the up-and-coming NoMA community, the neighborhood north of Massachusetts Avenue near Union Station….

Neil O. Albert, deputy mayor for planning and economic development, said that NPR will not pay property taxes on the building for 20 years, saving $40 million. The city has agreed not to raise property taxes by more than 3 percent on the station’s Massachusetts Avenue building for two decades, or until NPR sells it.

Now that’s what I call a sweet deal. And you know, there’s something sort of comforting in the notion that soft-spoken NPR has some hard-nosed negotiators; it’s almost as if they operate in the Real World or something.

(Via Fraters Libertas.)

As I’ve mentioned a few times already, we have a property-tax assessment cap in this state: the assessed value can go up by a maximum of 5 percent per year, regardless of actual market value, unless there is a change in ownership or a substantial change in the property itself.

Senator Jim Reynolds (R-OKC) has been pushing for a lower cap, and this is as close as he’s gotten so far: the Senate, by a 25-22 vote, passed Reynolds’ Senate Joint Resolution 59, which would create a ballot measure to set the cap at 3 percent.

Now I never met a tax cut I didn’t like, even if it’s not really a cut but a slowing of the rate of increase, but this perplexes me somewhat:

“This legislation came straight from my constituents who are begging for relief from increases in property taxes,” said Reynolds. “This is an especially burdensome tax for many low-income and older people in my district and throughout Oklahoma.”

Reynolds said the five percent cap on property value assessments was supposed to limit yearly increases, but it has not worked in the way property owners thought it would.

Weird. It’s worked exactly the way I thought it would.

What I really want to know is this: what am I going to do with a whole two percent? On my somewhere-below-$100k house, this is about a buck ninety a month. I’m spending that much on a frickin’ basketball team.

Not that I’d turn it down, but I’m wondering if maybe it might be more pertinent to Reynolds’ stated position to legislate some exemptions for those who are feeling the pinch more than I am.

The new property-tax rate for my particular section of Oklahoma County is 110.42 mills, up from 109.81 last year, an increase of 0.56 percent. The rate has been wobbling around the 110 level for most of a decade, peaking at 113.33 in 2002. (The folks stuck with the highest rate in the county are those whose property lies in both Oklahoma City limits and the Piedmont school district: they will pay 129.44.)

This rate is reported as $110.42 per thousand of assessed value, which in this state is 11 percent of taxable market value. Zillow.com says the median home in my ZIP code is worth $96,967; a house worth that much would be assessed at 96967 x 0.11 = $10,666, and taxed to the tune of 10666 x 0.11042 = $1177.78, assuming no exemptions. (The most common exemption is the homestead exemption, which applies to those who actually live in the house they own; it knocks $1000 off the assessed value, hence $110.42 off the taxes this year.) Under the state cap law, the taxable market value cannot increase more than 5 percent a year unless the property is sold or substantially altered, and for the second year in a row, I report an increase of a hair over 4.99 percent, and therefore an overall tax increase of about 5.02 percent.

Side note: Two weeks ago I projected a tax bill of “$872 or so”; it will in fact be $876.07.