Several years ago, an Austin American-Statesman reporter, Lori Hawkins, covered a gathering of several hundred Austinites who’d met to vent their frustrations over surging property tax bills and to express concern that they’d “soon be priced out of their homes.” Rather fortuitously, Hawkins interviewed an Austin homeowner in attendance, Gretchen Gardner, who inadvertently revealed some flaws with the state’s system of voter-approved debt.
Like many in attendance, Ms. Gardner couldn’t understand how Austin’s property tax crisis had come to be nor what she could do about it. To that very point, Gardner infamously told Hawkins that:
“I’m at the breaking point. It’s not because I don’t like paying taxes. I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore.”
In just those few, short sentences, Gardner communicated a lot about government debt and property taxes.
First and foremost, Gardner’s comments revealed that she, as a voter, wasn’t making the connection between new debt and new taxes. For whatever reason, she hadn’t reconciled the fact that every new government project had to be paid for somehow and very often those costs had manifest in her property tax bill. Thus, with every ‘YES’ vote she had cast, Gardner was abetting her own affordability crisis.
Her comments were also indicative of the success of government word-games. That is, when a governmental entity proposes a bond, it will very often tell voters that taking on this new debt won’t mean a change in the tax rate. That’s factually accurate but it’s also misleading. What the governmental entity doesn’t tell the public is that holding the tax rate steady in an environment of soaring property values will mean paying much higher taxes. The two variables, i.e. tax rates and property values, should have an inverse relationship meaning that as one goes up, the other should come down so as to keep tax bills reasonable. But when one stays constant and the other one climbs, then property owners see their tax bills grow.
So this election season, remember that your vote has consequences. Government projects aren’t free and, more often than not, they are paid for with higher taxes. Sometimes that increased tax burden is worth it; sometimes it is not. But it is almost always a part of the equation, and voters should go to the ballot box knowing that fact.