Mark Souder - The Best We Can Do I Guess

From a local paper:

The health insurance bill being written by congressional Democrats “will probably steer people to use public funds to kill themselves,” Rep. Mark Souder, R-3rd, said Thursday.

Souder conducted a wide-ranging conference call with northeast Indiana callers and e-mailers Thursday evening about the congressional debate on overhauling the health insurance system.

If you believe this then you are probably beyond help at this point. It’s one thing to challenge the merits of a proposal but it’s quite another to outright lie in order to scare constituents. But like I’ve always said, you get the government you vote for…

H/T - Reverent & Free

Health Care Brain Teaser

A while back I read an excellent post on health care costs that included the following chart but I don’t want to link to the post quite yet (I promise to give attribution soon enough). The reason is I want people to look at this chart and try to make sense of it. It shows the percentage growth in human health care costs have been matched by those in veterinary costs.

During this whole debate we hear a lot about the unsustainable growth in health care costs. Usually this is said to be caused by over-regulation, government subsidy, malpractice insurance, etc. But if that’s the case then how do you explain the rising veterinary costs? There is little regulation, no Medicare for pets, malpractice suits are essentially non-existent and if the care is too expensive then the patient is allowed to die.

It really does seem to shatter the conventional wisdom - more on this later…

Commercial occupancy rates in Fort Wayne

It should come as no surprise that commercial occupancy rates in the Fort Wayne area have decreased again. In 2008 in Fort Wayne 14.39% of commercial space was unoccupied. In 2009 in Fort Wayne the percentage increased to 16.44%.

This means all of the following:

Commercial values in the area have dropped since there is more unoccupied space (competition).
Rents in the area have decreased for the same reason.

Hopefully the Mayor and his staff realize this and if they decide to purchase new office space they will keep this in mind and ensure they offer a low price for any property they purchase.

Hopefully the state of Indiana realizes that if this trend continues all of the local commercial property will continue to drop in value; however, Indiana will still be collecting as much as 3% of the value of the property via property taxes.

Mike Sylvester

Property taxes paid on my office in Fort Wayne

I have received my property tax assessment for our portion of our office building. My wife and I purchased 1/4 of an office building maybe one mile from my house. Our office is located behind the Dupont Branch of the Allen County Public Library. The building is new and we moved into it in December of 2007. We had our portion of the building built to our specifications.

We truly like our building.

I received my property tax bill for our office. Please realize that:

The office was finished in December of 2007.
The office is about 2000 square feet.
It is an office condominium, we just own 1/4 of the building. (The rest of the inside of the building is unfinished and will be built out when a buyer purchases it)

My portion of the building was assessed with a land value of $44,700 and my portion of the building at $144,800 for a grand total of $189,500.

Quick Thought On Paying For Health Care Reform

President Obama is trying to find bipartisan support for health care reform but he’s going about it all wrong. Anyone who paid attention during the last 8 years knows that if Republicans can’t afford something then they simply pay for it through tax cuts.

I suspect a $1.5 trillion tax cut would more than pay for a new national health care system. Don’t worry, my logic is flawless…

I think a lot of people should appeal their property tax assessments

I am not an expert on property assessments by any means; however, this post illustrates how I think assessments work based on my research to date. I am not an assessor!

I feel that it is very important that those with over-assessed properties file an appeal and ensure that their property values are lowered to actual values. I think this is easiest shown with an example.

Lets say that Tom lives in the Fort Wayne City limits in Perry Township (Like I do). Lets say his sister (Mary) lives just down the street from Tom in an identical house (There are many additions where many of the houses are identical). Lets say this year both houses were assessed at $220,000. Lets say that due to the housing market both owners feel that an appraisal would show their house was worth $200,000 as of 12/31/08. In this scenario both homeowners would pay $3060 in annual property taxes in 2009 payable for 2008.

Lets say Mary decides to appeal her assessment while Tom elects not to. Lets say Mary spends $300 to hire an appraiser to give her a written appraisal of her home value. Lets say that appraisal comes in at $200,000 and that the Assessor lowers Mary’s assessed value to $200,000. This means that in 2009 payable for 2008 Mary will pay about $2,514.

More importantly this means that in the Assessors system Tom’s house (and land) will start at a value of $220,000 next year while Mary’s house (and land) will start at a value of $200,000 next year. Lets say that the next year the assessor decides that properties in Tom and Mary’s neighborhood have on average increased by 1% due to sales data. In this case this would mean that the Assessor would assign an assessed value of $222,200 to Tom’s house and $202,000 to Mary’s house.

Next year property taxes will be much simpler because houses in this price range will be limited by the property tax cap (at least in my location). Tom would pay 1% of $222,200 or $2,222 in 2010 payable for 2009 while Mary would pay $2,020 for that same period.

So in this example they would pay the following: Tom would pay $5,282 for the two years of this example and Mary would pay $4,534 for those same two years. Mary would spend $300 on an appraisal and she would pay $748 less in property taxes over this two year time period.

I think the assessor’s have to do an actual assessment every seven years; other then that they use sales data in the area of each property instead to generate an increase in the base price already in their system.

I think the Allen County Assessor does a good job. My posts on proeprty taxes are not in any way attacking our local assessors. Our assessments are mailed much sooner then in most Indiana counties and I think their office is professional and competent. I think the problems are with the Indiana assessment system not with the Allen County Assessor.

Does anyone reading this post disagree with anything in my example?

Mike Sylvester

Local Government $29 Million Short; Rep Win Moses in Denial

In a previous post I discussed the city’s looming budget crisis and thought that people were going to be shocked when they saw the revenue forecasts start to come in. Allen County auditor Lisa Blosser held a fiscal summit yesterday and local legislators found out how big the property tax revenue gap is likely to be - $29 Million.

I’m sure we’ll discuss this plenty over the next few months but right now I want to point out an incorrect comment made by State Representative Win Moses:

Moses also urged voters to educate themselves so they can decide how they want to be taxed.

“Gov. Daniels’ tax caps do not reduce taxes at all. They really shift who pays,” Moses said.

A tax cap doesn’t reduce taxes? Uh, then why will local government be receiving $29 million less revenue? Of course they reduce taxes in the aggregate, to suggest different is disingenuous, but they can also have the side effect of shifting who pays the most.

And people have educated themselves on taxes and my bet is they don’t want to pay any more than they are paying now. Maybe our current financial crisis hasn’t affected Moses’ pocketbook but many people are hurting. Asking to increase the regressive local option income tax is immoral in this economy.

Local legislators, including Moses, need to figure out what level of government services people really require and everything else needs to be scaled back.

Property Tax Bill

I received my residential property tax bill and I will have to appeal it; again…

Back in March of 2007 I hired a local appraiser for $250 to provide a written appraisal of my house (and land). That appraisal showed that my house was worth $211,000. This was significantly lower than the counties assessment and during the appeal process the county lowered my assessed value to $210,100 (I still have no idea why they lowered it to $900 less than the appraisal amount).

Per the county my land and house were assessed at:

$210,100 in 2007 after my appeal
$211,700 in 2008
$219,600 in 2009

The property taxes that we pay this year are assessed for calendar year 2008.

I doubt that the value of my house increased from 2007 to 2008 either; however, the increase was small enough to where it did not make sense to appeal it.

We are in the middle of the worst decline in housing prices in decades and somehow the Allen County Assessor feels that my house has increased in value. I have one acre of land and it has an assessed value of $51,200. This number has not changed by a penny over the last three years. In 2008 my house was assessed at $160,500 and in 2009 the assessment increased by 4.922% to $168,400.

So in summary during the worst slump in the housing market in decades the assessed value of my house increased by 4.922% in 2008.

There is absolutely no way on this planet that my house has increased in value in the current housing slump.

Note that I have made no home improvements or expansions to my house of any kind…

Last year I actually paid $2,453.80 in property taxes. This year the County is telling me to pay $3,048.52. This is an increase of 24.24%.

I will likely go and hire an appraiser to appraise my house again. Even if it costs me $300 to get an appraisal I imagine the appraisal will at most show my property value to be $211,000. I just do not believe that my property has increased in value at all since the last appraisal I had done in March of 2007. In fact; I imagine the value of my house has decreased. My tax rate is 3.1807% of the net assessed value of my property. If I appeal and if the Assessor lowers my house value to $211,000 this will save me $273.54 in property taxes this year alone.

It is my understanding that the County has divided Allen County into many smaller subdivisions and that each year they increase (or supposedly decrease) the assessed values by an increment based on home sales prices in each specific region. So by appealing my property taxes I feel that I am lowering the base they will use to assess my house next year; hence I am willing to invest the money to get a written appraisal again.

I just do not believe that my house has appreciated in value.

Have any of you received your assessment?

Mike Sylvester

Health Care Reform

I think this post must start with the statement that “the health care system in the United States is broken.“ I truly believe that our current system is broken for several specific reasons:

The cost of health care is rising far faster than inflation.
The Government run Medicare and Medicaid systems are rife with fraud and abuse.
The cost of health care is hidden in a complex web of government programs, insurance companies, and health insurance programs. It is almost impossible to determine how much you are paying for health care.

There are more problems with our current health care system; however, the above three problems are a good starting point.

Very Serious People Listen to Ben Bernanke

Even with Ben Bernanke’s lousy track record as an economic forecaster there are still people suggesting the Fed should be in charge of watching out for systemic risk. Unbelievable…