Tue
May 27 2014
03:34 pm
Commissioner Amy Broyles proposes property tax increase
By: R. Neal

The 21 cent increase would raise $21 million for county employee raises, including a 3% raise for teachers.

UPDATE: Tax increase defeated 9-2 (Broyles, McKenzie voted for). Mayor Burchett's budget passes 9-2 (Broyles, McKenzie voted against).

Topics:
reform4's picture

The numbers

Submitted by reform4 on Tue, 2014/05/27 - 3:45pm.

Note that the rate is per $100 of assessed value, and assessed value is usually 25% of market value.

So, for a house in Knox County valued at $100,000 (assessed at $25K), the increase in taxes would be $1 per week.

That's not even a soda at Pilot. Well, a bottled one, perhaps a fountain drink.

KO's picture

What basis do you have to say

Submitted by KO on Tue, 2014/05/27 - 3:57pm.

What basis do you have to say assessed value is usually 25% of fair market value?

Somebody's picture

(link...) Scroll down to "The

Submitted by Somebody on Tue, 2014/05/27 - 4:15pm.
(in reply to KO)

(link...)

Scroll down to "The Assessment Process." Residential and farm properties are supposed to be assessed at 25% of appraised value. You could argue about the relation of appraised value to fair market value, but this would be the basis.

Mike Cohen's picture

Assessment

Submitted by Mike Cohen on Tue, 2014/05/27 - 4:43pm.

Steve is absolutely right about the 25% assessment.

For residential.

For businesses the rate is 40%, so the impact is much bigger for businesses.

Mike Cohen's picture

Business

Submitted by Mike Cohen on Tue, 2014/05/27 - 6:23pm.

I don't know if that is actually the case, Toby.

2/3 of the county budget goes to K-12 education. Business really doesn't consume that.

The next biggest chunk of public safety and they probably do consume their share of that. Not sure if they use a large share of that. Certainly a lot of crimes are committed against businesses (that's where the money is) so they probably do, although people robbing them is hardly their fault.

So what resources do you think businesses consume a lot more of...of that roughly 34% of the budget that isn't K-12 education? Not saying you're wrong, just not sure what the expenses are.

fischbobber's picture

Um, say what?

Submitted by fischbobber on Tue, 2014/05/27 - 11:15pm.

2/3 of the county budget goes to K-12 education. Business really doesn't consume that.

Are you telling me that businesses don't care if their employees can read and have a fundamental grasp of grammar, math and social sciences? Businesses are the primary consumer of K-12 education, especially in a minimum wage economy.

You missed on this one Mike and rethinking your point would be to your best interest. This tax increase is the smart move and undoubtedly in the best interest of business even beyond the benefit that parents would view it as.

Mike Cohen's picture

Business and taxes

Submitted by Mike Cohen on Tue, 2014/05/27 - 11:42pm.
(in reply to fischbobber)

Of course businesses depend on a quality education system. We all do.

I was not reacting to the Broyles proposal, simply to Toby's assertion that businesses, who's property is taxed at 40% of assessed value instead of the 25% for residential, "consume many more resources."

I'm not sure that's correct.

I used to work for the schools. My future daughter in law is a teacher (West Haven) and I regularly donate time for some education related stuff.

It is in everybody's best interest to have the best education system possible. When I worked at the schools I used to challenge people to find a similar sized system (40-70k) that serves all three distinct populations (urban, suburban, rural-each has different challenges) that did as well or better on standardized tests and spends less per pupil.

I don't believe one exists.

It is equally difficult to find a high achieving school system that does not spend substantially more.

The challenge, obviously, is balancing that with the political desires of the population that pays the taxes...especially in a community where we get such a lower percentage back from the state. Few systems in Tennessee fund more of the local school budget form local resources than we do. And for many of our important offerings---AP courses, music, art---the BEP doesn't contribute a cent. It is 100% local funding.

On top of that because we are a bigger more sophisticated system many families with special needs kids in the more rural counties move here. Hell, I would if I was in that position. The feds put in the Special Ed requirements promising 40% federal funding. I don't think they have ever hit more than 15-20 percent. So that's another local cost.

I wish it were a simple task to get more education funding, but it isn't. It needs to be dealt with at the state and federal level as well as local.

Mayor Burchett has been very clear about his fiscal viewpoint and plans and he has won overwhelming support.

Sorry for the rambling post. But my first post was simply reacting to Toby's assertion, not to the need for funding.

fischbobber's picture

Consuming resources

Submitted by fischbobber on Wed, 2014/05/28 - 12:48am.
(in reply to Mike Cohen)

I wasn't trying to set you up or call you out, but it's important to remember that we don't pay much in the way of taxes around here, and that businesses do consume the lion's share of the resources.

My point was that Broyles tax proposal was both needed and fair and that businesses would benefit beyond the scope of the tax increase.

As a parent I have the option of spending more on my child's education in the form of extracurricular activities and additional educational experiences. As an employer, I am dependent on the county's educational decisions. The parent and county are education providers, the employer is the consumer. And as for trash service, fire protection, police protection, road maintenance etc., businesses are definitely the prime and primary consumer. It's just how we do things around here.

Mike Cohen's picture

Businesses

Submitted by Mike Cohen on Wed, 2014/05/28 - 6:26pm.
(in reply to fischbobber)

Explain to me how businesses consume the lion share of the taxes?

I think education rests on everybody, the general public as much as business.

How do they consume a big share of all the other stuff?

Min's picture

Also..

Submitted by Min on Thu, 2014/05/29 - 6:08pm.
(in reply to Mike Cohen)

Tax dollars allotted to education are used to buy products and services provided by local businesses--food and equipment for cafeterias, sports uniforms and equipment, sheet music and musical instruments, gasoline, cleaning suplies, first aid kits, books, videos, A-V equipment, computers, school-branded merchandise, etc. So select businesses do consume tax dollars in addition to simple use of infrastructure and public accommodations.

fischbobber's picture

Toby is right on this one

Submitted by fischbobber on Wed, 2014/05/28 - 9:43pm.

Taxes provide businesses both an educated workforce and a market. They provide the infrastructure needed to access the business by the customer as well as the infrastructure necessary to access and distribute their product. Taxes provide the services necessary to operate in a stable, safe environment. In addition, taxes (and in lieu of situations) actually provide the capital necessary to operate and reap obscene profits, all at historically low tax rates for the businesses in question. That's how they've been able to afford the giant P.R. campaign putting forth the big lie that they are overtaxed.

Mike Cohen's picture

Business tax

Submitted by Mike Cohen on Thu, 2014/05/29 - 9:27am.

I think it is unfair to say that business is more responsible for more than their share of the cost of education.

Remember, a business is taxed at 40% of assessed value, residential at only 25%. Which is fair, but it means they are paying more.

The infrastructure government build benefits everyone.

Businesses also generate all the sales tax income.

Not complaining or arguing about any of that....other than to say that I don't believe the consume an unfair amount of the resources vs what they pay and generate.

reform4's picture

Huh?

Submitted by reform4 on Thu, 2014/05/29 - 4:52pm.
(in reply to Mike Cohen)

So, you're arguing that businesses are paying more because of the higher assessment rate. That's fair.

But then this:

Businesses also generate all the sales tax income.

Um... but if we're talking about who pays taxes, then a comparative statement is that the citizens are paying a vast majority of the sales taxes, because of our regressive tax system.

Apples and apples....

fischbobber's picture

Businesses also generate all the sales tax income.

Submitted by fischbobber on Thu, 2014/05/29 - 9:36am.

I've got a ton of receipts lying around my house that say I pay it though.

Fair tends to be in the eye of the beholder. The Koch Brothers believe our current wage scale and system of labor measurement is fair. I disagree.

Mike Cohen's picture

Taxes

Submitted by Mike Cohen on Thu, 2014/05/29 - 11:29am.
(in reply to fischbobber)

I agree...the wage system is screwed up.

We just disagree about who benefits from our local taxes. I don't think business chews up a giant portion of it.

fischbobber's picture

To quote Dr. Harold Black

Submitted by fischbobber on Thu, 2014/05/29 - 10:33pm.
(in reply to Mike Cohen)

"It's certainly your right to think that. You are wrong of course, but you have a right to your opinion."

He is an absolutely marvelous storyteller and conversationalist.

reform4's picture

Viewpoint of a business owner with employees

Submitted by reform4 on Fri, 2014/05/30 - 7:44am.
(in reply to fischbobber)

Or, my wife's favorite quip: "Well, I could agree with you, but then we'd both be wrong."

Business does benefit financially and directly from a locally trained, educated workforce. The cost required to find an out of town worker, interview multiple candidates from out of town to find that worker, and the cost to move that worker (or offer a salary incentive to cover the moving cost the worker experiences) are quite significant.

If a business can't find enough workers locally and find themselves always having to go out of town/state to hire them, they will just move. I've seen a 100-person high-tech company with good ($70K average salary) jobs move out of Knoxville (and TN) for that exact stated reason. They couldn't find the workforce they needed here.

My last two hires of degreed employees? Neither were UT graduates. In fact, one came from the aforementioned high-tech company when he couldn't move from Knoxville (e.g., they were the ones that got to pay to move him here). Otherwise, I would never have found him. If I saw big hiring expansions in my future, I would not be staying here. It wouldn't make business sense.

There is not enough investment in education to support good paying jobs here. Low-wage jobs? Sure- if the goal is to make TN compete with China, they are succeeding. If that's all they care about, then yes, maybe they are not 'consuming' the benefits of education.

If you think investment in education and business / economic development (good paying jobs, that is) are not linked, then you need to get behind the steering wheel of a company for a few years. Finding the right people is difficult here.

bizgrrl's picture

Finding the right people is

Submitted by bizgrrl on Fri, 2014/05/30 - 8:33am.
(in reply to reform4)

Finding the right people is difficult here.

I agree. If I was looking for a high-tech job, I would not expect to find one in this area. Just the other day someone was asking me about jobs for their son in this area. He is in the high-tech industry in Illinois. I suggested to her that this would not be the place to come.

Education is important. In this area though, it could take years to get the reputation of having qualified workers. There are so many other areas in the country that have the better workforce. The competition will be hard to beat.

Mike Knapp's picture

If the county doesn't...

Submitted by Mike Knapp on Fri, 2014/05/30 - 1:14pm.

Then will Tim Burchett and those who voted no go to the mat with the governor, other state representatives and senators most of whom are Republicans to specify the changes that are needed to improve BEP formula to better fund Knox County public education? In my view resources are needed at the classroom level and other areas as well. These are not items that will be delivered by cutting the PR department and other fantasies that people have about all the fluff in the Knox County school budget.

going back to Abrams Creek with a fixed bike tire see you later.

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