You'd think that fixing this problem would be a no-brainer, but that's where our psychosis takes firm hold. Hearings were first held on switching to a full-value property assessment in 2005, with a promise to get a new system by 2007. But fearing the wrath of homeowners who might see a change in their property-tax bills, Council and other city leaders have acted like Victorian maidens confronting the unseemly, and hav simply turned away.
The new system, which would provide accurate assessments of property values, is a year away. But the silly season has started early. Some are claiming that the city is going to use it to collect more money, as a "back-door property-tax hike." The evidence: In the city's five-year plan, the city has shown $86 million more in property taxes coming in beyond the two-year temporary tax hike that the city imposed to deal with its budget problems.
The crux of the current flap seems to be a long- held hope that this major shift would be "revenue neutral," that is, that the city would not be switching to a new system in order to make more money, but simply to make it fairer. That's a nice wish, but fatally flawed: How can revenue collected from a broken system be a benchmark to determine what the revenue should be once it's fixed?The promise of "revenue neutrality" suggests that we rig the system to reach an arbitrary number - i.e., revenue collected by arbitrary assessments.
The city says that its higher projections assume that the new system will capture rises in real-
estate values not captured in the old system.
