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Wealth redistribution reappraised
(by Dave Lange - October 04, 2012)
Wealth redistribution reappraised
When it was revealed a month ago that the latest Cuyahoga County property appraisals showed values shooting through the roofs for homes in Chagrin Falls and other upper-income communities, there were questions about how that happened. Thanks to some journalistic digging and solid reporting by the Cleveland newspaper, we now know why.
Many of the most expensive properties in the county previously received substantial tax breaks based on artificially low values established under the administration of former Cuyahoga County Auditor Frank Russo, who remains a free man after being convicted of corruption nearly two years ago. It’s often said that there’s honor among thieves.
Well, it’s not exactly thievery when citizens request and receive reductions in their property valuations, even though some of them may know full well that their homes are worth more. But it is a crime against society when the office of an elected political leader gives away $1.4 billion in such reductions through informal reviews, as Mr. Russo’s did in 2006 and 2009, and approves 98 percent of such reduction requests without requiring any justification, as it did in 2006.
This apparently is a case of strange bedfellows in that Mr. Russo is a corrupt Democrat and the great majority of the beneficiaries of his office’s generous property-tax giveaways reside in upstanding communities like Chagrin Falls and Gates Mills, which lean heavily Republican.
The general impact of easing the tax load on wealthier homeowners is that a heavier tax burden is shifted to taxpayers of lesser means, which gives a different meaning to wealth redistribution than the one being applied in this politically charged season. Many among Gov. Mitt Romney’s freeloading 47 percent do pay property taxes, either directly on their own comparatively modest homes or indirectly in the rent charged by their landlords.
Not only does a 10 percent or 20 percent tax reduction on a $400,000 or $500,000 home in Pepper Pike put a lot more money in its owner’s pocket than a similar reduction on a $50,000 or $75,000 home in Warrensville Heights does for its owner, but people with the wherewithal to acquire pricey properties also have greater wherewithal to challenge tax appraisals. With people like Mr. Russo holding elective office, the theory of trickle-nowhere economics works.
Sadly, the majority of property taxes in Ohio communities goes toward public education. So when certain privileged citizens don’t pay their fair share, which evidently was the case in places like Chagrin Falls for at least the past three years, and when the cost of educating children continues to rise for numerous reasons, more money has to come from somewhere. Yes, there are middle-class homeowners in the Chagrin Falls School District who pay their property taxes and do not contest their appraisals.
And yes, the school district’s voters, who did approve an added 7.9-mill property-tax levy last February, now have some reason to wonder whether that added tax is more than it should have been and maybe whether it even was needed at all.
What they know for sure is that, when they were told that levy would cost them $242 per each $100,000 of housing valuation, it meant true value for some but not for others.
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