It’s time to tax
our brains a bit

Budget season is one of the most confusing times for citizens who want — as all of us should — to become more involved in what government does on our behalf.

Most of us worry about big bills we must pay for property taxes and are more than happy when local governmental units stick to so-called revenue-neutral rates.

That means we as taxpayers won’t see our tax bills swell merely because our appraisals have increased, even though we did nothing to improve our properties.

Most of us look at government spending and see lots of waste — huge raises we don’t get in our jobs, massive purchases of seemingly unnecessary equipment and services, and construction projects that often seem to address frills more than needs.

But most of us also look at things like potholes and unpaved streets and roads and wish government would spend more — or, at least, spend more effectively — for these.

At this time of year, we tend to obsess over property taxes, but we really shouldn’t. They’re but a small part of the total taxes we pay.

Lots of variables go into calculating exactly what each person’s total tax bill might be, and anyone can quibble with methodology used to estimate tax breakdowns.

A best guess, however, is that a typical Marion County family earning $60,000 a year with two cars and a home valued at $100,000 will pay 4.2% of its income in property taxes.

That sounds like a lot, but it pales in comparison to other tax burdens.

Although many get income tax refunds because they overpay throughout the year, federal income tax accounts for a much larger 7.3% of a typical family’s taxes.

Social Security takes 7.0%. State income tax takes 3.7%. Sales tax takes 2.6%. Medicare takes 1.5%. Personal property tax takes 0.3%. And in cities that charge more than they pay for electricity and maintenance of electric grids, residents pay a hidden utility tax of about 1.0%.

All in all, that adds up to nearly $16,500 of an average family’s $60,000 income. Of that, just $2,500 comes from property tax. But it seems to be the $2,500 we can control.

People who vote to set those tax rates are people we run into at restaurants and in grocery aisles. But is influencing them really what it takes to control government spending?

Take, for example, Hillsboro’s proposed budget. It plans to spend something like $12.5 million next year, but only 7.9% will come from property tax revenue. The rest will come, directly or indirectly in the form of grants, from an assortment of other types of taxes.

If we, as citizens, want to have a voice in how much taxes we pay, we need to look at much more than just property tax rates. We need to look at actual line items of expenditures, regardless of whatever taxes or fees support them.

Hillsboro has made that relatively easy. For weeks, it has been circulating full sets of budget information, including breakdowns by salaries, consumables, services, and equipment purchases for each part of local government.

Not every municipality has done as well. Marion, for example, still hasn’t shown the public or even elected officials any sort of breakdown of how it plans to spend money. It has voted only that it might want to exceed revenue neutrality and increase everyone’s bills.

When bureaucrats control budgeting and leave elected officials and the public in the dark until the last minute, democracy suffers.

Last year, Marion was forced to adopt a budget at the last minute, without elected officials having any idea what went into each line item. Despite a near-complete turnover in elected and key appointed officials, it seems headed in the same direction this year.

Many reasons explain why the property tax bill on a house valued at the same amount is 19.1% higher in Marion than it is in Hillsboro. Surely, less extensive involvement of elected officials and taxpayers in the budgeting process is one of them.

Still, we shouldn’t obsess too much over city and county property taxes. In Marion, they accounted last year for 69.2% of a typical homeowner’s property tax bill. The rest came from other fees and other taxing districts, including the schools (19.8%) and various other districts and functions, including recreation, hospital, extension, transfer station, and state (11.0%).

A dollar is a dollar, whether it’s saved from extension, recreation, city, or county. We taxpayers need to remain vigilant — not just to cut tax rates but to make sure we’re getting the services we want and need out of the tax dollars we pay.

If we could be sure of that, we might even support increasing taxes in some areas if they would pay for more than just featherbedded bureaucracy.

— ERIC MEYER