WCPN Sound of Ideas Today: The Rising Cost of Local Taxes

Go here to listen live, by podcast (at your convenience) or watch the broadcast.  Here's the description of the show:
Homeowners want to live in nice neighborhoods but having to dig deep into their pockets year after year is not just frustrating for some; in this economic climate it may be impossible. Several school, social service and library tax levies are on the ballot next month for neighborhoods across northeast Ohio. Wednesday on the Sound of Ideas, Dan Moulthrop and guests discuss what's at stake for cities and the region if either a yea or nay vote is cast.
Sharon Broussard, Editorial Board, Plain Dealer
Doug Oplinger, Managing Editor, The Akron Beacon Journal
James Brady, Shaker Heights City Councilman
Thomas Jelepis, former mayor of Bay Village & Broker/Owner, BEC Group

Lake County Commissioners Send Levy to Ballot, by John Arthur Hutchison, The News-Herald
Electric bills could go down if voters in Medina County townships approve 'aggregation', by Ellen Kleinerman, The Plain Dealer
School districts around Northeast Ohio can't wait for economy to pick up so they can ask residents for more money in May, by Gabriel Baird, The Plain Dealer
I'm listening, and trying not to reach for the phone. But that doesn't mean you can't.


Paul said...


Harvard Law Professor Elizabeth Warren has written extensively on the precarious situation of the American middle class. I heard her say one that really stuck with me:

Because of the way school districts defined and funded in America (ie community schools funded via property taxes), middle class Americans tend to take on all the mortgage they can - with two incomes usually - to be able to afford a home in a 'quality' school district.

This may be a bit of a generalization, but I believe she is essentially correct in this. Last night our school board sent a letter to the City of Columbus asking them to reconsider a planned zoning for a large parcel of land in our school district from single family homes to high density low-end condos - the kind of development which can add lots of kids to the district but not much tax revenue.

These kinds of places sell like hotcakes to folks eager to escape from the urban schools; these homes are likely to be subsidized to further enable that.

I told the other board members that we shouldn't be putting up a "po' folks keep out sign" on our district boundaries, but the proliferation of these developments over the past few years is killing our economics.

This is one of the reasons I've always advocated a true voucher program (not Ohio's miserable excuse for one). Tear down these artificial boundaries, and let the kids go to any accredited school they want.

Then maybe we can arrest this decades-long flight from the urban neighborhoods to sprawling suburbs rising out of the corn fields, which leave both urban and suburban districts with unsustainable economic models.

Jill said...

Which district are you again? I was in a community east of Columbus kind of near Gahanna I think (maybe south of there) and heard about something similar. I'm wondering if it's the same area.

There's no question that we have revenue-raising options mismatched with use and need, and yet I do wonder to what extent some of that is inevitable. I'm uneasy with the notion of being all vouchered but I'm also someone who would really want to study it where it's in use first before condemning or condoning.

Paul said...

Hilliard, which is west of Columbus, straddling I-70 and I-270. I suspect the district you heard about was Reynoldsburg, but it's the same story in all the Columbus suburbs.

I think central Ohio is somewhat different than the rest of the state in that the City of Columbus was given exclusive control of the regional water/sewer service 50 years ago, giving it nearly dictatorial power over what kind of development happens where. Through that control, they've been able to promote suburban bedroom communities with no industry, and have kept most significant commercial development in the City of Columbus/Columbus City Schools.

That decouples the industrial tax base from school funding, meaning our suburban schools are funded incrementally only by residental property taxes, which are now skyrocketing as teacher compensation continues to grow. The State is no help - it has frozen our funding for a number of years.

Curiously, the dollars we get under the Governor's new system is the same as under the old system. That's because regardless of what kind of empirical or theoretical algorithm one uses to determine appropriate funding, the State doesn't have the money.

But the common thread across all government entities, including municipalities and school districts, is that revenues are flat or down, while costs - predominately labor - continue to rise.

The cure always seems to be layoffs, and the unions seems to be willing to eat their young in this regard, as every union contract I know requires the most junior to be laid off first.

How long will it be before a recalibration of labor rates is put on the table? I think that may be when the young union members decide to become active, and demand that the older members attenuate their demands so that more of the younger folks can keep their jobs.

The answer certainly isn't to just keep raising taxes...

Jill said...

What you've written resonates with me and my experience in just a few months - 100% it's what I've observed too (esp. what you say in the last 3 or 4 paragraphs).

I don't know what the answer is, yet. I mean, everyone is entitled to earn a good wage, and I do believe loyalty has a value and gives back in investment in someone and their skills etc. And in some ways, if you think about it, that wages go up - because people are loyal, and work and so on - really shouldn't have anything to do with revenues going down, you know? I mean, they are not really connected except for one funding the other - but they don't have any actual relation, you know what I mean?

Anyway - I wanted to say, the place I was in was Pataskala and it's somewhere east of there toward Columbus that I heard a similar issue about the housing thing you described.

Sorry if I'm a bit incoherent - end of a long day - week - month? :)

Paul said...

One of the principles of a market-driven economy is, I believe, that people aren't necessarily paid what they think they're worth, nor are they paid what someone else thinks they're worth, but rather they are paid what they can negotiate. The price of labor is set like any other price - at the equilibrium between supply and demand.

I have no problem with the notion that workers should be able to band together in labor unions in order to increase their bargaining power.

The problem with governments is, I think, that the unions are willing to fight harder than the government officials in most cases. The unions also tend to hold more political power. In our school district, the union-endorsed candidates almost always win (although our team managed to knock off one of them in this school board election).

And so, the result of every single negotiation is that the union walks away with more that they had before. Our superintendent recently said as much. A concession by the union in one area (e.g. lowering the rate of pay increases) is won by giving up something that will have costs down the road. A popular one is more sick days. Our teachers get 15 sick days per year - and they're in the classroom only 9 months! We have a real problem finding subs in the Spring when hundreds of teachers take 'sick' days.

It took a near collapse of the American auto industry for the unions to back down a little. I fear its too little to late - the American auto industry will never be what it was again.

Gravy days for the workers of the last 30 years, but where are their children going to work?