Corrections
to Frequently Asked Questions as Published by the City of
This is an edited copy of the FAQ on the City’s
Website.
Italics
are additions to provide more accurate and un-slanted information. Revised 8/11/04
By Ron West
With additions from Ken Sapp & Article in LNO
” I have taken the
liberty of copying his annotated FAQ from his website and added “the rest
of the story” in red so readers can see the contrasted views. As you will
find, Mr. West takes great liberty with his version of the “truth.” As
was once said, everyone is entitled to their own opinion, but not their own
facts.” Words in red are my comments. Mr. Sapp further
calls me a “gadfly” and portrays himself as an infallible expert as you will
see from his comments. By Ken Sapp
1. What is the senior and disabled tax freeze?
It is a limitation or freeze of the property taxes
paid for residential homesteads of the disabled and of those residents 65 years
of age or older.
If the freeze passes, the City can no
longer continually raise the amount of taxes owed by Senior/Disabled citizens
on the value of their homesteads. The freeze does not affect any property
other than homesteads. It is a measure designed to keep those on fixed incomes
from being taxed out of their homes. A
similar freeze has been in place for local school taxes for many years. This is not a new, radical or fiscally
irresponsible concept.
SAPP:
It is correct that a Sr.
tax freeze has been effect for school districts for some time period. This
concept was put in place to provide some form of equity to recognize that most
seniors no longer had children in public schools. Most seniors, do
however, utilize a broad variety of city services including some not available
to those under age 65 (Senior Center for example). (Seniors have paid for these services for
many, many years and will continue to pay level taxes for the remainder of
their lives if the tax freeze is passed.)
2. Is the freeze permanent once enacted?
Yes. If cities and other local taxing entities
approve this freeze, it cannot be revoked without another constitutional
amendment to allow these tax limitations to be repealed.
This simply means that the City cannot
easily thwart the will of the voters.
Once passed, they must adhere to the freeze which is what should be
done.
SAPP: The fact that it is permanent is one of
the most significant issues against the “freeze.” An irrevocable freeze
can be implemented locally but requires a state constitutional amendment to
remove it. This is a significant flaw in the legislation and is contrary
to the concept of “local control” that allows government closest to the issues
to best determine how to meet current needs of residents. Local
control is the voters denying the right to politicians to continually raise
taxes for runaway spending.
3. Does
Yes. Currently, senior and disabled residents pay
taxes on only 52% of their total property value on average because the City
offers a $36,000 exemption on residential homesteads of persons 65 years of age
or older and the disabled as well as a 15% homestead exemption to all
homeowners. (The
City of
(This
appears to be a blatant attempt to create class warfare between the young and
old in our city. All of us are
aging. Do we want to allow the City
Council to continue their runaway spending based on ever increasing
valuations? They have already created a
Tax Increment Financing District to divert millions of dollars in tax revenue
to their own pet projects.)
SAPP: I don't understand Mr. West's statement
that this is an attempt to create class warfare. What part of the city
statement conveys this? If anything, his lobbying has created a greater
divide among age groups than anything the city has done. NRH put in place a
homestead and senior exemption when they were not required to do so. Does
this sound like an offensive act to you? (The part of the statement that tries to
portray unfairness between the old and the young.)
SAPP: As is pointed out in the example, a senior
pays only 61% of the tax paid by their junior counterpart. This is true
even though they consume the same city services as under 65
residents.
SAPP: Mr. West mentions only the city of
SAPP: Comparing what other cities provide,
however, is not a valid comparison since each city has different economic
diversity. To be accurate, all factors would have to be considered, not
just exemptions. Please don’t be concerned about
other cities. Our problem is runaway
spending in NRH.
4. How will this impact City services if approved?
Estimates indicate that the City will see a decrease
in revenue of approximately $890,000 in the next 5 years and just over $4.5
million in the next 10 years, assuming the current $36,000 exemption on senior
and disabled homesteads remains. Property tax revenue is a primary source of
revenue for Police services, Fire services, street maintenance, the Library,
Municipal Court, Neighborhood Services, and most other departments in the City
that provide services to citizens.
Read this as the city is already planning
to spend $3,852,720 in tax increases
on the other citizens in our city during the next five years and $19,480,079 in new tax revenue over the
next 10 years! These numbers are simple
projections on the non-senior homesteads using the numbers in item 5
below.
The “decrease in revenue” portrayed by the
City is completely inaccurate. The City
will not see any decrease in revenue as a result of the freeze. In fact, revenue to the City always has and
always will continue to increase as long as the City exists, by state law. The only thing the freeze will change is that
it limits future tax increases on a relatively small number of limited
income households in comparison to the whole population. The City thinks the impact of an ever
increasing tax bill on your finances is insignificant yet it claims it will
suffer extraordinary hardship if its income is reduced by even a tiny
fraction. This is either an
intentional mischaracterization of the facts or a completely selfish and skewed
perspective on whose money is in your pocket.
The City
appears to be guilty of gross mismanagement of the revenue it already receives
to the detriment of the very services it claims will suffer from the
freeze. (See the article(s) related to
SAPP: Where does one start with this
whopper? (What whopper? Calling folks liars without
specifics was previously the prerogative of our Mayor. ) Mr. West seems to think that inflation exists every place on earth EXCEPT NRH. (Didn’t
know that I mentioned inflation?) Perhaps he can be more
specific as to which city services he would like to have limited. He has
previously stated that “he is not going to play that game.” With so much
waste, I would think he would jump at the opportunity to identify a few simple
specifics. Two of the City Council candidates Mr. West supported in the last
election were involved in the recent budget process. Surely they can
assist him is locating these diverse areas of fiscal mismanagement. This
whole paragraph is strange. The upcoming
budget is somewhere in the vicinity of 500 to 600 pages long, available only at
the library to citizens, and will obligate or spend around $80 Million. Public hearings required by law – are interpreted
to mean that we as citizens can offer our “comments” within the constraint of 3
minutes – two weeks before they approve their budget. The council has historically turned a deaf
ear to all such hearings. A discussion
of specifics or line items on the budget would not be either effective or
responsible. Cutting the budget would
start by limiting bureaucratic departmental budgets. As a politician
- which I strongly suspect Mr. Sapp wants to be - you always scream about
cutting services that are highly visible, like fire, police and utilities – and
no such cuts would be necessary as a result of the freeze.
SAPP: The fact that he accuses others of
mischaracterizing the facts is laughable when he is so loose with his.
According to TAD tax rolls, the city lost $97,027,396 in taxable property in
2004 due to the $36,000 senior exemption alone. Yes, Mr. West, the
official TAD document calls it “lost.” The
exemptions are in place as are homestead exemptions. “$272,249,896 Total
Lost: Local Option %
SAPP: This loss, however, was a conscious effort
to provide NRH seniors a break. IT is not an expense but the proper accounting
term is “tax expenditure.” This tax expenditure resulted in a benefit to
senior citizens for 2004 of $553,056. (Proper in Sapp’s eyes – not
mine.)
SAPP: The truth is, no one knows for sure exactly what the future impact will be.
(But the sky is falling so lets continue
to increase taxes on our Seniors and Disabled?) Projections beyond 24 months are
speculative at best which is why constraining future city management with
an irrevocable tax freeze is an unwise act.
5. How many households in NRH would currently qualify
for the exemption?
3,013 homes out of approximately 16,056 single family
homes in
We
believe them to be close to actual but not necessarily factual. We do know that only 109 new over 65 and
disability homesteads were filed in NRH over the past year. This compares to the total 363 new homesteads
filed in our city.)
SAPP: According to the 2004 TAD certified tax
roles, 2,824 residents applied for the senior tax exemption. This is 21%
(1 in 5) of the total NRH homesteads. Consider that this percentage going
to grow significantly over the next 10-20 years as the largest demographic
shift in our nation's history takes place as baby boomers reach age
65. Consider that beginning in 2010 an American will turn age
65 almost every 7 seconds.
SAPP: Insurance actuaries and economists are
unsure what impact this vast change will have on the revenue and expenditure
side of the governmental equation. Since these learned individuals are
unsure, how can we be? Does Mr. Sapp assume that he alone is
qualified to consider this?
SAPP: One of the factors not mentioned is that not
all seniors own their homes. Those unfortunate enough to rent do
not enjoy the benefit of a homestead or senior exemption. They are
faced with increased rent as landlord pass through the increased taxes shifted
to them. Mr. Sapp should be joyous at this since
the city can continue to increase taxes on these folks.
SAPP: The greatest concern I have is the impact
this will have on future seniors. Those who are the first to benefit from the
freeze are the principle beneficiaries. As taxes shift to the under 65 age
group, these individuals will see there taxes frozen at a higher level.
In addition, since the exemption was put in place without contemplation of a
freeze, is it possible that future seniors will also face a reduced exemption.
The current seniors are protected since their actual tax bill is frozen and it
currently contains the exemption. (Should we take this as a
threat against those attaining age 65 at a future date?)
SAPP: This
is not an unusual phenomenon in that legislation intended to help a certain
class of people may actually end up hurting the same class of people it
was intended to help. (Help me
here. Has Mr. Sapp shown anywhere that
anyone other than the big spenders on the council will be hurt?)
SAPP: If one thinks this tax shift is not a
realistic possibility consider that BISD (which has a senior tax freeze) has
seen their tax rate increase from $1.50 in 1996 to 1.61 (7%) in 2003. NRH
taxes remained at $. 57 during this same period.
Could one reasonably assume that since both tax entities have basically the
same tax base, growth and inflation impact, that the tax freeze may have
contributed to the increase? (Please give me a break! Who in their right mind thinks that a tax
shift is what is driving up rates for school districts? By the way, the BISD tax base is far, far
larger than NRH but they don’t have access to all the additional fees and funds
at the disposal of our city.)
SAPP: One other factor that some do not
consider is that because of this demographic shift, the actual retirement age
for future seniors is not 65 but a later age depending on year of birth.
According to the SS administration, the full retirement age increases for all
individuals born after 1938. Those born after 1960 have an age 67 retirement
age. Those born after 1936 who retire at age 65 will have their benefits
reduced. Social Security is a whole different subject
isn’t it?
SAPP: Why did the government do this? They did it because they
realized that the aging of
6. Why does the loss in revenue to the City continue
to increase into the future if this is a freeze?
This is because all sources of population and
demographic information project an increase in the population of people age 65
and older as the Baby Boomer Generation reaches retirement age in the next 5 to
10 years. Sources include the United States Census Bureau, the
This is really a bad question. There is no LOSS in REVENUE. There is a denial of the right to INCREASE
tax revenue. The city bureaucrats are
screaming because they cannot spend future tax increases. There is no reduction in any existing revenue
from our Seniors and Disabled. See
Question # 4.
SAPP: See question 4 and 5. What Mr. West
did not explain is that as cities build out and existing structures age,
property values level out and sometimes decrease. Since the tax freeze
not only freezes taxes at an actual dollar amount, it also freezes the rate in
effect when the senior reached age 65. (Build out should decrease
the need for new taxes as the infrastructure should be completed and in only a
maintenance state.)
SAPP: What this means is that if the property
tax base declined, the city would need to raise the rate on everyone to collect
the same revenue. In this instance seniors would get an unanticipated tax
break over non seniors. (What city does Mr. Sapp live in? If the property tax base declined must be
some kind of oxymoron. If he is so
factual, give us an example of this somewhere in a city the size of NRH!)
SAPP: If anyone doubts this deflation, look at
the square foot price of older homes versus newer ones. In addition, well
known economists have predicted a dramatic increase in seniors will weaken
demand for larger homes and therefore reduce their marketability and
value. It is these larger homes that have fueled prior increases in
residential tax base. (Here we go again! Mr. Sapp, please be assured that TAD is
RAISING the value of older homes on a regular basis. I sure don’t buy into your elitist position that
only larger home are fueling the increase in the residential tax base. Further our city council created TIF#2 and is
stripping all city taxes from all new homes in Hometown NRH to build a new
library and new recreation center. If
the city needs the revenue so badly, why do that? Citizens in Hometown NRH are not paying one
cent toward the city services they receive.)
SAPP: This may not happen in the next 5–10 years
but learned people support the viability of this scenario. Responsible city planning
requires officials to a t least consider this possibility. (Are
we to thank the learned Mr. Sapp for enlightening us dummies?)
SAPP: I hear the laughter now; someone thinks I
am making a ridiculous assertion. I challenge those who are laughing to
spend the time evaluating the impact of this demographic tsunami as I did as a
senior executive for two of the world's largest insurance companies.
Regulators require that insurance companies responsibly look at these issues 30
or more years in advance to assure that companies can deliver on the promises
they make. To bad someone does not provide this oversight for government. (Now
we must thank Mr. Sapp for informing us of his superior knowledge and
experience. For my part, I like for the
citizens to oversee our government. We
are not nearly as dumb as Mr. Sapp thinks.)
7. Can Senior Citizens lose their homes if they can’t
pay the property taxes?
No. A provision in the state law allows senior
citizens who cannot afford to pay taxes on their homes to defer payment of the
taxes.
Don’t get too comfortable with this answer. If a citizen is in a situation where they cannot afford to pay the taxes due on their homestead, the taxes and penalties continue to accrue so that the seniors/disabled or their heirs must pay punitive amounts upon the sale of the applicable property. The government always gets the money it thinks it’s due and it severely punishes those who do not pay upon demand, regardless of the reason for nonpayment. This option has nothing to do with local city government, it is state law.
SAPP: What does it matter that it is state law?
The facts remain the same. Non senior do not have the same benefit
and they lose their home if they do not pay their taxes. Some people
seem to think that individuals under 65 are not affected by inflation and unplanned
expense. Ask a father of a family of school age children about his
ability to shoulder an ever increasing tax rate. (It
only matters that is was presented in support of a
local issue as if the city had done that, i.e. slanted information to secure a
desired result.)
SAPP: Does this mean we should not give seniors
a break, heck no? The issue of providing or not providing a senior tax
freeze is basically one of fairness rather that economics. (I think it is an issue of taxation and
runaway spending!) What is a fair
differential of taxes between seniors and non seniors to avoid the class
warfare Mr. West asserts? In some situations, seniors currently pay only 36% of
non seniors for the same home. This differential will only grow in the future.
Is this fair? This question is for the voters to decide on September 11. I
obviously strongly disagree with this paragraph. When a person reaches age 65 – with the
freeze they continue to pay their fair share of taxes. We are only voting on taking away the right
of the bureaucrats to continually increase their taxes. Politicians always squawk when you limit
their power to tax.
8. What did voters approve in September 2003 with the
constitutional amendment?
Voters approved an amendment to the Texas
Constitution known as Proposition 13 in September 2003 allowing cities and
other local taxing entities the local option to implement the freeze. The
constitutional amendment does not require implementation of the senior/disabled
tax freeze.
This option was passed by a landslide
majority across the state. The majority
of the City Council opposes the freeze and thinks the voters were simply not
smart enough to know what they were voting for.
SAPP: The amendment was VERY CLEAR. It provided
for a local option to provide a tax freeze, It did not mandate one.
Additionally, most voters did not realize that seniors already benefited from
significant property tax exemptions. Mr. Sapp is one of those
that believes that you did not know what you were
voting for.
9. How many people voted in the Constitutional
amendment election?
4,817, or 14%, of 34,248 registered voters in
It
was approved by approximately 85% of those who actually voted in
SAPP: The voters did pass this by a solid
majority. Let’s see here, 85% of 14%. That is about 12%. Does 12% sound
like a mandate? I wonder what percentage of the 14% were seniors?
Hmmm! Does the honorable Mr. Sapp forget that
less than 1000 total voters just a year ago voted to spend $37 Million for
Capital projects and that
was touted as a great mandate? My hat is off to all those who voted as
exercising their rights as a citizen.
Apparently Mr. Sapp and his friends don’t really want a large voter turn
out for this election.
10. What allows the City Council to call an election
on this issue?
Article XVI, Section 3 of the City Charter states:
“The City Council, upon its own motion and by
majority vote of its members, may submit to popular vote at any election for
adoption or rejection any proposed ordinance or resolution or measure, or may
submit for repeal any existing ordinance, resolution or measure in the same
manner and within the same force and effect provided in Section 2 of this
Article, and may, in its discretion, call a special election for this purpose.
Recent
experience indicates that the majority of the City Council violates the Charter
routinely and the City Attorney, Mr. George Staples, when asked “Who is supposed
to enforce the Charter?” – responded to a citizen “I am not going to tell you
that. If you want to know, hire a
lawyer!”
SAPP: The attorney General has resolved this
issue. NRH was one of the few cities that got it right. Now if we pass this by one vote, the
council is pledged to enact the freeze!
11. Will the City Council act according to the
outcome of this election?
The City Council has bound itself by resolution to
act according to the outcome of this special election.
SAPP: Now Mr. West can see the future. He indicates that if the freeze passes, council members will vote for it under protest. The council members stated their personal positions BEFORE THE ELECTION. (They clearly stated they opposed the freeze and would vote against it unless passed by the voters.) They also bound themselves to the results of the election, whatever the outcome.
SAPP: What exactly is Mr. West looking for? Oh I know, he wanted
the Council to vote the freeze in and eliminate the opportunity for the voters a chance to have their say on this
critical issue (While I might have preferred a quick vote supported by the
85% approval ratio in NRH, I am quite happy with the opportunity to vote on
this issue. I believe that this election
is a chance for the electorate to reign in our city
council’s spending habits at least a little.
The magnitude of the impact of the freeze will not create a need to cut
any city services. In my own opinion, I
just hope it will slow down the rate of growth of local government. I sure didn’t know that Mr. Sapp also
included mind reading in his resume.) Is this the same Mr. West that constantly denigrates the city
for using certificates of obligation to bypass voter approved
bonds? Finally something
we really agree on! Yes, Yes, Yes, I am the same Mr.
West that continually denigrates the city for using Certificates of Obligation
to issue debt paid by taxes without first submitting them to a vote. I believe that this is a real abuse of power
by the City Council and is badly misused.
SAPP: With regard to the ballot language, is he
implying that voters clearly understood the constitutional amendment but won't
understand this one? Actually I don't think he was implying that, he just
likes to make outrageous statements from time to time to see if we are paying
attention. Right on Mr. Sapp. Actually, I assert that the language is
written to present this very positive ballot item in the most negative light
possible in order to encourage a negative vote.
SAPP: Every reasonable effort was
made to assure the facts are correct. (Did anyone else see any of his “facts”?) The
rest is just my opinion.
I think the last sentence should read “All of this is my opinion.” My thanks to Mr. Sapp for
taking the time to form his opinions and to publicize them for your scrutiny
and consideration. He is an
active citizen in our community and certainly has a right to state such
opinions.
To do otherwise would likely result in a recall election of those members opposing the majority vote of the citizens. If the freeze passes and they honor the results of the election, they will do so under protest. One Councilmember recently characterized those of us that support the adoption of the freeze through the democratic process as “political terrorists”. They are on record and unequivocal in their opposition to this measure. The wording that will be used on the ballot appears to be designed to minimize the likelihood that voters will understand it or accept it.