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Frequent Contributor

What happens when there is a budget shortfall in a small city?

https://fox17.com/news/digging-out/cookeville-treats-property-tax-different-than-nashville-during-cr...

Comparison of two approaches - a small city vs. big city.

No tax increase in Cookeville but a tax increase in Nashville.

I bet the same in Chicago as in Nashville. I will end up in paying more taxes in Chicago even though my rent income goes down.

Now, you should all know why my wife and I never want to move out of our two acre lot home in the plateau surrended by trees and bushes so that none of my neighbors are anywhere close to me.

11 Replies
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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?

In Nashville the city has been using one-time money to balance the budget for many years. Last year they tried to sell the street parking violation fees to a company to balance the budget. The public finally said no. The one time monies have finally run out. The first tax increase in just over a decade was the only way out. Taxes in Nashville have been low for years and still are even with a 34% increase in property taxes.

Capital
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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?


@Capital wrote:

In Nashville the city has been using one-time money to balance the budget for many years. Last year they tried to sell the street parking violation fees to a company to balance the budget. The public finally said no. The one time monies have finally run out. The first tax increase in just over a decade was the only way out.


I knew that you would be interested in this. The tax rates have not increased in more than 20 years. Even the assessment went up by 5% this year after 20 years. But, in Chicago, the taxes went up 2.75 times in 8 years time. They still have budget problem, not the retirements fully funded.

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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?

I own a house in Nashville worth about $650k. In Nashville I will pay just over $5k in property tax. In Chicago the property tax on the same house would be about $19k. Looking at those numbers I really don't feel all that bad about my increased property tax bill. 

Capital
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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?

@ECEPROF  I think that the rules of economies of scale work exactly the opposite when discussing governments than with companies. Smaller governments have smaller budgets that are easier to understand and control. The larger government gets the more services they provide with ever growing budgets that get so large they can no longer be understood or controlled. And of course we all want services but have less enthusiasm paying for said services. 

Capital
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Re: What happens when there is a budget shortfall in a small city?

In my county (Loudon), the tax bill would be 1/2 of that. In my old state it was the same across the state less a few tweaks due to school bonds etc. If you bought that $650k house yesterday it would be $7000 per year in CA.


@Capital wrote:

I own a house in Nashville worth about $650k. In Nashville I will pay just over $5k in property tax. In Chicago the property tax on the same house would be about $19k. Looking at those numbers I really don't feel all that bad about my increased property tax bill. 


 

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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?

Pretty simple, let Liberals manage a city and see it run down and your taxes increase.  Then people leave to cheaper places and things get even worse.

But then these Libs come to my city and want the same failing things they ran away from...why? please stay at your high taxes failing cities and don't change mine. 

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Participant ○○○

Re: What happens when there is a budget shortfall in a small city?

Property taxes are very high in most of Chicago's suburbs as well as in small towns across IL - including many that have been run by Republicans essentially forever. I'm not arguing that the Chicago Dems are efficient, or competent, or not corrupt, just that it it not really a D vs R thing.    

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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?


@SJ60 wrote:

Property taxes are very high in most of Chicago's suburbs as well as in small towns across IL - including many that have been run by Republicans essentially forever. I'm not arguing that the Chicago Dems are efficient, or competent, or not corrupt, just that it it not really a D vs R thing.    


You are right. It is who wants to have control so that they can channel the cash towards their tribe instead of the other tribe.

Here is an example: In the new senate virus bill, the employees cannot sue the employer for giving COVID-19 but the employer can sue the employees for giving the virus. How about that? It is very interesting.

 

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Participant ○○○

Re: What happens when there is a budget shortfall in a small city?

When there is a budget shortfall, it really depends on the state how it is handled.  In VA, the locality can lay off, cut salaries, raise revenue, sell bonds, cut services and ask state government to either take over some services or to loan them money.  When a city provides water, gas, and other services to surrounding localities, they can raise fees to them.  The surrounding localities most likely won't have the resources to go elsewhere.    In 2016, the City of Petersburg cut salaries by 10%, closed a fire station, postponed buying new equipment. 

Virginia has a $500M rainy day fund which cannot be tapped for local government relief, perhaps some states permit that.   Some states, like CO, don't have these options.

I live in one of the wealthier counties in VA.  But even here we are seeing cutbacks and the county rainy day fund will be tapped.   Salaries are frozen as are new hires, but there will not be layoffs; positions vacated by retirement will not be filled.  (Not sure of the school system.) Some VA local governments are laying off. Real estate taxes went up, not the tax rate, but property values are still rising and there is a shortage of homes. In my neighborhood, houses are selling within two or three days there are so few on the market. 

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Frequent Contributor

Re: What happens when there is a budget shortfall in a small city?

Putnam Saved $3.6 Million In Interest

See how to use the tools available to reduce the expenses.

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Re: What happens when there is a budget shortfall in a small city?


@FD1001 wrote:

Pretty simple, let Liberals manage a city and see it run down and your taxes increase.  Then people leave to cheaper places and things get even worse.

But then these Libs come to my city and want the same failing things they ran away from...why? please stay at your high taxes failing cities and don't change mine. 


Political commentary. You are hereby suspended for 24 hours. 

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