In my home office yesterday I was speaking to Miss Sass L. Frass, our 14-pound dog, about property taxes. To extinguish any incendiary remarks from possible detractors, I assure you that Sass was not answering me, nor did she offer any input.
Between my local business interests and my personal property related taxes, I am the third largest property taxpayer in the City of Alpena and the second largest in Alpena Township. So how much tax is that? About $730,000 in property taxes alone. Thus, I have a very large vested interest in the operations of both governments. After all, in a sense, it's my money the mayor and township supervisor are spending. It's personal.
A really special day for me is the one that occurs annually with mail containing "Notice of Change in Assessed Valuation." As usual, about a week ago the annual missives from the township and the city rolled in. They all contained the same message.
All appraised property values had fallen again and all assessed valuations had increased. In other words, the net worth of all of my property went down but the amount of tax went up because the millages remained constant. The total value of my estate is less but my annual cash outflow is greater.
I'll bet that about the same news came to you. My numbers are bigger but the news is the same: Value down, tax up.
Over the past few years I have been purposely spending less, keeping more assets in cash and equivalents, and maintaining excellent channels of communications with my banks. Times are uncertain, average income in the United States is down 6 percent over the last four years, and the economy isn't growing fast enough to get us to recovery.
What worries me the most is that governments don't "get" the fact we are hurting and our families are hurting. Some folks are beyond hope.
We need government leaders to offer more encouragement than "We won't be able to fund current operations if people pay less tax."
That really is the point, isn't it? Governmental officials have the answer right in front of them. We have to provide only essential services, and we need to provide them in a new way. The current way isn't working and we need new thinking.
Take our schools. Interactive video teaching over the Internet today is a reality at the college level. I can envision a day when new buildings will not be necessary and staffing levels drastically reduced in our schools.
The combination and right sizing of government and the services they provide can be accomplished at less cost.
In the same way that our houses are being market valued lower, so must government react to this change by making government more efficient. Government leaders have to be forced to live with what taxpayers can bear, not the other way around.
As with building a house, sometimes we need to change plans of the structure as we go. So, too, must we sometimes change the structure of government.
We have governments building new structures because money is available to do so, but they don't consider these buildings will need maintenance over their life cycle, which will be funded locally without grants.
The gritty reality of where we live is we have a declining population, fewer children in school, fewer folks working, lower paying jobs on average and less tourism opportunities.
Remember the movie "Field of Dreams" and the concept "If you build it, they will come?" It was a fantasy drama.
What isn't a fantasy drama is "Restructure so that folks can make money, and they will come." Work on becoming the place with the lowest tax burden in the state and watch the economic transformation that will take place.
In sailboat racing over the years I have often said to my crew as we are getting passed by a competitor "Do something different." They almost always reply "What should we do?" I always say "It doesn't matter what you do, but we can't keep doing this." They start to change the angle of the boat, the trim of the sails, and the point of sail, and we start to slowly pull away.
So, too, must government take a look at it's tactics and strategy so the taxpayers can enter the winner's circle.
Stephen Fletcher was graduated decades ago from Cornell University with an A.B. in Economics and from Michigan State University with an M.B.A. He has lived and worked in the decades from graduation until now in the Alpena area. He thinks economics is fun and interesting.