Question regarding property taxes... (Bastrop, Hutto: loan, lawyers, new house)

[mimimomx3]

Originally Posted by hoffdano

In the case of schools - what if the school district doesn't need to build new schools? Most new developments don't fill up suddenly. They take years to build out. A new school might not be needed for years.

I have been part of committees that built school bond packages. We used to talk about a "newcomer" tax so that someone moving in has to pay a price rather than just inherit decades of investment. But there is no such taxation vehicle in Texas.

I think your suggestion is simply unworkable. It is not materially different from taxpayers that don't want the US to spend as much on defense, or health care, or anything else. Except for pay as you go systems like toll roads or gasoline taxes, it is difficult to single out any group of taxpayers.

Many school districts by the way try to get developers to donate land for schools - an effective way to save money for the school district and steer school sites (especially elementary) close to new developments.

It should be no surprise to you that I am a libertarian, and as such, find that 'bond packages' are no more than hidden taxes that help perpetuate an ever growing government. I absolutely don't want to keep growing our deficit with pipe dreams of health care, 'green' homes, foreign wars and the like. As for schools, I see nothing wrong with forcing developers to either fork out the money to build a school for their burgeoning neighborhoods or set aside money for the time that a school is needed. As I mentioned, I think property taxes can fund the maintenance of schools, roads, police and fire but not much else.

[mimimomx3]

Originally Posted by iceshots

If developers had to build schools as part of the development work, is that new school now restricted to kids from that development only? Does that mean "richer" developments within the same ISD get better schools than the "poorer" development? Isn't this one of the things that people complain about?

Even if the above situation worked, it may only work at the elementary level. What happens at the Middle and High School level? Who builds the schools?

I agree that new homes should carry some kind of newcomer tax since they are increasing the population base and therefore driving additional infrastructure costs, but, it should still be administered through the tax base. However, this means that a long time resident in the area gets hit with a newcomer tax if they move into a newly built home.

I don't think there is a simple solution to anything.

Why call it a tax? It's common sense that a developer should have to develop the infrastructure of a parcel of land and not expect taxpayers to do it for them. Whether the developer wants to pass it on to the home buyers would be a question of free enterprise and supply and demand.

As for who builds the schools, the school district would. I'm not arguing about bricks and mortar construction, I'm arguing for the FINANCING of it. The developers should have to contribute financially, to a set aside fund, for building new schools and other needed infrastructure. It's not that complicated.

[hoffdano]

Originally Posted by mimimomx3

It should be no surprise to you that I am a libertarian, and as such, find that 'bond packages' are no more than hidden taxes that help perpetuate an ever growing government. I absolutely don't want to keep growing our deficit with pipe dreams of health care, 'green' homes, foreign wars and the like. As for schools, I see nothing wrong with forcing developers to either fork out the money to build a school for their burgeoning neighborhoods or set aside money for the time that a school is needed. As I mentioned, I think property taxes can fund the maintenance of schools, roads, police and fire but not much else.

How are bond packages a "hidden tax?" I think everyone knows that property taxes pay for the bonds. School districts tell you what any particular bond package will do to the tax rates.

I'll say again your idea is unworkable. I can't see how a formula could be put together to determine how much money a developer should set aside. It would have to consider density, build out rate, demographics of the future residents (e.g. how many children per household), etc. Young families wouldn't burden the middle and high schools until later. And I think the developers would find a way to profit (via markup) from the costs they pass through to home buyers.

What happens if a developer goes bankrupt (this does happen)? Or doesn't actually set aside the $15M required for an elementary) school? The school district will have to sue, which is total waste of resources. In all likelihood a developer won't have $15M in cash so they'll have to borrow it. Further raising the costs.

[woodinvilleguy]

It is common that developers have to purchase land that is used for schools or permant green space then sold back to the city for $1/acre. I wouldn't doubt that the developers of the current communities are already doing this.

[mimimomx3]

Originally Posted by hoffdano

How are bond packages a "hidden tax?" I think everyone knows that property taxes pay for the bonds. School districts tell you what any particular bond package will do to the tax rates.

I'll say again your idea is unworkable. I can't see how a formula could be put together to determine how much money a developer should set aside. It would have to consider density, build out rate, demographics of the future residents (e.g. how many children per household), etc. Young families wouldn't burden the middle and high schools until later. And I think the developers would find a way to profit (via markup) from the costs they pass through to home buyers.

What happens if a developer goes bankrupt (this does happen)? Or doesn't actually set aside the $15M required for an elementary) school? The school district will have to sue, which is total waste of resources. In all likelihood a developer won't have $15M in cash so they'll have to borrow it. Further raising the costs.

Governments borrow money by issuing bonds. They pay interest, determined by their creditworhiness, to the investors who buy the bonds. Who pays for the interest? We do. In the sense that most taxpayers and citizens don't vote even in MAJOR elections, the chances of them voting in a bond election, which are usually put on the ballot during a slow election cycle, bonds are passed by a very small percentage of the population.


I don't understand what is 'unworkable' about asking developers to pay their fair share of developing and creating a community where none existed before. The Travis County Appraisal office has done a great job of figuring out how to tax me and you on our property. Perhaps they could apply their taxing wisdom to taxing developers in the same way.

I wouldn't be surprised at all for developers to suddenly 'go out of business' and evade their responsibility- it happens all too frequently. I would suggest that before a developer clears one field or chops down one tree, they give a cash deposit on the amount they'll owe toward building the infrastructure for their development, as calculated by the omnipotent TCAD.

Easy, but politically impossible, as I'm sure the developers have many more friends at city hall than I do.

[Trainwreck20]

citizens don't vote even in MAJOR elections, the chances of them voting in a bond election, which are usually put on the ballot during a slow election cycle, bonds are passed by a very small percentage of the population.

Should make bonds voted on during bond elections easy to defeat, too, shouldn't it?

It is easy to SAY that changing the system is easy, but there are all sorts of details that are not that simple. So, say I am the developer of a Circle C ish type of development. I will have to pay for schools - elementary, middle, and High school - long before they will be needed, and base their size on some assumptions of the future. But if that is being paid for solely by the new residents, then I am NOT going to turn it over to the city/state/school district. Heck, I am going to set up a MUD and tax my residents and build/run my own school and prvent the ISD from using/running it. The existing ISD would have NO ability to rezone the school and use it,either. Why, I guess I could CREATE my own little school district, too (don't really know if that is possible, but would probably be made possible if developers had to pay for the schools). We are heading toward liberitarian schools in that way. Of course, the poor will get poorer and get a much lower quality education over time, as the wealth disparity is not just from ISD to ISD as it is now, but from neighborhood to neighborhood even.

[hoffdano]

Originally Posted by mimimomx3

Governments borrow money by issuing bonds. They pay interest, determined by their creditworhiness, to the investors who buy the bonds. Who pays for the interest? We do. In the sense that most taxpayers and citizens don't vote even in MAJOR elections, the chances of them voting in a bond election, which are usually put on the ballot during a slow election cycle, bonds are passed by a very small percentage of the population.


I don't understand what is 'unworkable' about asking developers to pay their fair share of developing and creating a community where none existed before. The Travis County Appraisal office has done a great job of figuring out how to tax me and you on our property. Perhaps they could apply their taxing wisdom to taxing developers in the same way.

I wouldn't be surprised at all for developers to suddenly 'go out of business' and evade their responsibility- it happens all too frequently. I would suggest that before a developer clears one field or chops down one tree, they give a cash deposit on the amount they'll owe toward building the infrastructure for their development, as calculated by the omnipotent TCAD.

Easy, but politically impossible, as I'm sure the developers have many more friends at city hall than I do.

Calculating "fair share" is the hard part. So a parcel of land just beginning development, that might take 10-20 years to build out - how do you decide what is "fair share?" How many schools are required (and where) would be influenced heavily by what else is going on. Or do you simply say every lot is worth a fixed sum of money?

I have no reason to defend developers. It is pretty silly to even think that the costs might NOT be passed on to buyers. Of course they will. Just like any other costs the developer incurs.

One of the better aspects of school district bonds is that they are usually voted on about 2-3 years in advance of need. It is a reasonably short planning window that has uses up to date demographic data for forecasting. A well run school district will not try to sell bonds for projects much more than 5 years away because the data isn't reliable beyond that. It typically takes 2 years to build an elementary or milddle school - perhaps 3 for a high school. Asking a developer to cough up significant money for uncertain future development is tough to do.

[hoffdano]

Originally Posted by Trainwreck20

Should make bonds voted on during bond elections easy to defeat, too, shouldn't it?

Agree completely.

Low turnout or high - it is a election and voters should get out and say what they want.

[mimimomx3]

Originally Posted by Trainwreck20

Should make bonds voted on during bond elections easy to defeat, too, shouldn't it?

It is easy to SAY that changing the system is easy, but there are all sorts of details that are not that simple. So, say I am the developer of a Circle C ish type of development. I will have to pay for schools - elementary, middle, and High school - long before they will be needed, and base their size on some assumptions of the future. But if that is being paid for solely by the new residents, then I am NOT going to turn it over to the city/state/school district. Heck, I am going to set up a MUD and tax my residents and build/run my own school and prvent the ISD from using/running it. The existing ISD would have NO ability to rezone the school and use it,either. Why, I guess I could CREATE my own little school district, too (don't really know if that is possible, but would probably be made possible if developers had to pay for the schools). We are heading toward liberitarian schools in that way. Of course, the poor will get poorer and get a much lower quality education over time, as the wealth disparity is not just from ISD to ISD as it is now, but from neighborhood to neighborhood even.

Well, continuing the way we are, operating under wildly growing deficits, will make everyone poorer and less educated.

[mimimomx3]

Originally Posted by hoffdano

Calculating "fair share" is the hard part. So a parcel of land just beginning development, that might take 10-20 years to build out - how do you decide what is "fair share?" How many schools are required (and where) would be influenced heavily by what else is going on. Or do you simply say every lot is worth a fixed sum of money?

I have no reason to defend developers. It is pretty silly to even think that the costs might NOT be passed on to buyers. Of course they will. Just like any other costs the developer incurs.

One of the better aspects of school district bonds is that they are usually voted on about 2-3 years in advance of need. It is a reasonably short planning window that has uses up to date demographic data for forecasting. A well run school district will not try to sell bonds for projects much more than 5 years away because the data isn't reliable beyond that. It typically takes 2 years to build an elementary or milddle school - perhaps 3 for a high school. Asking a developer to cough up significant money for uncertain future development is tough to do.

Again, TCAD has no problem at all coming up with my fair share of property taxes.

Whether their costs are passed on to their buyers or not is a business decision for them. Really, they should be. What business is it of mine to pay for a school in Hutto or Bastrop (no offense against Hutto or Bastrop, both lovely communities)?

Again, why is it 'tough' to ask a developer to cough up money for schools and infrastructure, but not tough to ask you or me?