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OK, back on topic. Why does almost everyone on this thread plan to move to a low tax area? In a low tax state, there's not much you'll get, as you would should you need or just enjoy life more in a state with more services available. Doesn't it stand to reason that if you move to a high tax place, you'll enjoy the benefits of that place without having lived (or paid taxes in) there your whole life? In short, it seems to me that in a high tax entity that you've just moved to, they can't tax you enough in your remaining years to "catch you up" for all the new benefits you might now enjoy.
We could call this strategy the "make your money in Texas, enjoy your retirement in California" strategy. Let the hatred begin...
I think while earning high income, the taxes are just part of the earnings overhead and are absorbed easier. As I look at what I need to retire, and also cost of travel, etc., it makes sense to try to achieve the lowest living overhead possible, balanced of course with lifestyle needs and proximity to airports, healthcare, etc.
There are a lot of small dumpy redneck towns in Texas, like Cisco TX, where you can buy a home for under $100K and live dirt cheap. But who wants to live in Cisco TX (between Ft. Worth and Abilene). That's why, for me, something easy striking distance to Austin, maybe an hour or so away, could work.
Or, draw a Triangle between Houston, DFW, Austin/San Antonio and anywhere inside that triangle or outside it within an hour of a big city would be the "start from scratch" searching parameter for me.
Okay, let's back up and do this step by step. Stop me where it breaks down for you.
I appreciate that this is a sincere effort to look at how this works.
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Originally Posted by Novacek
1. Overall, the cities expenses and revenues are a wash. No one (we hope) is skimming off the top or extracting profits.
2. The costs to serve residents vary, as do the costs to serve non-residents who come into the city.
3. Revenues per capita also vary, both for residents and non-residents. I'll definitely go so far as to admit non-residents may/do represent some amount of revenue.
4. Both of these occur in a spectrum, and you'll have individuals who subsidize others , many that are basically in the middle, and those that are a greater cost to the city than what they bring in.
I'm OK so far but I'd broaden this from individuals to neighborhoods. Obviously not all neighborhoods have the same type of people in them, but what we're after here is 'what is the revenue versus outlay picture for any given area of town.' Looking at the 2014 budget we can at least see where the budget is allocated, but we don't have data (or else would have to spend days digging through individual departmental data) to conclusively prove anything. So we are definitely in the realm of speculation here.
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5. (4) Is not necessarily based on socio-economic standing. You could have the wealthy that cost the city and the less well off actually subsidizing others (based on how much revenue they represent vs. how much they cost to serve).
Sure. It is also not a stretch to assume that there are several advantages from a city services point of view of population density. There is simply 'less stuff' between the city and the resident if in going from A to B you can reach 200 residents rather than 20. But this is still a generalization: the 200 residents you reach in upper Manhattan may be assumed to be cash cows for New York City, while the 200 UT students in a dorm are not. Similarly, not all sprawl is created equal. Just like mass transit or urban planning, no matter what your strategy is, there are good ways and bad ways of achieving that strategy as far as efficiency is concerned.
If you look at the overall picture of where the city's money goes, by far the biggest chunk at 36% of the city's budget, 1.26 billion dollars, goes to Austin Energy. The next two largest expenses are 'General fund operations' at 21% and 'Austin Water utility' at 13%. All the other items are between 1 and 7 percent, mostly 1-4%. Austin energy does not serve all of Circle C, but it does serve part of it, and Austin Water does serve all of it as far as I know.
Per capita, we certainly use more water and electricity than your condo or apartment dweller because we have more space that needs to be watered or cooled - but we pay out of pocket to do that, and respond to market forces in terms of the HOA changing the rules to not only permit but encourage xeriscaping. So to the extent that we're consuming more of those resources, we're paying for the privilege - that seems to me the two biggest areas of inefficiency, but nobody is subsidizing that. Here in my part of Circle C, we don't have Austin energy at all, so we can't take advantage of things like subsidies for solar panels and they have no support burden for us.
That leaves the general fund as what we're looking at for typical city expenses: Police, Fire, EMS, Library, Parks and Recreation. So for 1/5 of the city budget, the question here is how many of those services do we consume relative to our tax base?
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Okay, will you admit
6. In the spectrum of (4) one class that vastly subsidizes others is those individuals in dense downtown development. These are expensive residences, and bring in high revenues. In addition, they spend less on goods that don't bring money to the city (e.g. gas, which the city doesn't see sales tax for).
Additionally, the cost to provide services to them is low. A beat cop on foot or bicycle can easily cover multiple condo buildings with thousands of people. The buildings are highly fire resistant, adhere to high fire codes, include sprinkler systems, etc. Running electricity from the substation to the building requires minimal linear feet of wire, etc.
?
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In addition, they spend less on goods that don't bring money to the city (e.g. gas, which the city doesn't see sales tax for).
This is where we get into the land of academic assumptions and I am hesitant to draw too many conclusions either on your version of them or mine.
If we can assume that, because they live downtown, they never have to leave, then they surely spend less on gas. But they also live in smaller houses and are less likely to have families, or if they do, those families are smaller. How do we compare your hypothetical gas savings against sales tax revenue from an extra person over their life in the city? I don't even know, but it seems sufficiently difficult that we can't just say 'driving less costs the city less across the board' because that factor does not exist in a vacuum.
Your beat cop can reach many more people in a shorter time, but he also has to reach many more people in a shorter time because the type and frequency of crime is much higher. The nearest police station is 15-20 minutes east of here and our lack of crime is one of the big draws to the area.
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The buildings are highly fire resistant, adhere to high fire codes, include sprinkler systems, etc
I don't see a lot of Circle C catching fire and houses out here have to be built to code just as they do anywhere else - just not multifamily code, so okay, no sprinkler systems. Maybe there's an argument here for Steiner, but it doesn't come up much here.
I can see this configuration being different elsewhere where the sprawl is much larger, but at least in our case, the extent to which we use more stuff is offset by the fact that we pay a lot more per capita for that stuff.
I think while earning high income, the taxes are just part of the earnings overhead and are absorbed easier. As I look at what I need to retire, and also cost of travel, etc., it makes sense to try to achieve the lowest living overhead possible, balanced of course with lifestyle needs and proximity to airports, healthcare, etc.
Steve, your reply was to an assumption that Location XYZ with 2X taxes results in 2X services. As I've lived across the country, I haven't found that to be the case. The money inevitably goes to things that don't benefit me at all, and certainly no where near a direct ratio to the increase in taxes.
The other variable is that in retirement, income will drop, but wealth will probably be as great as it ever was.
Seems to me the tax increases for living in a high tax area are marginal, i.e: I pay 7000 here now, could pay 10,000 in the foreseeable future, and would pay 14,000 moving to a high tax area down the road (all numbers made up for the sake of argument).
But the benefits are magnitudes higher: maybe the high tax place has a world class art museum in town; that's not going to happen here or in Cisco for any amount of tax money. Or, maybe it's a better hospital that saves my life. Or, maybe it's the fact that in a few states, one can qualify for medicaid to pay for a spouse's nursing home care without first having to beggar oneself; that won't happen in Texas or Louisiana in my lifetime. A difference such as that is magnitudes more valuable if it turns out you need it while a tax savings of 5000 dollars is incremental. Heck, even something as simple as public transportation might be a quality of life issue that makes all the difference: having a commuter rail system might make an old man mobile and happy after they take away his driver's license. Don't say it couldn't happen to you.
Seems to me the tax increases for living in a high tax area are marginal, i.e: I pay 7000 here now, could pay 10,000 in the foreseeable future, and would pay 14,000 moving to a high tax area down the road (all numbers made up for the sake of argument).
But the benefits are magnitudes higher: maybe the high tax place has a world class art museum in town; that's not going to happen here or in Cisco for any amount of tax money. Or, maybe it's a better hospital that saves my life. Or, maybe it's the fact that in a few states, one can qualify for medicaid to pay for a spouse's nursing home care without first having to beggar oneself; that won't happen in Texas or Louisiana in my lifetime. A difference such as that is magnitudes more valuable if it turns out you need it while a tax savings of 5000 dollars is incremental. Heck, even something as simple as public transportation might be a quality of life issue that makes all the difference: having a commuter rail system might make an old man mobile and happy after they take away his driver's license. Don't say it couldn't happen to you.
Not everyone feels that way though. And those that think they can get more for their money leave.
If you are happy with the state of things then by all means stay and enjoy the services.
Not everyone feels that way though. And those that think they can get more for their money leave.
If you are happy with the state of things then by all means stay and enjoy the services.
Actually, I don't think of Austin as particularly high service OR high tax. The COA does have a lot of employees and the property valuations and taxes are lower in rural towns, I'll grant you that.
I appreciate that this is a sincere effort to look at how this works.
I'm OK so far but I'd broaden this from individuals to neighborhoods. Obviously not all neighborhoods have the same type of people in them, but what we're after here is 'what is the revenue versus outlay picture for any given area of town.' Looking at the 2014 budget we can at least see where the budget is allocated, but we don't have data (or else would have to spend days digging through individual departmental data) to conclusively prove anything. So we are definitely in the realm of speculation here.
Sure. It is also not a stretch to assume that there are several advantages from a city services point of view of population density. There is simply 'less stuff' between the city and the resident if in going from A to B you can reach 200 residents rather than 20. But this is still a generalization: the 200 residents you reach in upper Manhattan may be assumed to be cash cows for New York City, while the 200 UT students in a dorm are not. Similarly, not all sprawl is created equal. Just like mass transit or urban planning, no matter what your strategy is, there are good ways and bad ways of achieving that strategy as far as efficiency is concerned.
If you look at the overall picture of where the city's money goes, by far the biggest chunk at 36% of the city's budget, 1.26 billion dollars, goes to Austin Energy. The next two largest expenses are 'General fund operations' at 21% and 'Austin Water utility' at 13%. All the other items are between 1 and 7 percent, mostly 1-4%. Austin energy does not serve all of Circle C, but it does serve part of it, and Austin Water does serve all of it as far as I know.
Per capita, we certainly use more water and electricity than your condo or apartment dweller because we have more space that needs to be watered or cooled - but we pay out of pocket to do that, and respond to market forces in terms of the HOA changing the rules to not only permit but encourage xeriscaping. So to the extent that we're consuming more of those resources, we're paying for the privilege - that seems to me the two biggest areas of inefficiency, but nobody is subsidizing that. Here in my part of Circle C, we don't have Austin energy at all, so we can't take advantage of things like subsidies for solar panels and they have no support burden for us.
That leaves the general fund as what we're looking at for typical city expenses: Police, Fire, EMS, Library, Parks and Recreation. So for 1/5 of the city budget, the question here is how many of those services do we consume relative to our tax base?
This is where we get into the land of academic assumptions and I am hesitant to draw too many conclusions either on your version of them or mine.
If we can assume that, because they live downtown, they never have to leave, then they surely spend less on gas. But they also live in smaller houses and are less likely to have families, or if they do, those families are smaller. How do we compare your hypothetical gas savings against sales tax revenue from an extra person over their life in the city? I don't even know, but it seems sufficiently difficult that we can't just say 'driving less costs the city less across the board' because that factor does not exist in a vacuum.
Your beat cop can reach many more people in a shorter time, but he also has to reach many more people in a shorter time because the type and frequency of crime is much higher. The nearest police station is 15-20 minutes east of here and our lack of crime is one of the big draws to the area.
I don't see a lot of Circle C catching fire and houses out here have to be built to code just as they do anywhere else - just not multifamily code, so okay, no sprinkler systems. Maybe there's an argument here for Steiner, but it doesn't come up much here.
I can see this configuration being different elsewhere where the sprawl is much larger, but at least in our case, the extent to which we use more stuff is offset by the fact that we pay a lot more per capita for that stuff.
I think I'm going to reply to this in a new thread, look for that soon.
Fayetteville and Northwest Arkansas aren't high on the "hip cities" radar, but there is a lot here we like that is very similar to the "old Austin" people always talk about missing. We have the limestone/karst hill country environment, clear lakes and streams, big college town with a hip downtown vibe, huge microbrew scene (for a metro this size), lots of start ups and a healthy economy. Its basically four big towns lined up together into a metro of 500k.
There is amazing scenery, whitewater, cool clear float rivers, rock climbing (yay) all within an hour of town.
25% of the University of Arkansas in Fayetteville is made up of Texas kids, like the one in the first video here who started an outdoors clothing company:
Fayetteville and Northwest Arkansas aren't high on the "hip cities" radar, but there is a lot here we like that is very similar to the "old Austin" people always talk about missing. We have the limestone/karst hill country environment, clear lakes and streams, big college town with a hip downtown vibe, huge microbrew scene (for a metro this size), lots of start ups and a healthy economy. Its basically four big towns lined up together into a metro of 500k.
There is amazing scenery, whitewater, cool clear float rivers, rock climbing (yay) all within an hour of town.
25% of the University of Arkansas in Fayetteville is made up of Texas kids, like the one in the first video here who started an outdoors clothing company:
Fayetteville has has struck me as having a lot of similarities of Austin. I've gotten the impression it's going to get more popular.
It does. There is a well-established older set of "hippies" who came to the area with the "back to nature" movement in the 70s. The local natural foods co-op here is fantastic (lets hope it survives the new Whole Foods being built up the street).
The Farmer's Market here on the town square is one of the best I've ever been to. Lots of outdoorsy folks, pretty swell live and let live environment. The broader metro is more conservative, but Fayetteville is a similar "blue dot" as Austin. Very strong arts community here.
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