Prepare yourselves

Dear Editor,

Prepare yourselves homeowners!! Higher taxes are coming.

Last Wednesday’s article dealing with higher real estate taxes certainly got my attention as I’m sure it must have gotten the attention of most readers around the county.

Personally, I, for one. have suspected this was an issue long overdue so that the ugliness of it comes as no surprise now that it is finally beginning to show itself. Now, make no mistake; this is only the tip of the iceberg. One can very easily visualize real estate taxes doubling and beyond in the not too distant future.

“What brings about such a prediction?” one may ask. To answer that question one would need only to know where the finances to support our police dept., public schools, library, and a host of other community services come from.

Answer: real estate taxes.

When salaries for employees who render these services increase then our local public officials need to increase the budget accordingly. Thereby providing more revenue to flow into the community treasury. That additional revenue, in case you haven’t already guessed, comes from property taxes.

One national survey shows that, on average, the origin of this revenue to be divided 65% and 35%, the higher burden on commercial property leaving the lesser obligation to the individual home owners.

Inflation plays a role in all of this, of course. as, in addition to the aforementioned salary increases, any increase in the myriad of items needed to deliver our services, from school books to energy to heat/air condition our public buildings leads to budget increases.

Only a blind person failed to recognize the industrial rust belt that had encrusted itself across America’s landscape; closed mills and manufacturing plants, an auto industry shrinking from seven companies down to 2 and even the remaining 2 having to downsize in order to make room for toyota, honda, nissan, Volkswagen, and a score of other imports. I, for one, miss not being able to drive a Mercury. Does anyone reminisce the absence of oldsmobile, De Soto, Packard or Studebaker from America’s roadways.

Be that as it may be, President Trump addressed that ‘Rust Belt’ problem (albeit to a lesser degree) bringing unemployment to its lowest level in thirty years.

But now America is faced with a new source – The Retail Rust Belt.

If you do any traveling at all you can’t keep from noticing the profusion of empty store fronts plastered with ‘for rent’ signs decorating the local shopping districts in cities, towns, and villages across this nation.

Take, for instance, the North Warren mall. Was it that many years ago that it flourished while enjoying 100% occupancy? Like the dinosaurs of bygone ages it has slowly evolved into extinction with Bon Ton sputtering its last gasps of life.

There are several causes for its demise and of retail in general; principal among which is the numerous cases of merger and acquisition that’s taken place over that same thirty year period mentioned earlier. Large corporations gobbling up smaller businesses to the extent that it leaves consumers hard put to shop with the ‘Mom and Pop’ diner, hardware store, coffee shop or grocery store. That being so because they have mostly been merged into large corporations’ chain magnates.

Now we are entering into a new chapter of the retail revolution. Yes! Here in the throes of the hi-tech explosion shoppers can now leave their cars in the garage and expedite practically all their shopping needs by merely picking up their telephone or turning on their computer and letting the internet take over. Hail to all those millionaires who hold Amazon stock! Mom can now enjoy a host of other pastimes with the time she saves by not engaging in the ‘rigor’ of going out to shop. Ahh isn’t life beautiful?

But before you start to swoon, let’s take a good look at this wonderful modern innovation from another perspective.

For every tube of toothpaste, pair of shoes, Cashmere sweater or any other commodity negotiated through the internet another nail is driven into the coffin of local retail. So what you say. Hold on, you’re about to find out.

When a store, any store, closes people lose jobs for starters. It might involve just a few or in the case or a large retail facility, several. This would seem to cancel out the positive job gaining improvements in any manufacturing rust belt reversals previously mentioned.

The next step on the store closing process people lose jobs for starters. It might involve just a few or in the case of a large retail facility, several. This would seem to cancel out the positive job gaining improvements in any manufacturing rust belt reversals previously mentioned.

The next step in the store closing process is that the building owner ceases to collect rents. Of course the owner is still obligated to pay the commercial real estate taxes on the property. Taxing authorities do not regard a building in a different light just because it’s no longer occupied.

Now, the owner can try to re-let the store to another tenant, but, until and if that ever happens he/she must continue to pay those taxes out of his/her own pocket even though the benefit of income from rent no longer exists. How long can a landlord hold out under these circumstances? In many cases the owner throws in the towel and declares bankruptcy, leaving the local govt. With a white elephant that represents a liability in that it no longer generates revenue but instead creates a cost burden for its’ upkeep and repair. After several attempts to auction off the property is unsuccessful, the building falls prey to the wrecking ball, thereby insuring that the resultant empty lot will indefinitely fail to produce revenue.

What has just been described is actually occurring across America. Slowly but on a continues basis. By the way, the lost revenue in this instance is from the 65% portion of the tax base mentioned earlier. At this point, if we were to multiply this traumatic occurrence by a growing level of some significance then something has to give. The town fathers can elect to either shift the lost commercial real estate tax over 35% side meaning you know who – the home owner. Or, impose budget cuts that translate into regrettable cuts in the social services we have all enjoyed and counted on. Among areas considered for trimming; school class size heading upwards towards fifty students per teacher. Not hiring new policemen to replace those retiring. How about closing down the library or community center? The choices are rather frightening, don’t you think? The message that appears to come out of all of this is to use the phone to call your friends, let your kids use the computers to help them with their homework assignments, support your local retailers and go shopping.

Jim Dowd,

Warren

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