{"id":1238,"date":"2016-04-28T09:09:09","date_gmt":"2016-04-28T14:09:09","guid":{"rendered":"http:\/\/truthinaddison.com\/?page_id=1238"},"modified":"2016-04-28T09:09:09","modified_gmt":"2016-04-28T14:09:09","slug":"raising-taxes-and-making-mud-to-hide-it","status":"publish","type":"page","link":"http:\/\/truthinaddison.com\/?page_id=1238","title":{"rendered":"RAISING TAXES and Making Mud to Hide It"},"content":{"rendered":"

RAISING TAXES and Making Mud to Hide It
\n<\/strong>By Susan M. Halpern
\n<\/strong>Former Addison Councilmember (1992-1999)<\/strong><\/h3>\n

\u00a0<\/strong>Since Todd Meier has been mayor, Addison\u2019s taxes have increased by about 28.8%. During the past two years, Addison\u2019s taxes have increased by more than 7%.\u00a0 At the same time, this Council has overspent the budget each of the last two years by almost $2 million.<\/p>\n

During the last fiscal year, Meier arranged a 1 cent tax rate decrease that he touted last year in his no-opponent campaign, never revealing the fact that it was funded out of Addison\u2019s reserves. That left the misimpression that it was somehow a sign of fiscal health. It wasn\u2019t.\u00a0 I and others warned that cutting the rate for political purposes was inappropriate, and sure enough, this year they had to raise Addison\u2019s tax rate dramatically, ultimately setting it above the \u201crollback rate\u201d for the first time in Addison\u2019s history.<\/p>\n

This evidences an irresponsible budgeting process and a \u201ctax and spend\u201d philosophy. It doesn\u2019t reflect well on the incumbents, so they and their supporters keep muddying the waters about the budget, presumably to avoid talking about the uncomfortable reality described herein.\u00a0 So, let\u2019s clear up a few \u201cmyths\u201d that have been thrown around.<\/p>\n

First, I\u2019m talking about Addison\u2019s taxes only, i.e., taxes imposed by Addison\u2019s Council on Addison residents. I\u2019m not talking about taxes imposed by other taxing units in Dallas County.\u00a0 If you look on the back of your tax bill, you\u2019ll see your taxes broken down by taxing unit.\u00a0 You can easily see that Addison\u2019s taxes have been on the rise.<\/p>\n

Second, taxes have risen in Addison because Meier and his cadre have passed budgets that have raised your taxes. Period.\u00a0 They\u2019ve known exactly what they were doing.\u00a0 They were 100% in control of the decision to impose higher taxes on Addison residents.<\/p>\n

Third, the Addison taxes you pay are the product of the assessed taxable value (set by the Dallas County Appraisal District) multiplied by Addison\u2019s tax rate (set by Addison\u2019s Council). Now, it is true that Addison doesn\u2019t control the DCAD values.\u00a0 However, that DOES NOT mean that higher taxes in Addison were DCAD\u2019s call.\u00a0 The decision to raise taxes in Addison was made by Addison\u2019s Council.\u00a0 They are 100% in control of the taxes you pay as an Addison resident.<\/p>\n

I participated as a councilmember in seven budget cycles in Addison. Here\u2019s how it works.\u00a0 The Council starts with the DCAD values.\u00a0 Next, the Council considers the revenue it needs for the upcoming year.\u00a0 That includes for employee compensation, special events, capital improvement, maintenance and all the other items that appear in the budget.\u00a0 The Council works its way through proposed projects and other issues, making policy decisions along the way.\u00a0 That allows the Council to approximate the revenue Addison will need for the upcoming year.<\/p>\n

And make no mistake about it, it is the Council<\/u> that makes the policy decisions and sets the priorities that ultimately form the budget, not the staff.\u00a0 The staff does prepare an initial draft of the budget.\u00a0 But that doesn\u2019t happen in a vacuum; it happens with an understanding of the Council\u2019s direction on various issues. So, when Meier tried to pawn Addison\u2019s ongoing employee compensation issues off on then-City Manager Lea Dunn\u2019s budget draft, it was utter nonsense.\u00a0 Lea Dunn prepared her draft budget after receiving clear direction that Meier and his obedient incumbents weren\u2019t going to address the employee compensation issue at anywhere near the magnitude that was needed.\u00a0 Had Lea presented something different, Meier and his cadre would have accused her of insubordination.<\/p>\n

In any event, the process is fluid, and the planning occurs all during the summer. Once you have the DCAD values and your approximation of what Addison needs in terms of revenue, the tax rate becomes a function of math.\u00a0 It is the last variable, very much determined by the other two numbers, i.e., the DCAD values and the discussion of total revenue.\u00a0 Essentially, the Council \u201cbacks into\u201d the tax rate.\u00a0 This process is repeated over and over during the summer, as the DCAD number becomes firmer and as the Council considers the projects and other issues that will define the total revenue Addison needs.\u00a0 A variety of rates are considered as projects\/issues are added or eliminated.<\/p>\n

The last consideration is critical: the tax rate must be responsibly managed. Rising and falling DCAD values have an obvious impact on the tax rate that will be used.\u00a0 Higher DCAD values accompanied by a lower tax rate could yield flat taxes, i.e., flat revenue.\u00a0 Lower DCAD values and a higher rate could mean flat taxes or increased taxes, depending on the change in the rate.\u00a0 You get the idea: you have to look at both components of total revenue.<\/p>\n

The tax rate must be managed so as to avoid setting it above the \u201crollback rate,\u201d a rate set by statute that protects taxpayers from precipitous increases in the tax rate. If Addison\u2019s tax rate exceeds the rollback rate, taxpayers can force a rollback election which, if successful, would force the tax rate down to the rollback rate.\u00a0 A rollback election injects real chaos into any municipality\u2019s operations, because it places total revenue in doubt until the issue is decided.\u00a0 My Councils were always careful to manage the rate responsibly to avoid putting Addison in that situation.<\/p>\n

Meier and his cadre are apparently unconcerned, because this year, they set Addison\u2019s tax rate above the rollback for the first time in Addison\u2019s history. By quite a lot, too.\u00a0 That is not a sign of a healthy or responsible budget process.\u00a0 The fact that you\u2019ve heard nothing about it is just another example of how information is withheld by the current regime.<\/p>\n

Another misdirection is reference to Addison\u2019s \u201cbalanced\u201d budget. It is true that Addison\u2019s budget is balanced, it is a requirement for municipalities under Texas law.\u00a0 My problem is HOW this Council has met that requirement.\u00a0 Last year, they took $800,000 out of Addison\u2019s reserves to \u201cbalance\u201d the budget, with about half of that funding Meier\u2019s 1 cent tax rate cut.\u00a0 Then, they overspent that budget by about $915,000.\u00a0 That means that more than $1.7 million was funded from sources other than current expected revenues.\u00a0 Sorry, but that\u2019s irresponsible budgeting.<\/p>\n

Oh sure, they passed a budget amendment to account for the $915,000 (which paid for Kanter and Lea Dunn\u2019s severance, i.e., Meier\u2019s political agenda, to name a few). So we were still \u201cbalanced.\u201d\u00a0 But anyone can see that you can\u2019t keep delivering tax rate cuts to your political benefactor and overspending current revenues.\u00a0 Among other things, it isn\u2019t sustainable.<\/p>\n

This reckless budgeting and its concealment from Addison\u2019s citizens are not taking Addison \u201cin the right direction,\u201d nor can Addison \u201cstay\u201d this course. The \u201ctax and spend\u201d policies of Meier and his obedient incumbents are harming Addison, and hamstringing our future.<\/p>\n

Addison can and must do better.<\/p>\n

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