Friday, December 24, 2010

Local governments push up property taxes steeply to pay for public employee pensions

Jeannette Neumann has a detailed article on the front page of the Christmas Eve Wall Street Journal, “Pensions push property taxes higher; cities tap homeonwers for revenue as workers’ retirement, health costs rise”, link here  (may require paid subscription to see entire article).

There’s no question that politicians have been unwilling to fund municipal and state employee (fire, police, teachers) pensions honestly, so property taxes are rising, in some cases (in PA and IL) by up to 13% in one year, just to pay the promises. And many states are looking more at “defined contribution” strategies for new workers. It’s easy to imagine how this can be twisted into a “family values” argument; our society expects workers to provide their own retirement through earning pensions or now 401(k)’s, can’t depend on “family.”

Another possibility is that local governments will make more of the idea of "commercial use" and could try to charge more for homeowners who operate home based businesses (even blogging), or who telecommute.

Similarly, on Dec. 21, the Washington Post ran an editorial “For Maryland taxpayers and state workers, pension tension”, here. Recently, the DC area media have covered plans in Virginia to switch new workers much more to a defined contribution system.

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