Montgomery County Councilman Neal Potter, concerned that voters will approve the TRIM (Tax Relief in Montgomery) ballot question in November because they are "mad at the government," did some arithmetic the other day.
Potter says he is concerned that voters will try to "starve the government" by approving a rollback in property tax rates when the solutions to rising tax bills are more complicated and lie elsewhere.
It is more than a philosophical question for Potter, an economist, a Democrat and the author of some of the council's controversial tax proposals, because Potter's political fortunes could rise and fall with taxpayer's sentiments.
Here are Potter's figures:
Since 1973, the average homeowner's property tax bill in Montgomery County has risen 17 percent above the rise in the cost of living, although some people say the rise is considerably more. But local government expenditures, also adjusted for inflation, have increased only 4 percent during the same period.
At least 11 percent of the homeowner's tax bill increases can be accounted for by under-assessment of commercial and industrial properties and the decline in apartment assessments, according to Potter's figure.
The inequities, according to the statistics, can be illustrated even further:
While the number of single-family residences increased by only 12 percent during the five-year period, tax revenues from these properties grew 57 percent.
The number of apartments increased 27 percent, yet the tax assessments of apartments dropped by one-half of one percent during the same period.
(Apartments were constrained by rent controls that were lifted at the end of 1977).
Further, the number of commercial and industrial properties grew by 18 percent, but the assessments of these properties increased only 15 percent.
The under-assessment of apartments and commercial-industrial properties resulted in a $707 million decline in the property tax base in 1978, Potter's statistics show. The result, according to Potter, was that homeowners have had to make up for that decline by paying more on their own tax bills.
Potter has compiled the figures to support his argument that the fair market value of industrial and commercial properties needs to be calculated "with greater depth." Such accuracy is more difficult for commercial and industrial properties because of their relatively low turnover.Single-family homes change hands more often and thus produce more current market values.
Potter's figures are adjusted for the cost of living which has risen 45 percent in the metropolitan area since 1971, according to the Consumer Price Index.
But not everyone sees the figures from the same perspective, and it is this difference of interpretation that has inspired the so-called taxpayers' revolt.
Kari Schlotterbeck, head of the Taxpayers League, which mounted the successful petition drive for the TRIM ballot referendum, said recently that he looked at county government budgets and saw budgets and taxes consisttently going up while the value of pay checks and real income has steadily declined.
"How long can we permit our country government to continue taking more in taxes from less real income?" Schlotterbeck said.
The Taxpayers' League ballot Question E would roll back the property tax rate from $2.60 per $100 assessed value to $2.25 and would permit increases above that rate only by a vote of six of the seven County Council members after a public hearing.
The business community, which is showing increasing sympathy with the TRIM posture, has still another argument. Republican Jackie Simon, who is opposing Potter for the County Council, has said that part of the solution lies in promoting increased commercial and industrial economic development to help relieve the homeowners' property tax burden.
As one frustrated county resident said recently, the issue is so complex it is difficult for many voters to decide whose economics to believe.