<HEAD><TITLE>Re: TownTalk Digest, Vol 9, Issue 13</TITLE>
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<DIV>Clearly we have several proponents of the LVT. Is there anyone out there who can provide a counter point so we can hear both sides of the issue?</DIV>
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<DIV>Bruce<BR><BR><BR>-----Original Message----- <BR>From: "Jack R. Jones" <JRJONES@SMART2.NET><BR>Sent: Apr 12, 2006 1:31 AM <BR>To: TownTalk@riverdale-park.org <BR>Subject: Re: [RP TownTalk] TownTalk Digest, Vol 9, Issue 13 <BR><BR></DIV><ZZZHTML><ZZZHEAD>
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<BLOCKQUOTE cite="" type="cite">Send TownTalk mailing list submissions to<BR><X-TAB> </X-TAB>TownTalk@riverdale-park.org<BR><BR>To subscribe or unsubscribe via the World Wide Web, visit<BR><X-TAB> </X-TAB>http://riverdale-park.org/mailman/listinfo/towntalk_riverdale-park.o<SPAN></SPAN>rg<BR><BR>or, via email, send a message with subject or body 'help' to<BR><X-TAB> </X-TAB>TownTalk-request@riverdale-park.org<BR><BR>You can reach the person managing the list at<BR><X-TAB> </X-TAB>TownTalk-owner@riverdale-park.org<BR><BR>When replying, please edit your Subject line so it is more specific<BR>than "Re: Contents of TownTalk digest..."<BR><BR><BR>Today's Topics:<BR><BR> 1. Re: Fwd: PG Transit Plan meetings (Rob Oppenheim)<BR> 2. Re: Fwd: Arts District Hyattsville Grand Opening<X-TAB> </X-TAB>Information<BR> (Rob Oppenheim)<BR> 3. m-utc report from this week (David Hiles)<BR> 4. Re: m-utc report from this week (Gerard Kiernan)<BR> 5. Land Value Tax (Marc Molino)<BR> 6. Re: m-utc report from this week (bruce.wernek@mindspring.com)<BR> 7. Re: Land Value Tax (The Curries)</BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite"> 8. Re: m-utc report from this week (CHRISTINA DAVIS)<BR></BLOCKQUOTE>
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<DIV><I><B>Jack here in italic bold...so many thoughts and questions...I will try to answer them "expertly". And, as a connected whole...enjoy the wandering if it happens. I hope I have addressed all the questions and comments well, if not you know where I am. My customary charge is to sit and talk over a cup of coffee. Also check out the web links at the end.</B></I></DIV>
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<DIV><I><B>A. No one in Maryland has done it!</B></I></DIV>
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<DIV><I><B>Guess what? If no one is first...it will never happen. Imagine we could still be eating raw meat and vegetables and sitting in cold caves, afraid to take those burning limbs from that lighting struck tree.</B></I></DIV>
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<DIV><I><B>I personally thank the hominid that picked up that first burning branch, the one who ate the first oyster, et cetera.</B></I></DIV>
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<DIV><I><B>B. What are the advantages?</B></I></DIV>
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<DIV><I><B>LVT switches the the economic incentive. Economists would explain how income, sales, and property taxes are a dead weight on the economy but a land tax is not.</B></I></DIV>
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<DIV><I><B>I come at this more from the Social Ecologist view. People look for the least expensive or most profitable way of doing things. So they go to the high income or low income tax, to the low sales tax, to the low building tax, et cetera...myriad ways of moving to a better economic situation.</B></I></DIV>
<DIV><I><B>Land presents a problem for the running away solution, the land can not go with you. The solution is to make better use of the land, in fact the<U> highest and best use</U>...note also due to the economics of central places and markets, going to higher use will result in a loss of profit. LVT provides an economic thermostat that allows only the Goldilocks solution "just right"</B></I></DIV>
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<DIV><I><B>C. Taxes will go up!</B></I></DIV>
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<DIV><I><B>No! Not unless you want to raise them. It is recommended to go revenue neutral with a phase in period. Primary reason is to let people adjust from bad economic behavior to good economic behavior. To arrive at the effect on your own property taxes multiply 0.0148 (revenue neutral for 50%) times your land value and compare that amount to your current property tax to find if you pay more or less. Since the current rate is 65%, if I recall correctly, then the revenue neutral rate is 0.01924. I trust there is some astute mathematician out there to check my calculations.</B></I></DIV>
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<DIV><I><B>D. The effect is small and not worth doing.</B></I></DIV>
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<DIV><I><B>I disagree, the margins are very important, currently the average ratio of building value to land value is c. 2.5 to 1. At 65% $1.625/$100 from building and $0.65/$100 from land so the positive effect of $0.65 is protecting the situation from being even worse than were all the tax on improvements. Put all the tax on land and we raise the positive effect 250%. The effect is accumulative, were the town able to negotiate a land tax in lieu of the municipal portion of the sales tax and the income tax there would be additional positive effect. Where would people tend to shop if Riverdale Park had a 4% sales tax versus 5%? Would people want to move into RP because they would not have to pay a municipal income tax (= 60% of state tax). Would county jurisdiction people want to annex to Riverdale Park if they knew that an improvement to their house would not increase their property tax?</B></I></DIV>
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<DIV><I><B>E. Hyattsville and the LVT.</B></I></DIV>
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<DIV><I><B>I was at a town meeting in Hyattsville some time way back...about 30-50 people in attendance, my sense of the meeting was the majority of residents wanted the LVT but wanted to have it on commercial property only. Many felt that business should be treated different than residents. I feel that the dichotomies are not the classes of use but that they are the unused, the under-used, and the highest and best used land. The first two groups are benefiting from having low taxes while the land value climbs and they make their wind fall gains from speculation at the expense of those who use the land best and contribute to the economy. Industry and Commerce are not the bad guys. The bad guys are those who do nothing with their land and reap the profits created by those who contribute to the economy.</B></I></DIV>
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<DIV><I><B>An interesting aside on the paths of history. The legislator who got the enabling legislation for Municipalities passed was planning to do enabling legislation for counties the next session, but was appointed to a federal judgeship in Texas and so we are left with the oddity that the State and Municipalities can tax land at a different rate than improvements but the counties and Baltimore City can not.</B></I></DIV>
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<DIV><I><B>I gather from the history that the LVT was brought on in a PG County behind closed doors fashion and sprung on people with no warning or explanation, apparently this so infuriated the loosing faction that they spent years trying to get LVT outlawed...completely missing the benefit in their infuriation with the manner of its initiation which has no bearing on its merit. C'est la guerre.</B></I></DIV>
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<DIV><I><B>Meanwhile outside of Maryland is a different story, our northern neighbor Pennsylvania has a couple dozen jurisdictions with LVT (also Site Value Tax SVT) and to my mind to great examples</B></I></DIV>
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<DIV><I><B>1. Harrisburg which in the early 1980's was something like the next to worse city economic situation in the nation with several thousand vacant commercial properties with in 5-10 year period the number dropped to a couple hundred. I ran into a resident of Harrisburg at a LUTRAC conference in the 1990's and he told me people were actually abandoning the suburbs and moving back into the city. I am sure the Mayor's Office of Harrisburg would be willing to share their experience.</B></I></DIV>
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<DIV><I><B>2. Pittsburg (had LVT 1913 to c. 2000) set the scene...when a town goes with LVT (none to my knowledge have gone 100% yet) the range of increase in building permits in the 2 year period after adoption goes up by 65-75% of which 70-80% are improvements on existing buildings. Now...Pittsburg had a reassessment study on land and property after not doing any for something like 20-30 years. At the time Pittsburg's land to property tax ratio was 7 to 1 (which allowed it to weather the Rust Bust) everybody panicked at the high land tax and they shifted it all to property. With in a year their economy was dropping and the building permits had dropped to something like 50% of the National average (there is a case study being done).</B></I></DIV>
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<DIV><I><B>There are also over a 1000 Municipalities, States, Provinces, or Nations in the world that use LVT to good effect now, and the number grows every year. By all means Riverdale Park wait until Maryland is the last State in the Union, and Riverdale Park is the last Municipality in the State to adopt LVT...and even then it will not be done because everyone will have moved to a better place and there will be no one to vote for or against LVT.</B></I></DIV>
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<DIV><I><B>More Information on LVT</B></I></DIV>
<DIV><I><B>http://www.urbantools.org/</B></I></DIV>
<DIV><I><B>http://www.henrygeorgefoundation.us/</B></I></DIV>
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<DIV><I><B>And my precis of "Progress and Poverty" by Henry George</B></I></DIV>
<DIV><I><B>or you can read the entire book which I highly recommend,</B></I></DIV>
<DIV><I><B>as I could not do it justice in such a short space.</B></I></DIV>
<DIV><I><B>http://www.tpaine.org/tphgprop.htm</B></I></DIV>
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<DIV><I><B>If you made it this far, God Bless you for your Curiosity and Patience.</B></I></DIV>
<DIV><I><B>Sincerely,</B></I></DIV>
<DIV><I><B>Jack R. Jones</B></I></DIV>
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<BLOCKQUOTE cite="" type="cite">Message: 5<BR>Date: Tue, 11 Apr 2006 07:32:34 -0400<BR>From: "Marc Molino" <mmolino54@hotmail.com><BR>Subject: [RP TownTalk] Land Value Tax<BR>To: gerardkiernan@earthlink.net, TownTalk@riverdale-park.org<BR>Message-ID: <BAY107-F15BAC1F27DD29635B4B071A5CD0@phx.gbl></BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite">Content-Type: text/plain; format=flowed<BR><BR>Putting aside the individual personalities and which policies they support,<BR>could someone explain to me why a land value tax is a bad idea, or better<BR>yet, by what reasoning have previous town councils voted against<BR>implementing an LVT?<BR><BR>Because a theory sounds good, doesn't mean it's practial; likewise, just<BR>because someone voted against it, doesn't mean it's a bad idea. I would<BR>assume one argument might go that if Riverdale Park were the only<BR>municipality to have an LVT, developers might go elsewhere to purchase<BR>property first.<BR><BR>Anyhow, I'd appreciate hearing a little more on why Riverdale Park has voted<BR>against such an option in the past. At this point, I am neither for nor<BR>against an LVT. Mostly, I just miss the Riverdale Bookstore and the bicycle<BR>store.<BR><BR>Kindly,</BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite">Marc Molino<BR></BLOCKQUOTE>
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<BLOCKQUOTE cite="" type="cite">Message: 6<BR>Date: Tue, 11 Apr 2006 07:54:05 -0400 (GMT-04:00)<BR>From: bruce.wernek@mindspring.com<BR>Subject: Re: [RP TownTalk] m-utc report from this week<BR>To: David Hiles <hilesd@mindspring.com>, TownTalk@riverdale-park.org<BR>Message-ID:<BR><X-TAB> </X-TAB><17397168.1144756446091.JavaMail.root@mswamui-andean.atl.sa.earth<SPAN></SPAN>link.net><BR><X-TAB> </X-TAB><BR>Content-Type: text/plain; charset=us-ascii<BR><BR>David<BR><BR>Won't this LVT increase our property taxes as well? Riverdale Park has one of the highest property tax rates in the state. I am not in favor of any increases in this rate.<BR></BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite">Bruce</BLOCKQUOTE>
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<BLOCKQUOTE cite="" type="cite"><BR>Message: 7<BR>Date: Tue, 11 Apr 2006 07:54:52 -0400<BR>From: "The Curries" <the.curries@verizon.net><BR>Subject: Re: [RP TownTalk] Land Value Tax<BR>To: <TownTalk@riverdale-park.org><BR>Message-ID: <0IXK002P23RTKQ66@vms042.mailsrvcs.net><BR>Content-Type: text/plain; charset=us-ascii<BR><BR>As it happens, before he was mayor, Hyattsville's Bill Gardiner did a study<BR>for his master's degree in urban planning of how LVT would impact economic<BR>development in Hyattsville. He found that it would have a positive impact,<BR>but it would be slight because the municipal share of property tax is so<BR>small. Unless the other governments that make up the largest part of the<BR>levy (County, State) went the same way, you can't change the dynamic much<BR>with a municipal LVT. <BR><BR>Hyattsville, by the way, was the first municipality in the country to enact<BR>the LVT -- more than 100 years ago. Commissioner Jackson Ralston was a<BR>disciple of visionary economist Henry George, who pioneered the concept of<BR>land-value taxation. Unfortunately for him and his cohort on the town<BR>council, an opposing group sued the City and won in state court a year<BR>later. At that time, Md. state law didn't provide for municipalities to<BR>adopt LVT (it now does). To add insult to injury, Ralston and his group<BR>were voted out of office and replaced with the opposing faction in the next<BR>election.<BR><BR>That history might explain why Hyattsville (and perhaps Riverdale Park?)<BR>haven't tried to enact LVT even when there is some evidence it would have a<BR>marginal positive impact on local development of commercial property.<BR><BR>Chris Currie</BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite">Hyattsville City Councilmember</BLOCKQUOTE>
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<BLOCKQUOTE cite="" type="cite">Message: 8<BR>Date: Tue, 11 Apr 2006 08:08:31 -0400<BR>From: "CHRISTINA DAVIS" <book-smart@verizon.net><BR>Subject: Re: [RP TownTalk] m-utc report from this week<BR>To: <bruce.wernek@mindspring.com>,<X-TAB> </X-TAB>"'David Hiles'"<BR><X-TAB></X-TAB><hilesd@mindspring.com>,<X-TAB> </X-TAB><TownTalk@riverdale-park.org><BR>Message-ID: <000c01c65d60$a714f550$020aa8c0@naw.org><BR>Content-Type: text/plain; charset=us-ascii<BR><BR>Hello Bruce, David, and others:<BR><BR>Actually, most of the residential property owners would see a tax decrease<BR>(Jack has the tax rolls run periodically to show this by individual<BR>address). No town council has ever voted against this. I thought it was a<BR>bad idea until we had the historic districts in place. Once that happened, I<BR>tried to bring it up on several occasions. However, most people did not want<BR>to be the first in the state to try something new. . .<BR></BLOCKQUOTE>
<BLOCKQUOTE cite="" type="cite">Chris Davis<BR></BLOCKQUOTE>
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