Monday, June 04, 2007

Long Island's death by taxes

Tallgrass The magnitude of it takes your breath away. Set in the context of the lot lines of surrounding properties and roadways, the Tallgrass PDD map makes your jaw drop. At least it did mine.

Three hundred seventy-eight homes, 175,000 square feet of retail space, and an 18-hole golf course set on 320 acres. High density but “smart” development, at least according to proponents who say the overall environmental and economic impacts of the 283 single-family homes the developer could build as-of-right under current zoning. A Hobsian choice.

Small wonder many Shoreham residents were clamoring for the government to buy the land for preservation, and why Shoreham Councilman Kevin McCarrick tried to maneuver a moratorium to give the preservation effort time to bear fruit.

Is preservation the right thing for Tallgrass? I’m not so sure. Public funds for preservation are scarce and must be spent according to a well-thought-out plan that prioritizes properties according to objective criteria — which, in the best of all worlds, shouldn’t include “not in my backyard.”

When it comes to development, we’ve gotten a lot wrong on Long Island. We’ve carved this place up into large lots and built big homes surrounded by a lot of lawn, kept green and pretty by high doses of fertilizer and pesticides. We’ve shunned public transportation, and made being a pedestrian a life-threatening endeavor. We’ve constructed “The American Dream” on this fragile spit of barrier beach, and we’re learning that the dream is, in some ways, more of a nightmare.

Astronomical property taxes stalk us in our nightmare. Taxes have driven businesses and people off Long Island. They’ve made it hard to hire qualified employees from other places. I speak from hard experience in this. I lost a great editor because he got fed up with his $12,000 annual property tax bill. In his new home in the Midwest, he’s got a bigger house and his property taxes are around $2,000. I lost the opportunity to hire, over the past couple of years, two great editors — one from Virginia and one from Missouri — because of Long Island’s property taxes. Both were flabbergasted by the amounts we have to shell out every month to pay property taxes around here. Their tax bills now, they told me, are under $2,000 a year, an amount that would at least triple if they came to work for me here on Long Island. As an employer, I’m struggling to be able to pay employees enough to afford to live here. And it hurts.

Taxes, taxes, taxes. They were the talk of the town at the Republican convention last week. The Republicans, who arrived at the convention in cars bearing “Hi-Tax Foley” bumper stickers, would have us believe that property taxes were invented by Brookhaven Democrats. But there isn’t a thoughtful person alive on Long Island who would buy into that oversimplified poppycock. (Advice to Brookhaven Republicans: Don’t insult the voters’ intelligence.)

Property taxes — along with electric rates — are indeed killing us. Most of the property tax burden (around two-thirds) is the tab for education. Developers, in recognition of this fact, have crafted proposals to limit impacts on our schools, and, therefore, on our tax bills. These are often ultra-high-density projects like Tallgrass, but the pitch — now a familiar refrain — is that the project won’t bring a lot of children into our schools, either because ownership is limited to the over-55 set or because the housing units contain fewer than three bedrooms. So a plan with 378 homes developed with (theoretically) child-limiting housing stock is “better” than one with fewer, bigger homes, a large retail development and a golf course.

I find this all very sad. For one thing, children are not one of the seven plagues (though as the mother of teenagers, sometimes I wonder). And housing developments that don’t “add” children to the schools are not, by definition, automatically wonderful. Senior citizen housing comes with its own burdens — ask hospital administrators and our volunteer ambulance squads about that. Besides all that, the health of our local economy depends, in large part, on young workers who need to be able to buy houses and raise families.

We need the right mix of housing; single-family homes, townhouses, condos and rental units are all an important part of the mix. Sometimes it requires biting the bullet on a gargantuan housing project, like Tallgrass or the one being planned for Yaphank. Sometimes it means tacking a TDR component onto an open space bond or transfer tax.

But we also desperately need tax relief, and it can’t come from limiting the child-bearing-age population. It must come, in part, from the frugal administration of governments at all levels, from Albany down to the local school districts. And it must come from a wholesale restructuring of how we fund public education, one that shifts the burden from property taxes to income taxes. Without such a shift, property taxes here have nowhere to go but up; let’s not allow ourselves to be fooled by shallow promises of politicians willing to cook the books to win elections. (Did somebody say “tax holiday?”)

We’re in trouble here, folks. Who has the chutzpah to admit it and the backbone to tackle the crisis head-on? That’s what we need. As County Executive Steve Levy, a scrappy Democrat and self-described fiscal conservative, told the Republican convention when he accepted their cross-endorsement last week, taxes are not a partisan issue. Quality of life is not a partisan issue. These things transcend party politics. They are the stuff of the American Dream, things that are important to all of us, regardless of which box we check off on the voter enrollment form.

“Hi-Tax Foley” may sound good to Republican campaign strategists, just as the refrain of government reform in “Crookhaven” was sweet music for Democratic operatives two years ago. But voters will be looking beyond campaign slogans to the meat-and-potatoes of candidates’ plans to control property taxes and their ability to make the tough decisions that need to be made — to deliver government services efficiently, protect the environment, preserve our quality of life and allow the next generation to pursue its dreams in the place we call home.

1 comment:

Estelle Edwards said...

The trouble is zoning restrictions helped to bring about the very situation we are complaining about right now. Everyone moved out here to get away from the city and rushed to put in all these zoning restrictions. But like most government social engineering schemes, they produced a whole string of unintended consequences. They helped to artificially drive up the cost of real estate to the extent that only developers can buy land. And what do developers put in? Retail centers or McMansions. What would have happened if the growth was allowed to naturally take its course with just smart planning? Maybe ordinary working people could still buy land to build a single family home. Now, the young people are leaving (and even I intend to move to New Hampshire someday). There will be no younger workforce to take the jobs that will be created by the aging babyboomers who need new health care services.
There comes a point when you look a little silly when, at the age of 45, one is still living with friends or renting a room. The middle class is disappearing. It will just be two very distinct groups: those in subsidized housing (Section 8, S.H.A.R.P., etc) and the high-income types: celebrities, upper management brokerage house types and the rest.
A major cause of the real estate bubble has to do with the loosening of credit the Fed has been engaged in over the years along with increasing the money supply. That caused the inflation. I noticed that people stopped talking about a house as a home, and started getting into flipping real estate. Then you had folks getting drunk on the home equity line of credit just so they could buy consumer goods like plasma tv's and SUV's. None of that spending was coming out of discretionary income or savings. People weren't saving. They thought the bubbles will go on in the stock and real estate markets. People saw the equity in their homes as 'savings' --- a bad understanding of economics. Everyone felt they could just keep rolling over or refinancing debt. 'Let the good times roll!' But we're long overdue for a crash. Eventually, the Fed is not going to be able to manipulate the economy, and the foreigners will eventually stop loaning us money. When those two things happen, watch out. Cutting taxes are good, but the politicians have to do their end of the bargain: stop spending and expanding government to subsidize all sorts of entitlements.
The average person has no understanding of basic economics or the innerworkings of a true free market. But a lot of us are about to learn....