Cari Hermacinski: A spending problem

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I find it ironic that some members of our community call for a property tax most loudly during a time of economic struggle. In my view, our local municipal government does not have a revenue problem; it has a historic overspending problem. We have an unfortunate history of spending more than we collect, even when revenue collections far exceed projections. While it is true that monies collected from taxpayers should be reinvested back into the community to benefit taxpayers, responsible government leaders should be saving some of the excess revenue during economic ups so that core services are not jeopardized during inevitable economic downs.

If this community wants to evaluate its taxing structure to determine if there are options, or a combination of options, that are less regressive or more diversified, I will be part of that effort, but looking for a source of revenue that is "stable" during all types of economic crises is a fruitless effort. All financial systems and the methods of taxation tied to those financial systems are subject to highs and lows and should be expected. "Stability" is a myth. It is responsible spending, during good times and bad, and saving for the proverbial rainy day that will give us a stable and reliable government in the long term.

Local government's response to a decrease in revenue should not be to attempt to extract more money from its community. We should expect that our local government leaders remember the lessons of recession and when recovery occurs have the foresight to prepare for the next financial downturn. I am confident that if city leaders maintain a long-term focus on core services and do not revert to historic overspending, we will have a city government with the ability to provide services in economic ups and downs without resorting to crisis modes of operation.

Cari Hermacinski

Steamboat Springs City Council President Pro-tem

Comments

Russell Orms 5 years, 8 months ago

I'm so glad I voted for you. Keep your head while others around you ......

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honestabe 5 years, 8 months ago

Cari, great article on what not to do. how about another article about what to do, a few more specifics possibly. Its quite simple, what and where do you want to make spending cuts? Historic preservations positions, plow drivers, iron horse $, city council salary? where? please do tell. Where has the overspending been occuring? please, some specifics would go a long way to making your ideas a reality.

or are you just passing the buck backwards, to the previous councils that didnt save enough?

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Scott Berry 5 years, 8 months ago

honestabbe, what a back-handed slap in the face! If you have been at any of the numerous budget meetings, you would know there is a priority list set up by the staff of each department and orderly cuts are to be made in a reverse order of importance. Obviously, snow removal is more important that adult basketball. Unfortunately, the new manager felt it was easier to cut hours worked by 10% than to make cuts. So, the city keeps the freeloaders and discourages the really good employees. It is a perfect example of the insidious nature of government as a whole: it cannot cut back.

Thankfully, Cari is expressing a frustration the majority feels; "that government needs to live by the same rules private enterprise necessarily employs to survive". Townie and his cronies believe more money is always the answer, especially when it is someone else who is providing the money. As a country, we have become socialists in short order and shall be paying a big price. Perhaps, we can at least be responsible on a local level and spend frugally for essential services.

Thank you Cari and all the council who supports thrift!

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seeuski 5 years, 8 months ago

Fantastic article Cari. honestlyabbe, how about the article about the $400k overrun in the remodel of the old courthouse? Why did we need such a bold library? Or a big city style expensive new courthouse? This town needs to operate like the small town it is and not look towards the new style of Obama tax and spend mentality. Pennies from heaven. Stop taxing away our future. Don't rip off so called 2nd homeowners.

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JustSomeJoe 5 years, 8 months ago

seeuski - "rip off 2nd homeowners"? How would an additional tax on property rip off someone with a second home? Take a look around at all the empty second homes, a lot of them with for sale signs on them. The second home owners and easy credit helped drive the price of land and building up over the past 20 years, and now we are experiencing the down side of that run up.

If a second home owner comes to town around two weeks a year, do you think they are contributing enough to the public safety officers that protect their homes, the firemen ready around the clock to respond to fires, the trucks that plow their streets? The argument for an additional property tax is so that all home owners, primary or secondary, pay for the services that serve and protect our homes and families. The question is if we add additional mils for to property tax for services and infrastructure will we offset the sales tax?

I suspect you probably have a pavlovian response to the word "tax", as your last two sentences come straight out of nowhere.

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Duke_bets 5 years, 8 months ago

seeuski - Keep crying about Obama being president.....And, continue to ignore the last 8 years. Why do you think taxes will be raised? Anything to do with the the economy going completely in the toilet during the Bush years? Nothing to do with brokers and hedgers banking on appreciation I suppose. And, you mentioned 2 week second homeowners. You want a tax cut because you only live in it for a couple of weeks a year? And, you have a mortgage on the second home? Most second homeowners don't have mortgages on the 2nd and they sure were not any part of Fannie/Freddie. Give it up and have fun paying taxes.

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seeuski 5 years, 8 months ago

justsome, Your philosophy of treating some differently than others based on an imaginary 2 week a year homeowner is preposterous. Lets just continue to remodel and rebuild and spend, spend, spend our way back to economic health right? The answer is to cut the spending on these big projects and not penalize imaginary big bad 2nd homeowners. I just happen to think that Cari has it exactly right on this one. Now you want to blame the second homeowners for the failures of Congress and their pet project Fannie/Freddie for the Worlds economic woes. Give it a break. You seem to live here in the Boat, do you own a home or rent from someone who does and did you come here in the last 20 years? Please spare us from this socialist mentality that is permeating the air around this Country lately. How about a nice little tea party?

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seeuski 5 years, 8 months ago

Oh yea, Obama is going to eliminate much of the interest deductions on mortgages and donations along with other tax hikes. Lets just make it impossible for anyone to make ends meet and watch this town die of loneliness and our local businesses go under because no one can spend in their shops and restaraunts etc. You should look at historical facts about what happens to the economy when people are burdoned with outlandish taxes. I still remember the Carter years. We are already in that territory. Yea, I have been conditioned by events since the election of the Taxer in Chief.

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JLM 5 years, 8 months ago

Damn good article and sentiment from an elected official. A pretty rare thing these days.

Of course, government must control spending when the economy is contracting. Government must be able to manage its finances for both good and bad times.

A wise financier does not seek more funding from a contracting source of funds.

America is taxed enough.

Don't worry too much about Obama's crazy plans. His honeymoon is just about over and America is getting ready to wake up to a huge headache. If it were not disrespectful to say that our President was an a$$clown --- with his latest bowing incident and subsequent denial --- I might say it. But I do not want to disrespect him by calling him an a$$clown.

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JustSomeJoe 5 years, 8 months ago

Fox News much? Put down that pipe bro, the paranoia has taken over. Then again, they might really be after you.

For your information, property taxes are used all over the country, in addition to sales tax, to fund infrastructure and services. Why should Steamboat be different? I was just replying to your concept of a property tax that rips off second home owners, your words, preposterous by the way. Property taxes are fact of life, already here. If our core services can't be paid by a sales tax then it's probably time to look at normalizing the funding for infrastructure and services.

You didn't comment on my proposal to offset sales tax if we are going to add a property tax to fund infrastructure. Instead you jumped on your tired rant and started attacking me with assumptions, putting words in my mouth (I blamed second home owners for the failures of Congress? Where did that come from?) and jumped right into Obama.

Tea Party, that's a joke. I'm assuming you are fomenting some sort of revolution in our democratic society. Over 200 years of peaceful government transitions and all of a sudden you think you are John Adams. Why don't you head over to your teabagging party, right after you stock up on a lifetime of ammunition?

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JLM 5 years, 8 months ago

Most Americans have no idea how much they really pay in taxes --- income, payroll, sales, property, fees, etc. If you added up your entire personal tax burden it would be in excess of 50% of all your income. Surely that is not the appropriate level of taxation?

We really do not need any more taxes. We need government to be better stewards of the existing taxes. We need government spending to be sleek, focused and minimalized.

The biggest problem is that government cannot define and live within the definition of "core" services. The Iron Horse fiasco is not a core function of government but it was funded by tax revenue nonetheless.

We need government to collect the actual taxes owed --- well, apparently except for Democratic Presidential appointees, that is! LOL

In the recent UBS investigation, the IRS has discovered over 52,000 UBS accounts held in Switzerland by US citizens which are intended to avoid American taxes. UBS has defied continuous calls for the names of these American tax evaders. The UBS bank charter should be terminated until this mess is cleared up.

In fact, there will be another American Revolution driven by taxes as the first one was. It will occur at the ballot box rather than at the point of a bayonet. But rest assured the tax revolution in America has already begun.

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seeuski 5 years, 8 months ago

Fox news reports the NEWS at least and now Obama is a liar about his bending at the waist to a Muslim King. You leftys attacked Bush endlessly about his friendliness towards this same group, but Bush NEVER bent down in front of the King.

justsomejoe said: "You didn't comment on my proposal to offset sales tax if we are going to add a property tax to fund infrastructure. Instead you jumped on your tired rant and started attacking me with assumptions, putting words in my mouth (I blamed second home owners for the failures of Congress? Where did that come from?) and jumped right into Obama." From your previous post: "seeuski - "rip off 2nd homeowners"? How would an additional tax on property rip off someone with a second home? Take a look around at all the empty second homes, a lot of them with for sale signs on them. The second home owners and easy credit helped drive the price of land and building up over the past 20 years, and now we are experiencing the down side of that run up."

Maybe its just me, but you seem to be pointing your finger at 2nd homeowners and including them in the blame for this housing mess. I am saying the facts are plain to see.The ACORN/Obama style of community organization that caused the creation of easy lending programs backed and insured by Fannie/Freddie and defended by the Dems in Congress which targeted poorer inner city folk for new homeownership is where the roots of this evil resides. You seem to suggest that taxing more will ease our troubles and you don't even mention overspending.

You fail to see the wall of water building in the form of grassroots anger over what Obama is doing to our Constitution and free Capitalist Democratic style of Government. Your one term wonder Obama will be defeated in 3 1/2 years but the question is how much damage will he do to the USA and what will it take to recover from it?

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JustSomeJoe 5 years, 8 months ago

Seeuski - there's no point in a discussion with you, is there? You already know the facts. The credit bubble wasn't caused by Acorn/Obama community organizing. I don't even know what the hell you are ranting about. Take a look at where the major foreclosure centers are, it's not inner cities. It's suburbia, with overbuilding speculators. Fannie/Freddie programs funded through CRA have much lower foreclosure rates compared to the warehouse mortgage efforts of Wall Street issued through now defunct mortgage brokers. The GSE's weren't backing that dreck. Plenty of America took out loans they can't repay. I'll never be able to get past your existing predjudices.

I love how you are throwing the constitution out there in regards to Obama. Name an amendment that Obama has crossed. I can name quite a few amendments our last president suspended in the name of "freedom". That's not freedom, it was tyranny and power that corrupted.

What the heck is a "Free Capitalist Democratic style of Governement" and what is the current administration doing to change that? Changing the top marginal tax rate from 35% to 38%? Oh no.... The past 16 years of tax cuts and spending/borrowing have put our country in a hole that most rational people believe more tax cuts will not solve. At least Clinton left Bush with a budget surplus. Heck, even Saint Reagan raised taxes when it was clear the we were spending more than we were making. Next you are going to try to tell me that we have a free market here in America and Obama is going to kill that.

We have already had our revolution boys. It's here, get used to it. Your grassroots anger isn't playing out all over the country. The vast majority of americans approve of our president and what he's doing for the economy. (go ahead, look at data rather than make it up: http://www.pollster.com/ )

Keep talking up your tea party and what that represents. You are following the fringe, and that's where you are. Isn't it time you took your tired rant to a retirement community in Florida or Arizona at this point, or maybe a compound in Western Idaho?

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Scott Wedel 5 years, 8 months ago

The choice for local taxes is between: 1) Sales tax in which tourists pay $1.50 per $1 paid by locals, but the local's portion of the tax as a percentage of income falls more heavily upon those with lower incomes 2) Property tax which locals probably pay at least $1.50 per $1 paid by second home owners, but it is more fairly distributed according to income.

The expected result of sales tax is a larger local government with lots of amenities such as parks and rec because the taxes has a relatively minimal impact upon locals.

The expected result of a property tax would be the smallest government possible because the tax not only directly affects locals, it also affects the portion of the population that has the highest voter turnout.

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ybul 5 years, 8 months ago

In the long term it is probably best to have a hybrid tax. One that is a property tax for essential services, snow plowing, fire and police and then a lodging tax to help fund the tourist attractions.

Maybe the government could figure out what it needs to do and find out the most cost effective way to do that. Architectural/structural engineers being paid a fee to do building inspections to code. This way if there is an increase/decrease in need the government does not need to ramp up/down for that position. Housing, could the funds that were used to pay salaries/purchase iron horse been more wisely used to buy land to build an apartment complex, or was this just an expansion of someone's fifedom?

Too many questions... Can we provide the same levels of service for less money by thinking outside the box, and looking towards fostering partnerships with private parties, the community foundation or ??? to provide services desired by the general public (ie. the city subsidizing a lot for a fund within the community foundation to build low cost apartments, this way the community foundations investment is not only providing a real return it is building community).

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Scott Berry 5 years, 8 months ago

Scott, I don't understand your assumption that a property tax would result in a smaller government? Please show me one example of providing more money more consistently and the result is a smaller government!

And to Duke_Bets and JustSomeJoe, Bush conceded to the Democrats and left Obama with the biggest deficit in history! Obama has managed to triple that number in less than one hundred days. As it stands today, each and every person in this country is burdened with a share of the national debt equal to $130,000.00! And, when only about 40% of all Americans pay taxes of any amount, the number is outrageous.

On a local level, Cari Hermasinski is simply standing up for those of us who believe the purpose of government is to provide essential services only. The sales tax does that very easily. Unfortunately, it is the entitlement issues which get the city in trouble. Is it really the function of our city to provide day care for non-working mothers who want to go exercise at their private clubs, or fund an adult basketball league, or provide free concerts, or subsidize the very successful "Strings"?

In short, we locals are sick and tired of the imports justifying their desires of governance and life style by citing examples of such in other cities or counties; probably from their previous homes. Please, if you want taxes to be like they are in the East, New England, California, or Texas, please call Mayflower and make an appointment for them to come get your belongings and go home!

For those of us who do pay income taxes, we are about to get nailed on a national level, so we don't need more unneeded taxes on a local level.

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Matthew Stoddard 5 years, 8 months ago

Ybul- "locals" vs "imports"?? How long have you lived here and can you prove it to us all? Plus, I've been local long enough to remember when Steamboat still had it's own property tax.

On what Cari said it being about, "We have an unfortunate history of spending more than we collect, even when revenue collections far exceed projections,"...maybe that's why we keep calling for a property tax to save our funds- because we DO have a history of spending more than we collect. At least this way, the essentials are covered.

Plus, it's about redistribution of taxes...not additional taxes.

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ybul 5 years, 8 months ago

Matthew - I do not think I mentioned locals vs imports, I do not think I disagree with the concept of a property tax. Though I do disagree with big government.

As far as how long I have lived here not very. I can prove it. However, I am not retired and trying to eek out a living doing what I do.

I think I agree that the essential service be funded by property tax. I believe it is the most fair way of taxing for those service in this community. Though I think that there are some problems when it comes to commercial space.

I also think that many services could be provided by the private sector a heck of a lot more efficiently than the government does though. Look to New Zealands transformation in the early nineties. They determined what they wanted, less hunger and homelessness and went about achieving that the most cost effective way. They eliminated 80% of government in structuring a better society.

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Matthew Stoddard 5 years, 8 months ago

Ybul- Sorry; I was referencing "Commoncents" and accidently shot up too far on my scroll bar to check the name spelling. My sincere apologies.

I agree- the Gallagher Amendment is a bit lopsided, but the "business" will usually collect more money revenue to pay for taxes than an "individual." Still, it's lopsided either way you look at it. Should you even out the individual vs business tax split, you put more burden on the individual. Most individuals do not make as much as a business, per se. And an individual can't raise prices for anything whereas a business can pass a smaller mark-up on an item to pass that expense onto the individual...which is what usually happens.

So that one post of mine from before is now corrected thru this statement for Commoncents on the "locals vs imports." (I just love givin' crap to anonymous people who try to say they are local but can't prove it. LOL!)

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Steve Lewis 5 years, 8 months ago

True or False: A government living on sales taxes will take different steps and choices than a government living on property taxes.

That original point was the most intriguing and useful. I didn't think anyone in this discussion sought more $$ for government. Towny's letter sought a "smarter" government, which to him meant, not chasing future sales taxes.

I agree with Cari that government should be responsible to its taxpayers by living within a tight fiscal policy. I'll have a hard time supporting a move to property taxes because of the Gallagher 4x penalty to commercial property. But also I have to acknowledge that government investments, such as in broadband internet, are the backbone of my commercial investment.

It's a good conversation in those posts that consider the two roads, sales vs. property, and how some middle ground may be useful. I have to wonder would a Steamboat based on property tax have been equally motivated to invest in that broadband? Maybe. Would they have supported the LMD lodging tax for airline flights? Maybe not.

Perhaps, in Cari's view, a fiscally tight government will make the right choices regardless of its revenue source. Towny argues those choices are a function of the revenue source. If Towny is right, is property tax a healthier premise to work into our future? That's the question that's most interesting.

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seeuski 5 years, 8 months ago

In response to justsomejoe and his continual falsehoods about how we have arrived at the Worlds current economic meltdown and why we even need to consider continued tax hikes in this country. Video proof of the 2004 Congressional hearings on GSE regulations being pushed by Bush and the Republicans and the Democrats denogration and even subtle racial overtones regarding the supposed public lynching of Franklyn Raines(Fannie ceo). Notice Clinton at the end admitting he warned these Dems of the dangers of lax regualtions!

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Who was bought off by the GSE's? The new POTUS.

http://www.youtube.com/watch?v=usvG-s_Ssb0

What we need are leaders who get it like Cari. Stop spending our money on stuff!!!

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Scott Wedel 5 years, 8 months ago

I think if a property tax were to be approved that the approval process wold also include a reduction in the local sales tax. That it would have to be presented as revenue neutral to get approved.

I think the sales tax revenue has a certain "free money" aspect to it because so much of it is paid by tourists and it is hard to know how much anyone is paying And so why not spend money on whatever as long as the money is coming in.

I think a property tax would have a far greater "you are taking and spending my money" aspect to it, far more of it would be paid by locals and not only does each person know how much they are paying, there is a record of it. So I think if there were years of plenty of revenue then there would be a far greater local push to refund and reduce property taxes.

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ybul 5 years, 8 months ago

Mathew,

 If you knew me personally, you would realize I am only slightly anonymous.

  The Gallagher Amendment coupled with Bill Ritters bright idea that once property taxes go up they can not come down, will hurt this town more than others.  Personally tourism is going to take a hit for some time to come, the retirement boom also will fade, and location neutral business may decide that the additional costs from higher commercial property taxes here are enough of a disadvantage that they choose to locate elsewhere.

   You are right about an individual not making as much as a business, in most cases.  This town has a glut of commercial real estate in my opinion.  This probably can not be supported simply through tourism or local business and fill the space with business that reach out of the area for sales will need to occur.  This will require a lower cost structure than we have today in this town and the commercial real estate valuations being sky high here with the recent run up in prices and that has increased the tax burden for those business'.  This factor might have caused some local business' to shut their doors.  Who knows..
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Scott Berry 5 years, 8 months ago

Mathew, for the record I am a third generation local; a land owner, a business owner, and very involved. Thank you

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