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Free Lunches for Renters
With the proposed increase in property taxes for this year, I thought I would revisit the claim that renters are affected by property tax increases just like property owners. Now we all know that your landlord does not assign a number to property taxes in your rent. Property taxes are an element of the costs that presumable the property owners pass on. I tried to find a simple reference that would specifically document tax increases contained in rent here in Lawrence. I could find none; therefore, I had to back into the relationship.
I researched the average increase in rents for a two-bedroom apartment in Lawrence since 2002. Believe it or not, one source puts that increase at about 13%. The Bureau of Labor Statistics reports that the CPI-U has increased by about 18% in that period. My calculated property tax increase is about 40% during that period.
When one considers that there are expenses that property owners have to meet and that those expenses likely increase proportional to inflation then an inflation rate of 18% suggests that the property owner has not passed on all the increases in costs that they have experienced given that rents have only increase by 13%.
Now property taxes are not part of the CPI-U baseline so tax increases are not in that calculation or in the costs represented by it. So it would appear that for any portion of the property tax increases to have been passed on the other costs to the property owner would have had to increase at considerably below inflation. Since this is unlikely, it would therefore appear that little if any of the property tax increase hereabouts has been passed on. I am not arguing that it is zero but it certainly is not the full 40% increase levied on the owner occupied homes.
Let me hear it again. Renters experience tax increases just like property owners so the game is not rigged and the majority of the citizens of Lawrence (renters) do not get a free ride when new amenities are provided through property taxes. Right! It would appear that about 40% or our citizens pay for all the “goodies” purchased with property taxes. Talk about taxation without representation!
Sounds just like Merrill who keeps arguing that property owners do not pay for the civic services they receive. He has never responded to my queries as to a source for that assertion but given the above data it must be the biggest bunch of “hooey” every published in Lawrence.
It is time for our “law givers” to levy a renters tax linked to property taxes and increases thereto. I am not seeking to punish anyone or to raise revenue but to insure that renters experience the full effect of their demands for civic services. No more “free lunches”.
Let us debate all you “free lunchers”.