What about Taxes–“Rollback” or “Rollforward”?
July 21, 2010 Leave a comment
Local governments–Miami-Dade County and Coral Gables–are getting ready to raise taxes and fees. There is no evidence so far that taxpayers are ready to resist these increases, although we are still early in the budget cycle.
Both cities are settling on the so-called “rollback” rate.
This term, rollback, is a misnomer in times of economic and real estate distress. When property tax values are rising rapidly the rollback rate is a lower rate to keep tax income constant for the city.
But in times of declining real estate values the rollback rate is a “roll-forward” rate because your taxes will be higher to keep the tax revenues constant for the bureaucracy.
Hence your taxes rates will now rise to keep the bureaucracy going even though there is no inflation, but there are rising public security union contracts, spending on stadiums and other infrastructure and an abundance of employees and a reluctance of government to reduce expenditures, even though higher taxes will hurt a lot of people.