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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2011 > January > 24
Monday, January 24, 2011
Guest column: Means-testing better applied to other tax breaks
This commentary was written by Karl Keith, a Democrat, who is the Montgomery County auditor.
It was the “Summer of Love.” That’s how we refer to the summer of 2007 in the Montgomery County auditor’s office.
Some 30,000 property owners in Montgomery County were enrolled in the Homestead Exemption Program that summer when eligibility was extended to any homeowner age 65 or older, regardless of income.
Today, more than 45,000 Montgomery County homeowners benefit from this tax break, reducing their annual property tax bills by an average of $560.
Despite its immense popularity, the expansion of this program has critics. Indeed, some believe the program should be trimmed back or eliminated entirely as part of “redesigning” state government and tackling the state’s budget crisis.
However, the arguments in support of this position are, for the most part, misleading and misplaced.
The advocates for cutting back the Homestead Exemption Program propose doing so through some sort of means testing. They contend that this break should only be provided to homeowners based upon their ability to pay, giving the impression that wealthy homeowners now benefit.
An analysis of the recipients gives a considerably different impression.
If property value is any indication of a taxpayer’s ability to pay, then the overwhelming majority of homeowners on the Homestead Exemption Program in Montgomery County appear to be of low to moderate means.
More than 75 percent of the current recipients own homes valued at $150,000 or less. Approximately 65 percent own homes valued at $125,000 or less.
Additionally, more than 4,200 recipients — almost 10 percent of those enrolled in the program in Montgomery County — are permanently and totally disabled. And fewer than 10 percent own homes valued at more than $200,000.
The recipients of the Homestead Exemption are predominately senior citizens of moderate means, living on fixed incomes, many drawing Social Security benefits (with no cost-of-living increase for the past two years), and in all likelihood struggling to maintain their quality of life. They simply cannot afford a huge jump in their annual property tax bills.
Furthermore, the manner in which this tax break is calculated and applied already has an “ability to pay” mechanism built in.
The amount of the annual tax reduction is determined by exempting from taxation the first $25,000 of the homeowner’s property value. This works to apply a cap on the amount of the credit, reducing the tax burden for those with lower property values by a higher percentage than those with higher values.
For example, the owner of a $65,000 home in Kettering receives an annual reduction in his property tax bill of $580. That amount represents a 37-percent reduction in that homeowner’s total bill.
The owner of a $350,000 home receives the same $580 credit, which amounts to only a 7-percent reduction in his bill. The cap provides a progressive feature to the program.
When the legislature voted for a phased-in, across-the-board state income tax cut by 21 percent in 2005, where were the advocates for means testing when that tax break was being considered?
Now there is talk of eventually getting rid of Ohio’s income tax altogether, and legislation has been introduced to eliminate the estate tax. The ability-to-pay principle would be better applied to deliberations about these tax-reduction proposals than the Homestead Exemption.
The summer of 2007 may have seemed like the “Summer of Love” for many Ohioans, but if the Homestead Exemption is slashed in the next state budget — forcing senior and disabled homeowners to shoulder more of the local tax burden — this year will likely be remembered as the “Summer of Discontent.”
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Editorial: Does Kasich really not think about race, etc.?
In confronting the point that his cabinet is all white — with 20-plus members — Gov. John Kasich said he just doesn’t think in those terms. “I don’t look at things from the standpoint of any of these sort of metrics that people tend to focus on, race or age, or any of those things,” he said.
If that’s true about him, then he’s in a class by himself — even among fellow conservatives.
Typically, they freak out with joy when they find people of color they can put forward as fellow conservatives. They are eager to live down the charge that their movement is profoundly white or that it is prejudiced.
When they don’t put any forth, they obviously can’t say it’s because they searched and couldn’t find anybody who fit the ideological bill.
In going all white, Gov. Kasich does gives credence to the charge of whiteness — but not of prejudice.
The best bet, in fact, is not that the lack of diversity signifies hostility to minorities. The best bet — the gubernatorial protestations notwithstanding — is that if he had any qualified minorities at hand who were on his wavelength, he would have loved to hire them.
Not only are there no blacks; there are no Asians or Hispanics, just a Californian, which is a sort of diversity, but not exactly the sort that many agitate for.
The governor did say that he hopes his cabinet will become more diverse with time, and it probably will. But that seems to suggest that he does think about these things.
Nobody has to tell the governor that he and his party will be better off to the degree that they can manage to pull in some minority voters.
The contrary strategy — play exclusively to the white majority — requires a sour kind of politics that is not the Kasich style and that leaves no margin for error among whites, given, after all, that some of them believe in diversity.
Thinking about demographic characteristics is the American political tradition. People putting tickets together or administrations think in terms of geographic balance, religion, gender, age, ethnicity and race.
Specific characteristics wax and wane in importance, according to circumstances. But thinking about them dates back to when some categories were actively excluded.
If he were to continue to go all white, Gov. Kasich would give his detractors a rallying cry. Even if the Ohio economy improves, it will — if patterns of the recent past hold — improve less for people at the low end of the income scale than for others. Blacks are disproportionately present at the low end. Why foster the charge that he has something against blacks?
If Gov. Kasich really doesn’t think about these things, maybe he’s further gone into ideological true belief than is generally acknowledged. If all he must do to assure Ohio’s great economic progress is turn the conservative switch on, then, politically speaking, it doesn’t matter how many minorities he has. He’ll be fine.
Best, however, to diversify his strategy a little.
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Editorial: Walmart gives healthy boost to consumers
Even if you don’t shop at Walmart, in time, you likely will be eating healthier because of the company.
Last week Michelle Obama lent her star power to Walmart at the company’s announcement that it’s reducing salt, sugar and trans fats in its private label products and asking its 60,000 suppliers to do the same for theirs.
Mrs. Obama was at the event because she’s made combating childhood obesity her signature project.
If you’ve read or watched “Fast Food Nation” or “Super Size Me,” you get what this effort is all about.
Even if we avoid the snack aisle at the grocery and desserts at restaurants, most of us are still putting a lot of nasty stuff in our bodies — jeopardizing our health, depressing our energy, compromising our good looks and costing our insurance company (and employer) and the government a lot of money.
Part scholarship, part journalism, part stunt, part entertainment, the aforementioned book and movies have put disgust and fear in people who are not easily scared, who don’t love government telling them (or businesses) what to do, and who once indulged in Big Macs.
It’s not just mothers any more who are asking themselves if they’re poisoning their families with cereal at breakfast, processed meat and cheese at lunch, and hot dogs at dinner.
Walmart’s move is important because the firm is the world’s largest retailer. When it wags its finger about cows being treated with artificial growth hormones or energy-sucking incandescent light bulbs, things happen. Kraft, for instance, depends on Walmart for about 16 percent of its global sales.
Walmart executives insist they’re not acting in anticipation of government regulation (which could be coming), but simply reacting to consumer preferences.
“Our customers have always told us, ‘We don’t understand why whole-wheat macaroni and cheese costs more than regular macaroni and cheese,’ ” an executive said Thursday. “We’ve always said that we don’t think the Walmart shopper should have to choose between a product that is healthier for them and what they can afford.”
Cost is a huge problem and barrier to eating healthy. If Walmart can exert its influence — because of its market share and the power of economies of scale — that’s a contribution to consumers worldwide.
(Critics, of course, worry that the retail giant will squeeze producers, though Walmart says its plan is to offset any additional costs for better food with increased sales volume. Time will tell.)
Specifically, the company says it wants to lower sodium content by 25 percent, reduce added sugar by 10 percent in its processed goods, and phase out the process of industrially added trans-fats over five years.
Walmart is not alone in its push. ConAgra Foods, which took a beating in “Supersize Me,” has said it wants to reduce sodium content in its foods by 20 percent by 2015.
Bumble Bee Foods, General Mills, Campbell Soup, PepsiCo and Kraft are also promising healthier products. One critic of the food industry told The New York Times last week that Walmart’s move is as important in its reach as the Food and Drug Administration issuing an edict.
In time, habits will change for the better, because eating better will be easier. The history of that progress will say that an independent film maker who literally almost killed himself by subsisting on McDonald’s burgers and fries, and an investigative journalist who infiltrated frightful feedlots, had a significant role.
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