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Wednesday, January 26, 2011

The Insanity of Camden

I'm taking a scene out of the old movie Network - I'm mad as hell, and I'm not going to take it anymore!!! The city of Camden topped itself tonight. Just when you think it couldn't be done, the city takes an even more ridiculous action than laying off half of the police force and a third of the fire department.

Yes, the City of Camden has asked for a 23% increase in property taxes, effective May 1. This request requires state approval because Governor Christie this year managed to get a statewide 2% annual cap installed. So Camden needs a 21% exception to the new rule. The increase would cover the $26million budget gap this year. But what about next year? This is an unsustainable solution.

  • The average housing value in Camden is $26,000. Yes, that is $26,000.
  • The average property tax currently paid on that house is $1700. Yes, that is correct, $1700.
  • The city turned the library system over to the county this year to save money - and now residents will be taxed by the county library system.
  • The county has re-valued property this year. And apparently in Camden this does not take into account the terrible market - with terrible schools, half of a police force, and high crime rates.
  • This tax increase will not be applied to currently abated properties that may pay a PILOT. That includes the defense contractor L3 which has a large campus in downtown Camden, the Port Authority, the Aquarium, and the Susquehanna Music Center. Add to that all tax exempt property such as Rutgers, federal buildings, county jail, waterfront baseball park, Camden Community College and you have a huge revenue problem.
The city council members that voted for this 23% tax increase actually stated, there is nothing else we can do. We have to get off of state aid and so we have to raise revenues.

First of all, there are other options besides property taxes to raise revenue for city government.

  • payroll tax would be one option - taxing all the employees that use Camden every day and work for entities that pay no taxes
  • increase fees and sales tax - though this may only shift the burden to Camden residents through other means.
  • cut salaries and services - starting with the Mayor and City Council. Issue snow shovels and end plowing. Go to once a week trash pick up year round and privatize it.
These options are about as popular as a draconian tax increase, but will not kill homeownership and affordable housing in Camden.

I'm a renter and expect to see the tax increase and property re-evaluation in increased rent. I have a very astute landlord who will weigh the market costs and demand before passing this on. Other landlords are not as concerned and will pass it along in full. Renters who can't afford this will look elsewhere for affordable housing or won't pay and evictions will rise. Landlords will begin walking away from properties in larger numbers, leaving the city with even more abandoned housing. Homeowners will fall into arrears and face tax liens and foreclosure.

Perhaps this is the goal - put as much property in Camden into bankruptcy and delinquency as possible and shed the city of most of its current residents. Then the city could start over again and build a property tax base.

Of course, the most realistic and positive way to get out from under the fiscal collapse of this city is to generate economic development. It would not be easy, but could be done. Imagine...the city stops all other activity except for building the economy. Put the mayor and her MBA to work. It would probably raise more money and be more sustainable in the long run than a 23% property tax increase.

3 comments:

Colleen McGann said...

Perhaps they can turn the lights off on the wreath on City Hall to save a couple bucks... and the city hall tower for that matter. I don't think it should be illuminated until I can see a "city invincible" with my own two eyes.

Seriously though... I think a city wage tax would be a great idea to generate revenue. I pay it in Philadelphia but fear the few businesses in Camden (although not paying taxes themselves) would suffer and leave as a result. Perhaps they might also wonder (as I do) where their tax dollars are going...

Colleen McGann said...

I meant: "They" being employees paying a city wage tax might wonder where their taxes are going much like I wonder where my property tax and association fees are going since I am getting no benefit I can see from either...

Danial123 said...

I wonder where my property tax and association fees are going since I am getting no benefit I can see from either...
Rental Dumpster