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Saturday, June 05, 2021
Friday, June 04, 2021
Are your property taxes too low?
By Charles A. Trost, Professor of Law, Belmont University, Nashville Business Journal, Jun 4, 2021 - No one likes to pay taxes, and many people think the taxes they pay are too high. The recent controversy over the property tax rate in Metropolitan Nashville has brought the issue of property taxes into the public discussion and brought on litigation. ....
In comparison with other cities Nashville residents pay relatively low property taxes. Those who have recently moved here from high tax states like California and Illinois know this. Indeed in many instances it may have been a principle factor in their decision to move here. Of the 23 houses on the cul de sac we live on, three are occupied by recently arrived "tax refugees" from Illinois and three from California. One new neighbor, on receiving her property tax bill, asked my wife if the amount was for the month. She was relieved to learn that it was her annual tax bill.
The truth is that of the 50 states in 2019 at $3,322 Tennessee ranked second from the bottom in state and local taxes paid per capita. Alabama at $3,206 ranked last. And Tennessee is a good steward of its tax dollars. Tennessee law mandates that the General Assembly must balance the state's budget each year, and it not allowed to borrow to pay for current expenses, which means that of the 50 states, Tennessee, at $929 per capita, has the least amount of public debt per capita. ...
Rod's Comment: To read the rest of the article, follow this link.
I am not convinced that Nashville's property taxes are relatively low. Compared to California, no doubt they are, but that is not with whom I want to be compared. I could be convinced that taxes are low, but the professor provides only anicdotal evidence and simply asserts it to be so. Those who argue that our taxes are low often point out that our tax rate is low. That is true, but that is only half of the equation. Property values have skyrocketed as anyone who pays attention knows. A low rate on a home with a high value can result in higher property taxes than a high rate on a home with a low value.
The professor is correct that Tennessee is one of the lowest per capita tax states and lowest debt per capita. That is well documented and established. I want it to stay that way. Overall per capita tax burden can be low and Nashville's property taxes still be high, however. Home price appreciation has hit Nashville much harder than other cities in Tennessee.
This article is full of excellent background information explaining the purpose and background of equalization tax appraisals, Nashville's two property tax districts, the "certified" tax rate, and how property taxes are calculated.
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Tennessee Freedom Summit, July 10th
July 10, 2021 8:00 am - 5:00 pm
298 Brymer Creek Rd, McDonald, TN 37353
Get tickets now- limited seating
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Thursday, June 03, 2021
Nashville approves sales tax increase for downtown district
Visitors to downtown Nashville's business district will be paying more in sales tax, starting July 1.
The increase in the sales tax rate – to 9.75% from 9.5% – is expected to generate $2.4 million annually. The money collected from the increased rate can be spent only on specific purposes, mainly cleanliness and increased security in Nashville’s Central Business Improvement District.
“We’re looking at the resurgence of the tourist economy in downtown,” Nashville Metro Council Member Freddie O’Connell said Tuesday while presenting the tax-increase resolution before it passed.
“It has overwhelmed some of the capacity of that area. This would create a dedicated funding stream for cleanup, some social services.”
Nashville Downtown President and CEO Tom Turner said businesses in the district were in favor of the sales tax increase.
“There is widespread business and merchant support for this resolution; they’re essentially willing to tax themselves to guarantee access to resources that are necessary to successfully run a downtown business,” said Turner, whose nonprofit organization bills itself as a downtown leadership organization.
“This is essentially the equivalent of 2 cents on each $8 burger, or other similar item, sold downtown.”
The tax rate increase first had to be approved by the Tennessee Legislature and signed by the governor before Nashville’s Metro Council could pass its own resolution. Gov. Bill Lee signed Senate Bill 424 into law May 18.
“There are challenges any time you have streets that are used as much as that area of the city is. … That district may have thousands of people who are eating, drinking, entertaining themselves and spending money at those businesses,” bill sponsor Sen. Jeff Yarbro, D-Nashville, said. “It takes a toll on that area.”
The new tax money will be managed by the Nashville District Management Corporation. A six-member committee of business owners will advise the corporation board on the best uses for the money.
O’Connell said during council discussion it is unlikely the money will be able to be used for overtime for the Metro Nashville Police Department, but a large portion of the money will be used for trash services and security.
Both Yarbro and O’Connell have mentioned the Christmas Day bombing in downtown Nashville as a reason the area is in need of enhanced security.
“This became a really important issue, especially after we had the tornado pass through Nashville as well as we had the Christmas Day bombing, and we realized it was important to make sure that we keep our downtown safe and clean,” said Rep. Jason Powell, D-Nashville, who sponsored the bill in the House.
There are several exclusions to the sales tax, including professional services, lodging for transients, tickets to live events or ticketed sporting events, alcohol already subject to the liquor-by-the-drink tax, newspapers or publications and overnight or long-term parking.
“That fee will be used for two precise purposes: incentivizing those tourist events and enhancing the public safety and cleanliness of that space,” Yarbro said.
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On June 30th, the FHA forbearance period ends and the moratorium on evictions. What will happen then?
by Rod Williams - On June 30th, the FHA forbearance period ends and also the moratorium on evictions. What will happen then?
Those borrowers who are able to resume normal payments may have the arrearages deferred until the loan is paid off, which would result in these loans becoming current. The way this is often expressed is "moving the missed payments to the end of the note." What really happens is FHA mortgage insurance pays the lender the arrearage and then the borrower has a FHA lien on his house for that amount.
Borrowers who are unable to resume regular payments or for some reason choose not to may qualify for a loan modification. A situation where this may apply is if someone lost their job due to Covid 19 and now has found a new job but it pays less money and they can't afford the previous house payment. The lender may stretch the payments back out to a longer term and lower the monthly payments. One does not automatically get a loan modification. Sometimes the new income is too low to qualify for a mod, sometimes the borrower has acquired too much other debt, or other life changes may have occurred that make the borrower not eligible.
If a modification is unable to address the delinquency, the next option is to sell the home. Given the level of home appreciation across the county and especially in places like Nashville, there should be few people who are "upside-down" in their home and a preforeclosure sale will allow these borrowers to avoid foreclosure, but they do lose their home.
Borrowers who are not offered the forbearance resumption of payments option should seek the help of a HUD-approved housing counselor. A good housing counselor may be able to find a solution not readily visible to the borrower or not pursued by the lender.
Unfortunately, there will be some people who could have been making house payments, given the generous unemployment benefits and direct stimulus payments, who did not. Also, unfortunately, some of those people did things like buy cars and increase their debt obligations when they should have not. They may not be able to qualify for the resumption of the payment plan. Some people got accustomed to the level of disposable income they had when not making house payments and now do not think they can afford their house payments. They need someone to review their budget with them and help them find the money to resume making payments.
I do not expect a massive housing crisis like 2007. That crisis was caused by a relaxation of lending standards and "creative financing" that allowed people to owe more on their home than what it was worth. That is not the situation we are in now. Still, among the 169 largest MSA's 15.1% of all FHA loans are delinquent and 11.5% are considered seriously delinquent. Fortunately, none of the Tennesee MSA's are among the cities with the most delinquent FHA mortagges.
Of the largest 169 MSA's, Memphis is ranked 31st with the most delinquent FHA mortgages, Nashville is ranked 33rd, Knoxville is ranked number 91, and Chattanooga ranked 105.
Here is the list of the top ten cities with delinquent mortgages:
For more on this topic and source material see link and link.
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SURVEY: Nearly Half of Small Businesses Unable to Fill Job Openings
NFIB press release, NASHVILLE (June 3, 2021) – A record-high 48% of small business owners nationwide in May reported unfilled job openings (seasonally adjusted), according to NFIB’s monthly jobs report. May is the fourth consecutive month of record-high readings for unfilled job openings and is 26 points higher than the 48-year historical reading of 22%.
“Small business owners are struggling at record levels trying to get workers back in open positions,” said NFIB Chief Economist Bill Dunkelberg. “Owners
are offering higher wages to try to remedy the labor shortage problem.
Ultimately, higher labor costs are being passed on to customers in higher
selling prices.”
State-specific data is unavailable, but a May survey of
NFIB members in Tennessee said 85% of them had openings but an overwhelming majority of those were struggling to get people to even apply.
“These survey
results clearly show how difficult it is right now to find employees,” NFIB
State Director Jim Brown said. “We are hopeful the hiring environment in
Tennessee will improve soon because the state is ending the federal
pandemic-related unemployment compensation early, but, until that happens,
hiring will remain a challenge.”
The temporary federal benefit is set to
expire in September, but Gov. Bill Lee said it will end in Tennessee effective
July 3.
Nationwide, 61 percent of owners reported hiring or trying to hire in
May. Owners have plans to fill open positions with a seasonally-adjusted net
27% planning to create new jobs in the next three months.
A net 34% of owners
(seasonally adjusted) reported raising compensation, the highest level in the past 12 months.
A net 22% of owners plan to raise compensation in the next three months, up two points from April.
Small business owners continue to report finding qualified employees remains a problem with 93% of owners hiring or trying to hire reported few or no “qualified” applications for the positions they were trying to fill in May.
Thirty-two percent of owners reported few qualified applicants for their positions and 25% reported none.
Eight percent of owners cited labor costs as their top business problem and
26% said that labor quality was their top business problem, the top business
concern.
Forty percent of small business owners have job openings for skilled workers and 27% have openings for unskilled labor.
In the construction industry, 51% of job openings are for skilled workers. Sixty-six percent of construction businesses reported few or no qualified applicants.
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Wednesday, June 02, 2021
Citizens at the Metro public hearing on the budget expess a desire for less funding for the police and more funding for everything else.
by Rod Williams, 6/2/2021- Well, surprise, surprise! Most citizens who took part in the public hearing on the Metro budget, think Metro does not spend enough money. I did not watch last nights' public hearing on the metro budget. Metro has not posted the video of last night's meeting yet and when they do I may watch it but I have read various news reports and seen excerpts of the meeting and have a feel for how it went. Even without reading news reports of last night's meeting however, I could almost be safe in telling you what happened. I have watched Metro budget public hearings now for many years and by now I can tell you how it goes. Conservatives are nowhere to be found. No one, or almost no one, speaks out for the elimination of waste or advocates for greater government efficiency or privatization of government services. Conservatives only show up in years in which there is likely to be a big tax increase.
By contrast, liberals advocate for more spending and bigger government constantly. Advocates of higher taxes and bigger government turn out in droves. Each government function has its own advocacy group. Council members hear from Friends of the Library, Friends of the Parks, advocates for the homeless, advocates for public arts funding, advocates for sidewalks, advocates for affordable housing, and lots of advocates for more funding for public education.
In recent years, and more so this year, liberal social justice warriors speak with a loud voice. This year a coalition of liberal organizations called "Nashville People's Budget Coalition" advocated for less police funding and different priorities. They opposed a new police prescient for Antioch and any increase in police funding and instead wanted more funding for mental health programs, affordable housing, and other social programs.
Jonathan Williamson told the Council, "As a proud Black man born and raised in Nashville I do not feel comfortable with increased policing tactics and surveillance. My concern is that increasing MNPD funding would only add to the strategic oppression and armed militarization of tactics that have already decimated countless family and friends in my community."
Reverend Vahisha Hasan told the Council, "to be the most clear, the safest communities are not the ones with the most police but the ones with the most resources.”
This year for the first time ever, or at the first time that I recall, the mayor is proposing to "fully fund" the school budget. To "fully fund" the school budget means to give the School Board 100% of the funding they request. Many of the council members now serving ran on a platform to "fully fund" the school budget. In essence, they promised to give the schools a blank check.
Despite the mayor's budget proposing to "fully fund" the schools and despite that a sizeable number of council members pledging to fully fund the schools, advocates of public schools want more. They want more than the school board asked for. They want the budget to fund "social emotional learning" and other perceived needs.
To view news reports on the budget, follow these links:
News 4: Nashvillians advocate for budget priorities at Tuesday's Metro Council meeting
News Channel 5: Public weighs in on the budget.
The Tennessean: Critics assail restructured Nashville budget ahead of final council vote.
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Tuesday, June 01, 2021
Trump’s Ex-National Security Adviser Michael Flynn Calls For Myanmar-Type Coup In U.S. He is a disgusting traitor! Flynn should be court-martialed.
by Rod Williams - At a rally in Dallas yesterday, retired General and former National Security advisor Michale Flynn called for a military coup. The video is above. Please watch it. There is no other interpretation of what happened. During Q&A an audience member asked Flynn why we could not have a coup in America like they had in Myanmar and Flynn answered, "No reason, it should happen here."
This is the text:
Questioner: I want to know why what happened in Mynarmar can't happen here?
Flynn: No reason, it should happen here.
(Wild applause and cheering from the audiance)
Flynn was the featured speaker at a four-day, “For God & Country Patriot Roundup” QAnon conference in Dallas Texas. Conspiracy theorist attorney Sydney Powell, was another featured speaker.
This is not the first time Flynn has called for a military coup. In my view, Flynn should be court-martialed. I am disgusted with Flynn and Republicans who are supporting him. I always thought the threat to American democracy would come from the left, but it looks like I was wrong. The threat to our democracy is from right-wing nut jobs like General Flynn and Q-anon and assorted groups like Oath Keepers and Proud Boys. Unfortunately, it is just not the loony fringe we have to worry about but the Republicans who defend their actions and cheer them on.
Now, Flynn is trying to deny he said what he said; watch the video for yourself.
Some Republican Trumpinistas are making excuses or justifying right-wing radicalism. One tactic is to say, "Well, what about BLM and Antifa and the insurrection, arson, and murders committed by left-wing activists last summer?" That is no defense. I deplore left-wing insurrection. That is a reason to call for law and order; not a justification for a military coup.
Another tactic is to denounce the people reporting the story. This story was first reported by The Huffington Post. I admit the liberal bias of that publication but HP did not stage that video in a studio. I run into this all of the time. If I post anything from HP, CNN, Washington Post, the New York Times, or The Atlantic, I can expect a "Huffington Post?" or "Consider the source," comments. I know some liberals are equally quick to dismiss any news coming from Fox, or The Washington Times, or Business Insider, or The Wall Street Journal. I don't trust the analysis of liberal outlets but they don't just make up the news. And just because liberals dismiss news from conservative news sources, are we to be equally as closed-minded?
While HP broke this story, now many other outlets have reported it. If you don't trust HP, do a Google search and pick your news outlet.
I expect to be denounced for my position on this issue. Also, I will not be surprised if I am not informed, I am on the enemies list to be taken out when the Trumpinistas come to power. I have received similar death threats in the past and I am just this little powerless blogger typing away on my laptop. Some, not all but some, of the Trumpinistas are dangerous nuts.
My friend Mark Rogers, a long-time Republican activist posted something similar to what I have just posted regarding General Flynn and has been raked over the coals. To see the Facebook discussion generated by Mark Roger's comment, follow this link.
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The Fed’s easy credit policies are widening wealth inequality as they fuel persistent home price inflation
Rod's comment on the below article: As one who spent over 25 years working in the field of affordable housing and more years than that in other related real estate fields, I continue to have an interest in the topic of affordable housing. There was a time when people with jobs that paid a modest income could, nevertheless, expect to achieve the dream of homeownership. That dream is fading for many people. It is a shame. Last year in Nashville, the average home increased in value by $32,000.
In addition to having an interest in the topic due to my background, I have been more cognizant of what is happening in housing due to the fact that my son-in-law and daughter are shopping for a home. I am in a position to help them get into a home and will, but for young couples of modest income who do not have parents able to help them, there is simply no way that most of them can buy a house. Also, trends show that it will even be more difficult to buy a house in the future.
The answer to this problem does not lie in greater government subsidies for affordable housing. The amount that the government can appropriate to make housing more affordable will only be a drop in the bucket as to what is needed to make a difference. Also, imposing price controls or forcing developers to provide affordable housing will distort the market and may make things worse, not better.
Also, the government applying pressure to lenders to force them to make loans to people who do not meet lending criteria may lead to a new housing crisis like that of 2007. With the new government emphasis on "equity," I fear that is where we are headed. It is as if we learned nothing from what happened in 2007.
There are things locally the government can do to help, or if not help, the local government can stop policies that are making the problem worse. In an article, My advice to Mayor Cooper's newly appointed affordable housing task force, I laid out some of these. If the city would follow my advice, that might help somewhat at the local level but this problem cannot be solved only at the local level.
In this article by Edward J. Pinto of the American Enterprise Institute, he explores the destructive role of easy money policies and how that is pushing up the cost of housing.
The Fed’s easy credit policies are widening wealth inequality as they fuel persistent home price inflation
by Edward J. Pinto, June 1, 2021 - At his April 28th press conference, Chairman Powell’s statements made clear that the Fed does not understand how house price inflation differs from inflation for commodities and services. He stated that “these one-time increases in prices are likely to have only transitory effects on inflation” and added “In the near term, 12-month measures of PCE inflation are expected to move above 2 percent as the low readings from early in the pandemic fallout of the calculation and past increases in oil prices pass through to consumer energy prices.” Finally, that the Fed’s response has been “guided by our mandate to promote maximum employment and stable prices for the American people….”
These statements are hard to reconcile with the fact that home prices have been anything but stable. Since late-2020 year-over-year home price appreciation has been in the low- to mid-double digits. This boom in prices is an acceleration of a trend that began in 2012. Since then the price of constant quality lower priced homes has doubled, while the Fed’s preferred general inflation measure has increased by 16%. And, over the next 12 months, the AEI Housing Center expects the price of such homes to increase another 12-15%. For first time buyers these increases will be anything but transitory, as they form the future price base and will make homes increasingly unaffordable.
Powell went on to add: “There is no question, though, that housing prices are going up. And so we’re watching that carefully. It’s partly because there’s clearly strong demand and there’s just not a lot of supply right now. So builders are, you know, struggling to keep up with the demand, clearly. Inventories are tremendously low…. [i]f you’re an entry-level housing buyer this is a problem because it just is going to be that much harder for people to get that first house…. And, you know, my hope would be that over time housing builders can react to this demand and come up with more supply, and workers will come back to work in that industry.”
This is a simplistic view. As land economist Richard Ratcliffe observed over 70 years ago: “The essential nature of housing demand is changeability; the nature of housing supply is rigidity.” The Fed’s easy credit continues to drive housing demand higher, but has done little to boost supply. Further, home prices are sticky, unlike lumber and other commodities, which price levels rise and fall by substantial amounts regularly. Since 1993, lumber futures prices have doubled or more on 7 separate occasions. Over the trading period of May 10 – June 1 lumber futures have dropped 25%.”
For decades, the Fed has used lower interest rates to inflate asset prices, in particular those of stock and real estate, with the goal being to generate a wealth effect. But this effect largely accrues to the benefit of those households that already own stocks and bonds. The Fed’s own data confirm this. In July 1991 the Fed funds target was 5.80%. At that point, the bottom 50% of households had 4.1% percent of all household wealth. At the end of 2020, the overnight target is 0.00%-0.25% and the bottom 50% had 2.1% of all household wealth.
The Fed’s easy credit policies are creating a growing housing affordability crisis for lower-income families, who are increasingly crowded out of the home buying market and putting homeownership out of reach for millions. With accommodative monetary conditions likely remaining in place for the foreseeable future, the Fed’s policies are having a disparate impact which will lead to a slowing of gains in racial integration, a widening of wealth inequality, a further increase in socio-economic stratification, and a reduction in home ownership rates. Quite an accomplishment for an agency with a stated goal of “stable prices for the American people.”
As a society, how will we reckon with just how expensive housing has become and the resulting decline in the opportunity for homeownership? Long-time Fed chair Marriner Ecles faced a similar situation in 1947. The price of houses had “advanced by 25 to 35 per cent during the past two years. A large number of families of moderate and low income have been encouraged to assume mortgage debt which will be beyond their means…. Sellers and builders of houses have been enabled to make exorbitant profits.”
He gave this advice to Congress, which is still applicable today:
If the easy credit situation were producing a substantial additional volume of housing at supportable values in the long run, it would be justified, but because of the limitations of labor and materials it produces, instead, a dangerously inflated market which cannot be sustained for both new and old houses. I believe that by curtailment of credit for housing in closer relationship to the supply of labor and materials, the price trend would be reversed and a market for houses assured over a long period of years. Good low-cost housing cannot be built with high-cost materials and high-cost labor. Neither Government nor private industry can produce this miracle.
Housing inflation was tamed and we entered a 25-year period where new home construction kept up with demand, with the result being that real home prices declined slightly over the period. Mr. Chairman, stop spiking the monetary punchbowl. Mr. Chairman, stop buying 30-year agency MBS.
Mr. Chairman, you owe the American people nothing less.
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Sunday, May 30, 2021
Drama among Tennessee Democrats: Why the TN Democrat Party decertified the Madison County Democrat Party.
Accountability or hypocrisy: Why the TN Democratic Party decertified Madison County, what key members are saying
by Lasherica Thornton, Jackson Sun, May 18, 2021 -A meeting meant to reorganize a local branch of a major political party ended with heated accusations of malfeasance; blatant disrespect during discussions; one woman trying to attack another, leading to police charges; and lingering questions about what led to the local party’s noncompliance – the reason the branch has been decertified.
The Tennessee Democratic Party (TNDP) decertified the Madison County Democratic Party on March 25 for not complying with party bylaws and a TNDP grievance resolution to seat a man duly elected – a man former officers say used funds without authorization.
All of the officers – the chair, vice chairs, secretary and the treasurer – were put on a two-year moratorium, prohibiting them from participating in Democratic Party activities. (Read more of this lengthy interesting story that will make you proud you are not a Democrat.)
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Davidson County Republican Party 2021 Reorganization Convention Comments from the Chairman:
Good evening,
I wanted to take this opportunity to say thank you to those who volunteered to help with the reorganization event. Draftees and volunteers alike all made this what has been described as a boring event. A boring event is good at times so thank you again to all.
I also want to thank all those who have offered support and encouragement to me and to the party. We are living in a critical time in our country. Almost everything we believe in as conservatives and Republicans is being challenged by those wanting to destroy this country, to nullify our constitution, and to subvert the very foundation of our society.
I firmly believe if we work together and use our combined strengths we can take the Republican Party to all new heights here in Davidson County. Our city is counting on us let's not let them down.
Regards,
Jim Garrett, Chairman
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