Freeze has never been good tax policy

The Ledger-Enquirer has editorially opposed the local property tax assessment freeze for most if not all of the 30-plus years it has been in effect. There’s no point in transparent coyness now, despite a new proposal for sunsetting the tax structure, countered by new — and granted, persuasive — arguments for preserving it.

Our basic objections to the freeze are the same as they have always been, and predate by many years the current campaign to phase it out. We believe it to be a fundamentally unfair system, taxing citizens at absurdly different levels for properties of almost identical value, based solely on the length of time the owners have occupied them.

That inequity is manifested not just at tax time, but in the cost of every city service provided Columbus residents, some of whom pay many times the amount of ad valorem tax as fellow citizens in comparable, or far higher, living and income circumstances.

It also, not incidentally, costs the city millions in revenue to fund those very services.

It is a disincentive to major home improvement. Significant additions to homes are taxed at current rates, not “frozen” ones. Needless to say, that’s also a disincentive for buying or building here, for all the attractions and amenities of this fine city.

The most disingenuous defense of the freeze, at least in the past, has been the threat of the elderly and people on fixed income being “taxed out of their homes.” On the contrary, the freeze is more likely to keep elderly homeowners and middle-aged empty nesters from moving to smaller, otherwise more affordable homes because they would be burdened with twice as much tax (or more) for half as much house (or less).

The “thaw” proposal on the November ballot calls for eliminating the freeze as of January 1, 2017, but keeping it in place for every property owner under its protection. Only when the owners die or sell would their property come under fair market tax rates. Nobody covered by the freeze would lose it.

One of the prevailing arguments against a “Yes” vote to phase out the freeze is the prediction that if and when such a vote repeals the freeze, the formula replacing it would be vulnerable to legal challenge on the grounds that it is an unconstitutional two-tiered tax system. If that challenge is effective, this line of reasoning goes, Columbus property owners are left with no protection at all.

That’s an effective argument but, in our view, an unconvincing one. (We’re not lawyers, but we’ve heard from lawyers on both sides of this debate, so for our purposes that’s a wash.)

It should be noted that the freeze, as it has existed since its inception, already operates on so many “tiers” for so many different taxpayers that it is almost literally impossible to tally its inequities.

And, as its defenders rightly point out whenever it is questioned or opposed, it has withstood legal challenge. Taxing people at different rates based on when they bought their homes — which the freeze already does, and the “thaw” would do — violates no constitutional principle.

It should also be noted that among supporters of the plan to phase out the freeze are many protected by it now. Unless all of those people are wealthy enough to absorb an instantly multiplied tax bill (and we’re pretty sure most of them are not), then they are putting their money, literally, on the thaw’s legal integrity.

We have never opposed some form of tax protection for property owners against arbitrary assessment creep (or, worse, spike). Gentrification, development and other factors beyond homeowners’ control should never threaten their continued ability to afford what they have worked for and earned.

But there are better, fairer and less costly ways than this. We recommend a Yes vote to thaw the freeze on Nov. 8.

This story was originally published October 11, 2016 at 5:12 PM with the headline "Freeze has never been good tax policy."