PRT International has an elegant new web page. If you’re interested in how technology can be effectively applied to the problem of urban transportation, the site is worth more than one visit. This is the system that Chicago’s RTA should have evaluated instead of the Raytheon fiasco. Although its construction would provide many jobs, its operation wouldn’t need a lot of the semi-skilled labor employed by the current system.
Category: Chicagoland
Great Chicago history resource– and a new blog
Anyone interested in the history of Chicago land values (and that should be everyone around here) will enjoy getting lost in the 1916 Valuations of central business property which I just found at the Internet Archive. As a period piece it’s fascinating, but it also provides interesting comparisons to real estate prices and practices of today.
And this brings to mind that I have set up a second blog, priceofprivilege, to focus on just that– the prices being paid and asked for land ownership and other privileges. This item doesn’t go there, because it’s nowhere near current. But other items, such as taxi medallion prices and land prices around the world are going to go there rather than here. The purpose is to possibly attract an audience more interested in speculation and profit than ending poverty and economic meltdowns, but the information can still be of interest to those of us with the latter objectives.
Privatizing Federal patents
NASA has engaged a Chicago company, Ocean Tomo, to auction off “a suite of 25 patents.” This is considered to be transferring technology to the private sector. I guess an auction is better than sleazy private deals. The main point to remember is that a patent is not the right to use an invention, it is only the right to prevent others from doing so. (via slashdot)
Unbroken record on overtaxing those who use land…
…and undertaxing those who just sit on land, waiting for its value to rise.
The 2006 data are now published, and once again the Cook County Assessor has overassessed houses (and the lots they occupy) in Chicago relative to vacant land. As in the previous year, data from actual sales show that, as a percentage of sales price, assessments on houses (including land) average 50% higher than assessments on vacant land. This is the reverse of the legal requirement, under which real estate which includes houses is supposed to be assessed at a 1/3 lower percentage of value than vacant land.
This amounts to is a further penalty on homeowners (and owners of condo’s, and 2-4 flats, too), as owners of vacant land aren’t carrying their legal (let alone fair) share of the tax burden.
Is Cook County uniquely corrupt or incompetent in this regard? Other Illinois counties do not even pretend to assess residential parcels at a lower percentage of value than vacant parcels. Rather, they are obligated to assess everything at the same percentage of value. In most cases where data are reported, however, the assessment as a percentage of sales price is considerably lower for vacant parcels than for improved real estate.
Source: Data compiled by the Illinois Department of Revenue, which can be seen here (look at the “ratio” links under “property tax.”
Fairness in school funding
The Reader’s Ben Joravsky is one of many in the media making a big hoopla about how Chicago Public Schools spend a lot less per pupil than New Trier High School does ($10,049 vs. $20,811, according to Joravsky). Leaving aside the question of whether more money results in better education, some basic facts seem to be getting lost here.
(1) Comparing Chicago’s k-12 district to New Trier’s high school district isn’t meaningful. High schools always spend more than elementary schools, per pupil. I’m not going to try to explain why, tho it seems high school teachers are paid better than elementary school teachers. and maybe more specialized equipment and smaller classes are needed.
(2) Compared to most other districts, Chicago is wealthy. Since advocates say the main reason for the disparities is that some districts have a bigger tax base (more assessed value of real estate per student) than others, we’d think that Chicago’s tax base must be pretty poor. Sure, New Trier’s tax base is more than seven times as much, per student, as Chicago’s. That leaves plenty for them to share with the elementary feeder districts.
But how does Chicago compare to the 394 other K-12 districts in Illinois? Chicago’s $165,380 per student is higher than 92% of the other K-12 districts. And that’s even after allowing for the scandalous TIF extractions that have Joravsky rightfully concerned. (Check my work with the figures from here. Look on the left side under “file type” and download the xls spreadsheet.) Most of the K-12 districts have a tax base of less than $100,000/student.
(3) Disparities of local tax base can be remedied without raising income or sales taxes. If for some reason it’s necessary to increase state funding for local schools, that can be done without raising the income tax or sales tax. Wealthier districts could be required to “donate” part of their revenues to poor districts. Or the statewide real estate tax can be resurrected. Ideally, it would exclude improvements from the tax base.
Land rent is for fighting over
One problem with private collection of land rent is that people spend their energy fighting over it rather than doing anything productive. Today’s Tribune carries an example. In the 1950s, some 400 Chicagoans started an agricultural community near downstate Ullin, 350 miles away. It prospered for a while, but after the founder’s death in 1978, a schism developed.
The struggle and the lawsuits that followed, members now concede, wasn’t so much about the group’s name, but power, control and money. And there was lots of money.
Over the years, as the Israelite Bible Class had farmed less and less, the group had leased land to local, non-member farmers, a business that generated thousands of dollars of annual revenue.
Also, the farm itself, on the banks of the scenic Cache River, had considerably increased in value since the group purchased it in the mid-1950s, after forming a not-for-profit corporation in 1953.
Today the central court case over ownership, which has been appealed repeatedly, remains active, although after more than 30 years of litigation no one seems too inclined to push it any further.
The issue of rent and land value could not have arisen if the rent were not privatized.
Lava Lamps patent-free too?
A sidebar in today’s Chicago Tribune certainly implies that, like Coca-Cola, lava lamps are manufactured without patent protection, but as a trade secret. Invented in 1963, the lava lamp’s patent would long since have expired (tho lawyers seem to know ways to effectively extend such things).
btw, the manufacturer says it isn’t officially called a “lava lamp,” but rather a “Lava brand motion lamp.”
Assessor Houlihan raises marginal income tax rates
I’ve commented before on the conclusion, by several analysts, that due to means-tested assistance many people of low an moderate income can face marginal tax rates approaching or even exceeding 100%. That is, if you accept a raise, you might lose some of your food stamps, or medical assistance, or subsidized housing, or federal and/or state earned income tax credits, or other benefits “targeted” for low-income people.
Last week Cook County Assessor James M. Houlihan was kind enough to tell me about another means-tested benefit, that apparently has put some people into a marginal tax bracket of 2,000% or more. And they didn’t even know it, because tho just announced, it’s based on 2006 income.
He calls it the “Long-time Occupant Homeowner Exemption,” and it only applies to “homeowners residing in their homes 10 years or more.”
- If total household income for 2006 doesn’t exceed $75,000, the increase [in assessed valuation for the homeowner’s residence, apparently] will be limited to 7%.
- If total household income for 2006 doesn’t exceed $100,000, the increase will be limited to 10%
In both cases there is no maximum exemption amount.
Somewhere there is a longtime homeowner, whose 2006 income was, say, $100,005. That extra $5 might now cost her hundreds (or thousands?) of dollars in real estate taxes.
The impossibility of intelligent tax planning is far from the only reason this is a dumb idea, of course. The savings these longtime homeowners receive will be made up by the rest of us– including the first-time recent buyer struggling to cover an adjusting mortgage.
But I don’t mean to blame Assessor Houlihan exclusively for this nonsense. He says, and I’m sure it’s true, that it is established by the Illinois Legislature. And furthermore, he seens toi be embarrassed enough by it that it’s not on his web site at http://www.cookcountyassessor.com (or at least I couldn’t find it there). There is some mention of it at the City of Berwyn site.
Brach's site update
Back in January I noted a proposal to spend $141,000 of our tax (TIF) money per job “created,” to subsidize redevelopment of the old Brach’s candy factory site. Even more scandalous, the planned distribution center would have contained only 75 jobs on 30 acres within the densely-developed west side of Chicago.
Now comes a report that the City Council Finance Committee has delayed approval of the subsidy. Not because of the wasteful spending or small number of jobs created, but because some local people prefer that a school be built on the site. I’m not familiar enough with the area’s land use or politics to know whether this is a good site for a school, but at least somebody seems to be paying attention to the fact that land is a limited resource, and perhaps giving land and money away for a small number of jobs is a bad idea.
btw, the more recent report places the parcel size at 12 acres, not 30, which seems small to me but perhaps the area involved is less than the entire site of the former Brach’s facility.
Cab medallion prices continue to rise
Fifteen months ago, I noted that Chicago taxi medallions were selling for about $77,000. Now, per the May ’08 issue of Chicago Dispatcher, the median price increased in April (based on data thru April 22) to $125,000. That’s a 62% increase in 14 months– with no increase in fares (altho a gas surcharge which was allowed subsequently doubtless was anticipated).
Of course the medallion owners, as such, contribute nothing to the provision of transportation, but they do impose a cost on passengers and/or drivers. Limiting the number of cabs doesn’t increase the earnings of drivers.