Transcript
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Clark Howard (0:49)
It'S my pleasure to welcome you here to the Clark Howard show on today's national holiday, also known as my wife Elaine's birthday. So excited to later today get to celebrate my wife's birthday with her and what we're all about here. Our mission is serving you with advice and information that empowers you to make better financial decisions in your life. And remember, we are in the midst of our 34th year of Clark's Christmas Kids, where we ask you to help us see that children in foster care have gifts to open Christmas morning, gifts that they specifically asked for at a time that the adults in their lives let them down. We step up and step in to see that these kids have a Christmas somewhat like other children are able to have. Just go to Clark's Christmas kids.com if you don't have time to go through and pick out a child and pick out the gifts they want, we'll take a donation from you for any amount of money. You know, I've had the fallout in questions from people about the big run up in property taxes in state after state across the country. And during the recent election cycle, the voters of North Dakota had a chance to eliminate property tax and chose not to. Other states trying to figure this out. What do you do to not force people out of their homes, particularly older residents, maybe that are retired? I want to talk about that. And later, speaking of being older, there's a trend in the country called unretiring. Yeah, unretiring. I want to tell you what it's about and what are the implications for us as a country and particularly younger workers too. So I was stunned because I was sure, but I'm always wrong on this stuff that when the voters of North Dakota stepped into the polling booth that they would Eliminate property taxes in the state. Because what's happened over the last many years around the country is with the run up in home values, property taxes have gone up in tandem. And it's been really, really ugly for people making those payments. I mean, it's been tough stuff, but the voters in North Dakota were like, wait, wait, wait, we don't have a viable plan. My reading of it is that voters were like, we don't have a viable plan to replace the billions of dollars in taxes that underpin so much of state and local services. If we have no idea how we're going to make up that money, this is a bad idea. But people all over the country are feeling the stress of property taxes going up, up and away. It is really a budget buster for a lot of people on fixed income. So any of a number of ideas are being bandied about. A number of states have provisions. Where this all started in California with Prop 13 back in, if I remember right, 1979, which capped the growth in property taxes on someone once they were already in a home. What happens is you end up with this enormous disparity. Somebody who buys the next door home much later may be paying 10 times the property tax of someone who bought a home a long time ago. So it creates its own inequity right there. And so there have not been easy solutions to this with property tax. But there's clearly a problem. I'm a longtime volunteer and sponsor with Habitat for Humanity. And what's happened in a lot of urban cores where we have built as volunteers built Habitat homes is those areas have suddenly become hot and in. And the Habitat homeowners get priced out of their own home because the property taxes become so large that they can't afford to stay anymore and they have to sell this home that they worked so hard for, did sweat equity to be in, they pay that mortgage and yet they can't stay because they can't afford the property taxes. So we need a different process for this. We need a different way of doing so that doesn't create enormous inequity between people who come in later in a neighborhood and people that were early. Because if you just do a straight cap, you end up with that great disparity. And it's not at all unusual that a longtime resident in a neighborhood in states that do have the caps end up paying a 10th or 15th of the property tax of somebody new in the neighborhood. That's kind of crazy, right? So we need to come up with solutions. And the one that I gave a couple of years ago that generated a number of Clark Stinks is the idea of a big state, small state compromise that people would have their property taxes adjusted, there were long time residents, but that they would only absorb half of the increase in value over the years that they lived there in terms of property tax increases. Just my idea that people didn't like. I'd love when you post your Clark Stinks about this problem to offer up solutions because this is one I don't have a magic answer to. I can just tell you what we're doing right now. Pricing people out of their homes simply with what the tax bill becomes is wrong.