While wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates.
Here’s a list of tax and fee increases hitting residents of one of the counties I call home; the list includes taxes/fees raised in 2017 and 2018:
1. Property taxes: between 6.5% and 10%, depending on the property class
2. Gasoline tax (county), from 8.8 cents to 23 cents, phased in over 3 years
3. General excise tax, up 6.3%
4. Garbage fee (commercial): up 27%
5. Sewer fees: up 44%
6. Electricity (base rate): up 7.4%
7. Annual vehicle safety inspection fee (state): up $5.81
8. County water service: up 8%
8. Accommodation fee (a.k.a. hotel tax) (state): up 10%
I may have missed a few, but you get the idea: while wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates. (Given that the Consumer Price Index underweights increases in big-ticket costs such as healthcare and college, the 3.4% gain is suspect; those households exposed to giant leaps in expenses likely lost ground).
I understand local governments are caught in a vise: wages and benefits to their employees make up the majority of their expenses, and those costs are mandated by union contracts and/or state-level agreements.
Many local governments cut services in the Great Recession rather than raise fees and taxes, and so now that the economy has “recovered,” they’re rushing to raise revenues to restore services or deal with the backlog of projects set aside during the lean years.
But none of that makes it easier for households and enterprises getting hit by fast-rising fees and taxes. The above list is just the tip of the iceberg: how much does a simple parking ticket cost you now? In many locales, what once cost $15 is now north of $60.
How about the cost for a copy of an official document at the County Records office? In many locales, what was once a nominal fee is no longer nominal.
We all know public pensions are often underfunded, or dependent on outsized stock market gains, which means the increases in local government taxes and fees are just getting started.