Monday, October 10, 2011

Managing the Message

What the Occupy Wall Street crowd should be saying when they talk about their plight

By John F. Wasik (Reuters)

A demonstrator from the Occupy Wall Street campaign stands with a dollar taped over his mouth as he stands in Zucotti Park near the financial district of New York September 30, 2011. REUTERS/Lucas Jackson Are the thousands who have taken to the streets in the “Occupy Wall Street” (OWS) protests a bunch of anarchistic slackers or do they have a point?

If they’re protesting their personal financial situations or prospects for the American Dream, they have plenty to howl about, but the “99 percent” crowds could use some message management.

When I recently visited the Chicago OWS spin-off in front of the Federal Reserve Bank, they were decrying everything from predator drones to corporations in general. There were fewer than 100 people there, although their theme was similar to the New York demonstrations.

Instead of yelling at people ensconced behind financial district edifices, though, protesters could be making some more constructive demands. I’d like to humbly offer a few suggestions:

  • Demand that big banks give ordinary citizens the same rates they receive from the Federal Reserve on loans. Borrowers can’t re-negotiate their college loans the way a big corporation or bank can, because they have access to interest rates that are nearly zero. Moreover, students can’t consolidate high-rate private loans with lower-rate federal borrowing, so the plums of high finance are out of their reach. Those who graduated from college may be staring down decades of paying off debt — an average of nearly $23,000 per student; those with professional degrees are wincing at six-figure burdens.
  • Demand that Congress permit regular folks to discharge student debt in bankruptcy. It’s somewhat of a consolation that graduates can get lower payments based on sparse income or employment if they have federal loans, but they still have to repay those loans. If they file for bankruptcy, they can’t discharge those debts, which are like albatrosses. Not so with the megabanks, who not only received a multi-trillion-dollar bailout, but got the U.S. Treasury and Federal Reserve to buy their bad debt and toxic securities. There’s a solid reason why the delinquency rate for student loans is almost as high as credit cards.
  • Demand that Congress pass a stimulus plan to create infrastructure, education, research and clean energy jobs instead of investing in two wars that three-quarters of the American electorate thinks are senseless. If the job market were robust, none of these protesters would have to worry. Like previous generations, they could work, pay off their debts and buy things like appliances, furniture and homes. They could afford to have children and provide them decent educations. That was the American Dream. The younger generation is not getting the job opportunities their parents or grandparents had. They are faced with average 15 percent unemployment. It’s much higher for minorities. Even if they can get a job, wages are depressed due to the recession and many are underemployed, working several jobs or are part-timers.
  • Instead of targeting financial districts, focus on specific congressmen and senators blocking financial/bankruptcy reform and job creation.

Unless more people get in the face of politicians, one thing is certain: it will be continue to be a raw deal for the middle class. Now is the time for the protesters to take their demonstrations out of financial districts and into the offices of their elected representatives. All of this reminds me of when Ralph Waldo Emerson visited Henry David Thoreau in jail, who was imprisoned for not paying a poll tax. Emerson asked his friend why he was there. “Why are you not here?” Thoreau replied. Maybe we’re not quite on the streets today in spirit, but most of us were there some time ago in personal financial solidarity — whether we choose to admit it or not.

Monday, October 3, 2011

Cutting Your Property Taxes

By John F. Wasik (Reuters)

A view of a house for sale is seen in Los Angeles in this February 24, 2010 file photo. REUTERS/Mario Anzuoni/Files

The author is a columnist for and author of The Audacity of Help: Obama's Economic Plan and the Remaking of America. The opinions expressed are his own.

By John Wasik

(Reuters) - For years, the mantra of American homeownership was to count on home appreciation. Every year like clockwork the value went up and houses were a growing source of wealth.

Now, more than three years after the housing market imploded, the tune is different. It may make sense for you to prove that your home's value has dropped so you can file for reduced property taxes.

This is the time of the year when local assessors send out notices of your home's assessed value. Note, however, that this is not your real market value. It's a base value that's used to calculate your property taxes. If you want to reduce your real estate taxes, start with paring your assessed value.

You have a reasonably good chance of winning a challenge to your assessed valuation. It's estimated that some 60 percent of residential properties are over-assessed, although only a handful of home owners appeal, according to the National Taxpayers Union.

As someone who's volunteered with a local nonprofit in Northeastern Illinois on property tax issues, I know it's worth fighting assessments every year. Sometimes I win, sometimes I lose. If you feel that your assessment is too high, there are many ways to challenge it, but it takes some homework and diligence.

You can always start by checking the property record of your home, which is on file with the assessor. Does it have the correct number of bathrooms and bedrooms? Is the total living space correct? Does it list a finished basement in error? You can fix any incorrect data by either allowing the assessor to inspect your home or by submitting an approved builder's drawing or survey.

Although you can dispute the assessed market value of your home with your assessor, it's not an easy task since you may need at least three comparable homes in your neighborhood with lower values.

If you can't reach an agreement with your assessor, then you'll have to file appeals with your county and state property-tax appeal boards. Your documentation should be filed on time and you may be scheduled for a short hearing.

You can, of course, hire a consultant or lawyer to do the appeal for you, but they will charge a flat fee or take a percentage of your tax savings.

When going through this process, you may feel like it's an uphill battle. It's much easier for assessors to neglect reducing assessed values -- even though home prices have plummeted 30 percent or more in many metropolitan areas since the housing meltdown began. They're in the business of pooling money for the taxing bodies, not providing current market values.

Yet to get an idea on how much housing values have dropped, you need to consult some recent numbers from , the main web site from the National Association of Realtors, the trade association.

Here's a sampling of some markets that showed the largest year-over-year declines in median list prices, that is, what buyers were asking for homes:

*Chicago: -14.9 percent

*Las Vegas : -11.19 percent

*Atlanta: -11.17 percent

*Los Angeles/Long Beach: -10.99 percent

*Detroit: -10.39 percent

*Tampa/Clearwater: -10.26 percent

Of course, these markets have declined much more than these percentages show since the real-estate market peaked in 2006-2007. So you may be able to reap some genuine savings in your property-tax bill.

For the purposes of your assessment, you can generally only focus on the last year. Your mission is to show how similar properties in your immediate area have declined along with your home.

Assessors aren't interested in national, statewide or even county housing prices, though. Stick to your neighborhood and get a professional appraisal for assessed valuation. And if there's something that has reduced the value of your property - a recent storm, neighborhood deterioration, etc. - you should present your case with pictures.

Even if you get a reduction in your assessed value, you may not see a huge decline in your property taxes, if at all. In most places, taxing bodies can still raise their tax rates or multipliers. When multiplied by your assessed value (minus any exemptions or credits), the rates will determine your tax bill. Unless subject to a tax cap, even in a sour property market taxes can still rise.

Since they are suffering from reduced tax revenue due to the housing recession, most public services are going to do whatever they can to ensure that they receive as much money from taxpayers as possible.

The good news is that, unless you employ outside help, it will cost you nothing to fight.

There's a strange benefit in arguing that your home is worth less than the year before. While it may be a blow to your ego, it's a fight worth waging that can make a difference in your tax bills in the future.