Next Year’s Property Revaluation in Forsyth is Going to Be a Doozy

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From Yes!Weekly's blog post on the proposed bond referendum that would pay for streetcars in Winston-Salem among other things:

Budget challenges faced by the city include an anticipated 11-percent decrease to the property tax base with revaluation next year, the loss of federal stimulus dollars for police salaries, increased fuel costs, and plans for the city to kick in more for employee salaries and healthcare benefits.

For all of these reasons, City Manager Lee Garrity told the city council’s finance committee this evening that he is recommending that there be no bond referendum this year.

“The latest numbers for the first quarter of this calendar year are very concerning,” he said. “Sales of houses are up, as you may have read, but the price versus assessed value is down. A house in Forsyth County right now on average is selling for 11 percent below tax value. What that means for us going into the year after next with the budget is pretty significant.” (Emphasis mine).

The last time we went through a revaluation in Forsyth we were in the midst of the financial meltdown and at the time I though revaluations would not accurately reflect the true value of a property because there hadn't been time for the sales comps to have an impact on the system. Literally nothing was selling at the time so the comps were all pre-meltdown, and thus I felt they were artificially inflated. Those comps are now in the system and as the city manager pointed out this revaluation is going to show a significant drop in values, which means that tax rates will be raised significantly.

Here's the funny thing – the size of the check each property owner will be sending is likely to be close to the same amount they sent this year. That's because from the city/county's perspective they need a certain amount of revenue to make their budget (note I'm not saying whether or not the budget itself is a good thing), so when property values go up the city council or county commission will leave the rate flat or even reduce it so they can say they reduced taxes. Obviously they didn't really reduce the dollars, just the tax rate. Nice, huh? When property values go down they have to raise the tax rate, but in reality the actual tax dollars isn't much at all compared to the previous budget year. That's when you'll hear the council members and commissioners talking about how they were able to minimize the tax dollars each property owner had to send them, not the increase in the tax rate. Actually, if you read the Yes! Weekly post you'll see that they're already doing this and who can blame them?

I've said it before and I'll say it again, I think the best way to do this is having an annual revaluation. It's the fairest system because it more accurately reflects property values at any given time, prevents property owners from seeing 10-20% changes in their property values all at once, and makes budgeting for the city and county a little steadier. 

Reduced Mental Effort Leads to Conservative Beliefs?

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So, I'm reading this Freaknomics post and thinking, "If I repeat this out loud in my neck of the woods I might get my butt kicked" which of course prompted me to post it on a blog with my name on it for the world to see:

New research(summarized in the BPS Digest) finds that “low-effort” thinking about a given issue is more likely to result in a conservative stance…

The BPS Digest places the research in a larger context: “The finding that reduced mental effort encourages more conservative beliefs fits with prior research suggesting that attributions of personal responsibility (versus recognising the influence of situational factors), acceptance of hierarchy and preference for the status quo – all of which may be considered hallmarks of conservative belief - come naturally and automatically to most people, at least in western societies.”

FYI, I'm definitely posting this to Facebook so I can watch all my conservative friends get all twitchy. It's been at least two hours since one of them has blamed "Godless liberals" for the end America so I might as well get them kickstarted.

Make Sure to Tell Your Ambulance Driver to Head to the High Rent Hospital

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From the Freakonomics blog:

Both strategies show that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. We find that common indicators of hospital quality, such as indicators for “appropriate care” for heart attacks, are generally not associated with better patient outcomes. On the other hand, we find that measures of “leading edge” hospitals, such as teaching hospitals and hospitals that quickly adopt the latest technologies, are associated with better outcomes, but have little impact on the estimated mortality-hospital cost relationship. We also find that hospital procedure intensity is a key determinant of the mortality-cost relationship, suggesting that treatment intensity, and not differences in quality reflected in prices, drives much of our findings. The evidence also suggests that there are diminishing returns to hospital spending and treatment intensity.

Basically what they're saying is that if you go to the budget hospital you're likely screwed.

If Stupid People Organized

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Scott Adams (the Dilbert dude) has a blog post where he asks a simple question – "What would happen if stupid people figured out how to organize their vast numbers into a cohesive political force?" – and then provides an example of people organizing around a stupid idea via change.org and points out that the organization is a tool for both good and bad:

I don't know if the good work that comes out of Change.org offsets the bad. In any case, I don't think free speech should be curtailed. My point is that Change.org is a tool that can empower both smart people and stupid people, and that only one of those situations is good. 

In my mind a big group of stupid people isn't all that scary because, well, they're stupid and as a result Darwin's Law will kick in sooner rather than later. At the other extreme an organized group of nutjobs, zealots and evil people scares the crap out of me for obvious reasons. But what really scares me are the kinda smart people in the middle – the folks who are smart enough to get things done, but not smart enough to realize they're tools – who enable one really talented nutjob to do bad things on a massive scale. 

On Writing

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Letters of Note is fast becoming one of my favorite daily reads. Today's letter, written by C.S. Lewis to a young reader, offers wonderful and practical advice on writing. If you replace the word "writing" with "communicating" I think it offers perfect advice to all of us for our daily lives:

What really matters is:– 

1. Always try to use the language so as to make quite clear what you mean and make sure your sentence couldn't mean anything else.

2. Always prefer the plain direct word to the long, vague one. Don'timplement promises, but keep them.

3. Never use abstract nouns when concrete ones will do. If you mean "More people died" don't say "Mortality rose."

4. In writing. Don't use adjectives which merely tell us how you want us to feel about the thing you are describing. I mean, instead of telling us a thing was "terrible," describe it so that we'll be terrified. Don't say it was "delightful"; make us say "delightful" when we've read the description. You see, all those words (horrifying, wonderful, hideous, exquisite) are only like saying to your readers, "Please will you do my job for me."

5. Don't use words too big for the subject. Don't say "infinitely" when you mean "very"; otherwise you'll have no word left when you want to talk about something really infinite.

Unintended Consequences

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Most of us are familiar with the law of unintended consequences (for those of you who aren't, prohibition would be a good place to start your research) and this post at Tax.com has me wondering if all those folks fighting Obamacare in the courts might have considered the unintended consequences if they win:

The only difference between the mandate and your common tax incentive is that Congress framed the incentive as a tax penalty instead of a tax break. I recognize there might be a legal difference between the two approaches that is beyond my comprehension. But the Court, Congress, and the public should understand that economically the two approaches are exactly the same…

A tax penalty and a tax incentive have the same economic impact on affected and unaffected individuals. They have the same effect on the goals the government is trying to achieve. They have the same effect on government revenues. It is possible, then, that they have the same effect on freedom and constitutional principles.

So armchair constitutional scholars should enjoy the show. But please excuse us economists if we tune out. Perhaps too blithely, we assume the mandate will be affirmed because the nation's leading legal gurus won't want to open up a can of worms that makes all tax incentives subject to constitutional challenge. If by chance the court does strike down the mandate, by all means give us a call. It could be the beginning of the end for all those complex and inefficient tax incentives we have been complaining about all these years.

So a question for you legal scholars out there: if the Supreme Court strikes down Obamacare is my wonderful deduction for mortgage interest soon to follow?

Fart Psych

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Starting with a question – Why do people feel less of a need to fart when they're in public? (I'm paraphrasing a bit) – this writer tracks down the only study he can find on the psychology of farts. He then interviews the genius who conducted the study and is a bit disappointed to discover that no real farts were involved:

The basic question behind this paper is: how does a fart in social context affect a person's views of the farter? In order to study this, Lippman took a bunch of college students, and gave them a series of hypothetical situations in which someone farted. He asked them to rate their opinions of that person.

It's really sad to me that the situations were all hypothetical. This was part of Dr. Lippman's caricature of many social psychology studies being performed at the time, which tended to rely on pen and paper rankings while college students considered hypothetical situations. While it makes for a good caricature, I'm sad to know that my idealized vision of little knots of people with someone letting loose a silent'n'deadly never actually happened. And really, you have to think this would be a hard thing to plan. After all, how many people do you know can release a silent, deadly fart ON COMMAND?

So Lippman had students fill out surveys. In another poke at social psychology (which often involves 3 factorial designs), this one involved a FIVE-dimensional design. Just to go over the top. The variables were the following:

1) Whether you were in a group of strangers or a group of acquaintances.
2) Whether the fart was loud or silent.
3) Whether the fart was scentless or rank (the word used was in fact "rank").
4) Whether the fart was deliberate.
5) Whether the person taking the questionnaire and hypothetically "experiencing" the fart (the fart-ee?) was male or female.

The rest of the read is equally enlightening.

The Silver Lining in My “I’ll Never Be Able to Retire” Cloud

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As someone who's never made a ton of money, has been self-employed for much of my career, has not been real good about setting aside funds for retirement and is of the generation that will suffer first when the Boomers bankrupt the Social Security and Medicare systems, I long ago reconciled myself to the idea that I'll probably never be able to retire. That sounds like a bummer, but since I don't play golf I don't think it's that big of a deal. And there's this positive aspect of not retiring – I'll probably live longer:

We find that a reduction in the retirement age causes a significant increase in the risk of premature death – defined as death before age 67 – for males but not for females. The effect for males is not only statistically significant but also quantitatively important. According to our estimates, one additional year of early retirement causes an increase in the risk of premature death of 2.4 percentage points (a relative increase of about 13.4%; or 1.8 months in terms of years of life lost)…

The authors trace the effect to negative behavioral changes associated with early retirement and conclude that “32.4% of the causal retirement effect can be directly attributed to smoking and excessive alcohol consumption.”