*Say you are the King and in one year squeeze a single silver piece in taxes from the peasants but want a new drawbridge for your moat. So the next year you squeeze four silver pieces from the peasants to build your new drawbridge “for the good of the Kingdom”! Did you just enact a 300% tax increase? YES! But don’t tell that to the Tampa bay Times and its Politi“Fiction” machine. The Tampa Bay Times is known for using its Politifact brand to push its own agenda by bending the truth through misinterpretation of facts and debunking straw man arguments. Only rarely, when the truth is so obvious it can’t be ignored, do they agree with reality (e.g. Lie of the Year: “If you like your insurance you can keep it.”) On 3/20/14 Politifact tried to “debunk” a pure, simple, indisputable fact about a 300% tax revenue hike for the PSTA by labelling it –well – “False”. They put the following statement from rail opponents No Tax for Tracks** to the test: “Greenlight Pinellas is nothing but an attempt to put a Happy Face on a 300 percent Tax increase and Money Grab.” A simple analysis of the facts reveals that the Times is trying to hide the fact that the PSTA Emperor has no clothes as they squeeze silver from Pinellas residents – for the good of the Kingdom of course.
Just as the Chamber of Commerce has trouble with simple math on calculating a 14% tax rate hike – (even the Times admits that 14% tax RATE hike is real in the same piece) – the Times has trouble with simple math here. The facts are, as admitted and reported by Politifact “The new sales tax is projected to increase the authority’s budget from its current $34 million per year to about $120 million to $130 million”. So the Times recognizes that the PSTA will collect an additional $100 million in tax revenue. So let’s do the simple math to calculate a percent increase (note that the $30 million number is based on the 2014 prediction for property tax revenue from PSTA data in a 2012 budget analysis, page 10)
|Formula: (new rate-old rate/old rate)*100=Percent Change
130-30 = 100
3.33 x 100 = 333% sales tax rate hike
It is pretty clear, the PSTA will be increasing their tax revenue by more than 300% in the first year alone. However, it will get even worse with time! The 2017 projected revenue is $148 million based on the taxpayer funded 12/13 Consultant’s report for Greenlight Pinellas (page 7, sect 2.2.1) which stated: “At these growth rates, the new transit-dedicated sales tax collections would total $148.0 million in the first full year of collections (FY 2017).”
So as it turns out that in 2017, the actual tax revenue hike for PSTA will be 393% (using same math as above)! In the years beyond, it will get even worse since the same consultants report indicates that the sales tax revenue is predicted to grow 3% per year forever (see next week for more on that). The Times relies on many misleading and irrelevant items to confuse the matter. It claims that the property tax will go away even though that is not voted on in the referendum. They claim that they are calculating the impact for an individual tax hike, while there was never a claim of a 300% INDIVIDUAL tax hike by No tax for Tracks. They point out the irrelevant fact that amounts over $5,000 are not taxed following talking points of the Greenlight Pinellas Campaign (while not pointing out that commercial rents and many construction supply taxes, service warranties and utility bills will have no such ceiling). They then admit that people who own NO property will have no relief from the property tax cut if it occurs. They point out that such a person will pay an extra $104 in sales tax indicating that is only a 14% hike. Of course that is for a median income family ($46,000) with two children. Unfortunately, the individual median income in St. Petersburg is about $25,000. So for those who make the least, who have no property to relieve from property taxes and will now suffer the highest sales tax in the state (8%), they will be paying more out of pocket than ever before to help fund the 300% PSTA tax hike.
To use the King and peasants “tax squeeze” analogy from above, the 300% tax hike is not real only IF you don’t count the fact that the aristocrats get a property tax cut while the peasants pay more in sales taxes. The latest Politi“Fiction” by the Tampa Bay Times is offered by hard core rail proponent, is motivated to confuse, not to illuminate and it can only be rated as “False”.
*Friday Funnies will return next week.
**Sunbeam Times Editor and Founder Dr. McKalip is a contributor to No Tax for Tracks.