The following remarks are extracted from Mayor Spossey's
presentation at a forum held at Shippensburg, Pennsylvania during
1997:
When I first became Mayor of the City of Washingon in 1983-84 we
decided that we had a couple of areas that needed to be addressed.
One was the taxable rate on improvements and the other was the
assessed values on that property which had become dated. We needed
to work with the county in order to update those assessments. So
we took over the county assessments and moved them into our city
accounts so we were able to have more current assessments. At the
same time we'd had some public hearings. I had become aware of the
two-rate tax structure and it was very appealing, the fact that we
were not going to be penalizing people for renovations and
improvements and that the land that the buildings were sitting on
was something that should remain stable for all intents and
purposes.
At this time Steven Cord (from the Center for The Study of
Economics) came in and we began to do some evaluations concerning
the effects that this two-rate tax would have on the majority of
residents in our city. We have eight wards, we are heavily
populated within our wards, and we are landlocked like so many
other places in the central business district of the area. ...
We did make the turnover and we did go to the two- rate system.
This was done with a public hearing. It worked very well in our
favor after our research showed that most of the residents of the
City of Washington would benefit by switching from the single-rate
to the two-rate system. ...
The improvements not being taxed has contributed vastly to the
high incidence of building permits that have been issued in the
City of Washington. We have a lot of improvements because they
fully realize now that they are not being penalized every time
they make some some addition or improvement to their property.
The economic development part of this was also affected. When
we switched to the two-rate tax, a large office building in our
city which was paying a sizeable tax bill due to the single-rate
system was getting ready to appeal that to the tax commission.
When we switched to the two-rate tax, their tax payment dropped
drastically. Since that date, they have enlarged their facility,
they have more tenants as a result, and it is a full building with
people actually waiting to move into this structure. I feel a lot
of the reason the business stayed there is because of the tax
structure we now have in the City of Washington. ...
To conclude, the two-rate tax is not theory, it is in practice.
It is a very workable way to get things done if you have a mind to
do this.
