From: stephen@sprunk.org   
      
   On 30-Mar-15 19:13, Adam H. Kerman wrote:   
   > Stephen Sprunk  wrote:   
   >> On 30-Mar-15 17:26, Adam H. Kerman wrote:   
   >>> In my state, whenever they argue that there should be more state   
   >>> funding for schools, that means a shift from property tax support   
   >>> to income tax support because the state hasn't levied property   
   >>> taxes in decades (and isn't likely to in future).   
   >   
   >>> So, if schools improve,   
   >   
   >> Spending more on schools doesn't improve performance; in fact, the   
   >> worst-performing schools _already_ have the highest costs per   
   >> student. The reason is that most of the money ends up going to   
   >> overhead, such as executive salaries, consultants, security and   
   >> corporate welfare.   
   >   
   > I'm not arguing that lots of spending is ineffective. I am fed up   
   > with those who claim, We're a poor community! We can't afford to   
   > improve our own schools (or whatever the government service is). We   
   > need state assistance!   
      
   Well, here, the state tells them if they want more money, then they   
   should raise their property taxes.  End of discussion.  The state is   
   essentially permanently bankrupt--by design.   
      
   > Well, no, what you can't afford is NOT to improve schools! That's   
   > what keeps your land values to very low.   
      
   The "performance" of the schools is almost entirely driven by the income   
   of the students' parents.  Spending more (or less) on schools has no   
   effect, so the entire discussion is moot.   
      
   (The percentage of students in a particular school failing the state   
   standardized exams tracks almost perfectly the percentage of students   
   who are eligible for the federal free lunch program.  It's all just an   
   elaborate system to measure parents' income, not students' or schools'   
   performance.)   
      
   >> The rule of thumb is market rent should be 1% of the home's value.   
   >   
   >> At current rates, the P&I on a $150k mortgage is $760/mo.  Then   
   >> figure in another $1500/yr ($125/mo) for insurance, $3000/yr   
   >> ($250/mo) for taxes, and a couple hundred per month reserved for   
   >> maintenance.  That's $1500/mo, or 1%, with no profit for the   
   >> landlord aside from the mortgage principal reduction.   
   >   
   >> If property taxes go up, the rent has to go up too because the   
   >> landlord obviously isn't going to _lose_ money renting out the   
   >> property; if so, he wouldn't have bought it in the first place.   
   >   
   > They still count on speculative increase in land value, despite the   
   > recent experience with land values returning to more realistic   
   > levels.   
      
   If the area is prone to bubbles, sure.  But just as many people get   
   caught on the downside as the upside; it all balances out.   
      
   > It's quite possible for there to be a small operating loss.   
      
   Not long term, or the landlord will sell (possibly via bankrupcy court)   
   to someone who will run that business better.   
      
   S   
      
   --   
   Stephen Sprunk         "God does not play dice."  --Albert Einstein   
   CCIE #3723         "God is an inveterate gambler, and He throws the   
   K5SSS        dice at every possible opportunity." --Stephen Hawking   
      
   --- SoupGate/W32 v1.03   
    * Origin: LiveWire BBS -=*=- UseNet FTN Gateway (1:2320/1)