Our Annual trip to Age-segregation City, Arizona
March 21st, 2008,
We recently made our annual trip to visit my wife’s grandparents in Sun City West, Arizona, about an hour or so northwest of Phoenix. Sun City West is one of those Del Webb retirement communities, like the original Sun City (which is near Sun City West).
It’s a bit strange that Sun City West calls itself a “city,” since it really isn’t a city in the strict sense, as its web site explains:
Sun City West is a “city” in name only as it is an unincorporated community. As such, it does not have the usual city government structure. Maricopa County provides street maintenance, building and zoning codes, law enforcement and public health services.
You won’t find any schools in this community of 26,000 people, nor will you find many playgrounds, because, according to a representative at their visitors center, to live here one person in the household must be 55 years of age or older, and no one younger than 19 can visit for more than two weeks at a time.
One benefit of these rules, at least for those who live here, is that property taxes are low. “Many of our homes do not even have a school tax,” their web site boasts. Their page on fees and taxes states this:
Local school taxes can often be a major part of property taxes but most of Sun City West was removed years ago from the surrounding school district. As a result, a typical property tax on a $395,000 home are less than $1500. annually.
An age-segregated community such as Sun City West raises some questions. What is lost and gained when we separate the generations? How ethical is it for people to avoid paying school taxes, particularly people who have benefited from public education themselves?
There is an element of racial segregation to the city as well, given its special character and history. According to the 2000 census, 98.71% of the residents are white. Of course a large percentage of the workers are not white.
Finally, I should say something about the picture above. Sun City West bills itself as “Arizona’s finest golf retirement community,” and as the picture attests, golf carts are a common vehicle for transportation. Many streets have a narrow outside lane that they can use. This, at least, is something that I’d like to see other cities - oops, communities - embrace as well.
March 21st, 2008 at 8:37 pm
“[T]o live here one person in the household must be 55 years of age or older.”
Has there ever been a legal challenge to such a rule?
March 22nd, 2008 at 10:43 am
I don’t know.
March 22nd, 2008 at 2:48 pm
This is all legal. The Housing for Older Persons Act of 1995 allows for communities to discriminate based on age as long as they maintain at least 80% of the homes above a certain age…typically 55.
More info here: http://www.fairhousing.com/index.cfm?method=page.display&pageid=663
Bill
http://www.55places.com
March 23rd, 2008 at 6:36 am
Thanks, Bill. Do you have any idea what percentage of large 55-and-older communities are exempt from paying school taxes?
One concern I have is that such exemption not only make it more difficult to finance the education of our youth, they also exacerbate tensions between the generations. As I said above, many or most of the elderly in Sun City West and similar communities have benefited from public education, and they benefit from taxes paid by younger folks (via Medicare, Social Security, etc.)
If we have fewer and fewer young people to support our elderly population, the young people’s tax burden will likely grow greater, even while those at Sun City West and elsewhere have chosen to make their tax burden lighter with respect to the younger generations.
March 23rd, 2008 at 10:12 pm
This is appalling. I exclaimed, “Un-American!” after reading the original post - but on second thought, what’s more American than dodging one’s civic obligations - especially taxes. I’d like to hear a denizen of one of these low-tax havens explain just why it is that they should be allowed to stiff their kids and grandkids - and the rest of us.
March 24th, 2008 at 12:12 pm
1. Sun City West is what it is. Is everything of anything perfect?
2. The average income tax and taxes other than property tax is higher than most other communities of 26,000. We do a great deal to support the tax structures of surrounding communities.
3. There is also a great deal of volunteerism throughout the area. Large numbers of volunteers work directly with the neighboring schools directly and though various scholarships. Additionally, many work through various organizations to support other charities including homeless shelters and food banks.
4. I’m not sure of others, but I would live here even if we did support the schools.
5. As to the question of segregation, it never occurred to me. Whatever the reason, it is not because the “city” keeps others out. I have the feeling it is a combination of the generation of the majority of residents, income levels and personal choice of potiential residents. Why do you think this occurrs?
March 24th, 2008 at 1:30 pm
Thanks for your comments, Christopher and Joseph.
On the issue of age segregation, that obviously exists in Sun City West and other over-55 communities by definition. I’m not sure why Sun City West would not be racially diverse. As you say or imply, Joseph, it likely has something to do with property values and personal preference, on the part of white as well as non-whites.
All of this begs the question, how important is diversity in a community?
March 24th, 2008 at 10:43 pm
We seniors have worked for some 40 to 50 plus years in corporations and instituitions, paying a heavy tax toll on property, rental and sales taxes. At some point we become “too old” to work at our job despite our education and experience. We look forward to enoying our freedom of life without the daily requirement of rising at 5 or 6 AM to travel to jobs or flying off to regional offices to put in 12 -14 hours days. Since nobody will hire us at the wages we have progressed to, we look to living in communities where a fixed income will pro5vide for our needs. We have paid dearly to the school and community and county and state coffers as well as federal. Now we have the opportunity to to live in an area where our volunteer work is welcomed and we can maintain a living partly due to not paying exhorbitant school taxes. We are also enticed to live in areas where we don’t have our small pensions and fixed income taxed by the state. Why not live outside Minnesota? Minnesota has no monopoly on great places to live. Even if many seniors continue to live in Minnesota, on a fixed income, many don’t earn enough to pay and the high state property tax and receive a 50% rebated on our property tax. You, young and upping comer professionals, need to pay the share of the taxes that we have paid all these years.
March 25th, 2008 at 9:51 am
Of course it’s in people’s economic interest to seek out low-tax havens, but if more and more of these havens are created, then we have a problem.
Another thing to think about: years ago, retired people and others paid property taxes that helped educate and provide government services (roads, etc.) for today’s generation of retired people when they were young. Communities of older people that seek to cut their ties, financial and otherwise, to younger generations undercut that multi-generational web of support.
March 26th, 2008 at 5:17 pm
“If we have fewer and fewer young people to support our elderly population, the young people’s tax burden will likely grow greater.”
One part of a solution would be to welcome immigrants and help them develop their human capital. That way, our country could maintain a stable demographic composition and avoid the necessity of hiking taxes on workers.
As for the assertion that Sun City West is a “tax haven,” I think the label more aptly applies to places like the Cayman Islands and, possibly, Dubai, where billions of our gasoline dollars are pooled. Everyone in Arizona at least pays federal income and local sales taxes.
March 27th, 2008 at 5:03 am
Good points, Chris. Surely Sun City West is a partial tax haven if its residents avoid school-related taxes that residents of other communities pay.
March 27th, 2008 at 10:06 pm
That’s true, Bill. It is a form of tax haven.
As I look back on my own experience in the public shool system, though, I realize that I thought it was really free, instead of “free.” Perhaps if starting in junior high students were shown an itemization of the cost of putting them through an academic year along with an explanation of where the resources come from, there would be more of an appreciation of what the community invests in us while we’re young. The added perspective could only help prepare our youth for responsible citizenship.
March 28th, 2008 at 10:23 am
Good idea, Chris.
By coincidence, we received our 2008 Property Tax Statement from the county where we live. The total property taxes on our townhouse were $1724 in 2007. As part of that total, the school district levies were $805 - more than half of our property tax.
School districts in Minnesota also receive money from the state, I believe, and assume our income tax pays for that.
April 3rd, 2008 at 7:24 pm
While I wouldn’t choose to live in a whitebread Stepford, I’m sympathetic anyway to Anonymous’ economic plaint. We can’t hope to fund social needs by taxing the fixed-income elderly to the grave: talk about diminishing returns!
No, the problem no one has yet touched on in this excellent discussion is our corrupt property tax system for funding public ed.
It’s corrupt because:
a) it already selects for and preserves exclusivity through funding the best schools in bastions of privilege such as Minnetonka and Wayzata where Bill, Chris and I grew up;
b) bastions are a zero-sum problem: they lead to anti-bastions, like North Minneapolis, with its meager tax base, struggling schools, low-prospect populations;
c) the white exurban populace has chosen this method to ensure its self-interest at the expense of urban minority schools. That’s tribalism at its most anti-social.
Happily, it can’t last. Collapsing housing values will soon choke many state and municipal governments, and we can at last have a debate about how to proceed.
The solution is to fund all schools in egalitarian manner — through proportionate federal taxes. Do not forget that under the present tax amnesty for the rich, we are allowing them as well as powerful corps to amass baronial fortunes: that’s funding denied to your kid’s education, hoarded instead for your betters’ luxury. Will it be books for all or more diamonds for Paris H.?
April 4th, 2008 at 12:54 pm
Oracle’s Ellison Wins Tax Cut on Home, Upsets Schools, Parents
By Ryan Flinn
Enlarge Image/Details
April 4 (Bloomberg) — Larry Ellison, the billionaire head of Oracle Corp., spent at least $200 million to build a house on his 23-acre Silicon Valley estate south of San Francisco.
When San Mateo County tax officials valued the residence, a reproduction of a 16th-century Japanese emperor’s country house, at $166 million, Ellison protested. He argued, through his attorney, that the property was so elaborate no one else would pay that much for it.
After more than two years, Ellison won his case before a county appeals panel, receiving a $3 million tax refund. Now local schools and parents are the ones protesting.
“He’s essentially taking money away from the education of the kids of this county,” said Maren Christensen, 46, parent of a second-grade student at Ormondale school in Portola Valley, California, near the town of Woodside, where Ellison’s estate is located.
The Portola Valley School District estimates it will lose as much as $300,000 from its $10 million budget because of the decision.
“For us, it’s the worst case scenario,” said Tim Hanretty, assistant superintendent. “We’ll survive. This community and school district will rally.”
The school district, with more than 700 students, probably will have to cut six non-teaching jobs from its 120-person staff because of the ruling, Hanretty said.
$25 Billion
Ellison, Oracle’s 63-year-old chief executive officer, is the world’s 14th-richest person, with a net worth of $25 billion, according to Forbes Magazine.
William Bennett, Ellison’s lawyer in the appeal, and Deborah Hellinger, a spokeswoman for Redwood City, California- based Oracle, didn’t return messages seeking comment.
California schools already face budget cuts. Governor Arnold Schwarzenegger earlier this year proposed to trim spending by as much as 10 percent from all state agencies to fill a deficit that reached as high as $16 billion in February, caused by the loss of tax revenue amid the worst housing slump in the U.S. in 26 years.
The state’s top education official said an estimated 20,000 teachers and school support staff may lose their jobs as a result.
In its ruling, the San Mateo county assessment appeals board reduced the taxable value of the property belonging to Ellison by $100 million. After that decision, at the existing rate of 1 percent property tax, Ellison would owe $646,770 for tax year 2005, the year he appealed the value of his home through his Octopus Holdings LP.
Fielding Complaints
“Legally, Larry Ellison had every right to do what he did, but it would have been nice if he considered the impact to the Portola Valley School system,” said Angela Schillace, 40, who has two school-aged children in the area.
The school district is trying to make up for the loss of money by asking a local foundation to donate unallocated funds, leaving some jobs unfilled, and exploring cost-saving measures with other area schools. In addition to state-wide cutbacks, the school will face an increase in the enrollment of kindergarten students next year, requiring more teachers to handle the class load, Hanretty said.
While San Mateo County’s Board of Supervisors is fielding complaints from residents, there’s nothing it can do, said Bill Chiang, a spokesman for its president, Adrienne J. Tissier. “This whole thing has little to do with the board,” he said. “It’s not something we allow or don’t allow.”
Residents have called expressing emotions ranging from “upset to outrage,” said Richard Gordon, a member of the board of supervisors.
“Perhaps Mr. Ellison would like to be directed to one of the school foundations” to make a donation, Gordon said.
To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net.
Last Updated: April 4, 2008 00:01 EDT
April 4th, 2008 at 1:26 pm
Good points, Richard, and thanks for the article, Chris.