THE BABY BOOMER GENERATION & THEIR EFFECT ON REVENUE & SERVICES

Since the publishing of this page in December of 2007, we have found that coincidentally a report was published - the same month - by the Journal of the American Planning Association. "Aging Boomers and the Generational Housing Bubble" echoing our stance.

There is an elephant in the room. And no one is talking about it.

Washington state, like so many others, has a fiscal train wreck heading toward critical mass.

By the sheer size of their numbers, Baby Boomers - the most influential population - has begun to retire: 78 million people, one in four Americans. Massive numbers of Boomers will be living on fixed incomes, many also considered low-income households.

This state will be losing a substantial tax base in the coming years.

And our antiquated property tax system tied to fair market value to fund our vital services works against this reality, by making home ownership more and more difficult to sustain.

However, it is not just a matter of alleviating the burden on property owners. It is the very real problem of funding the increasing cost of services with the Boomer tax base eroding.

It is no longer a choice, it is an imperative to rethink our reliance on an outdated system to fund services.

When one in four people begin to live on a fixed income, past their prime earning years - no longer able to substantially increase their income to accommodate taxes tied to property appreciation - how will taxing districts fund services?

The Baby Boomers can no longer be counted on to take care of everyone else. Baby Boomers are now becoming the ones that will need taking care of. Boomers will be the ones needing care in retirement homes and rehab and nursing facilities. And subsequently, large numbers of homes will be flooding the marketplace.

The escalating costs of private health insurance - a good health insurance policy for a husband and wife through BlueShield is approximately $14,500 a year - has been and will continue to create a dilemma for cities and counties in order to keep themselves in business through dwindling property tax dollars.

With an escalating aging population, there will be an unprecedented drain on emergency services.

When fixed income families can no longer afford their property taxes, the elderly will forego medications in order to keep a roof over their head.

Where will funding for these increasing needs be found?

The largest percentage, half of our property tax bills, goes to education - to yet another broken system. And this percentage has every earmark of more increases as there are more types of levies coming - technology levies and funding of all-day kindercare.

With an eroding tax base, how will schools meet our constitutional mandate?

Even downsizing for strapped property owners is a problematic option. From a lenders' point of view, the elderly are poor candidates for mortgage loans especially when the rising number of foreclosures currently hitting the mortgage industry are taken into consideration.

This situation will not only affect homeowners or mortgagees. Not everyone owns or is buying a house. But everyone has to live somewhere. This will also affect renters and landlords. Our property tax system will create a surplus of rental units, supply and demand will require that rents will go down, and thus landlords' incomes are negatively affected.

If a remedy is not sought for this situation, and boomers are forced to move elsewhere - including out of state - there are not sufficient numbers in the generation behind them to buy up the surplus that will be created. The current slump in the housing market is making the news today. But the surplus on today's market has not
yet reached its potential.

And so it goes...

This gravy train is coming to a halt - whether or not we choose to admit it or deal with it.