Friday, January 12, 2018

The Road Bill Story

It's a topic which gets rare mention in the German press, yet disturbs probably the majority of German citizens....renovation costs of their streets.

It got into the news this in Hessen.  Via HR (our regional public network).

Most communities in the region have a law on the books which says that when a street renovation occurs...rather than reach into community property taxes....they use a law to hand the residents of that street the bill.  Typically, residents have to pay around 75-percent of the total bill in residential areas, and twenty-five percent in high-traffic 'main streets'.  This typically could mean a bill for a minimum of 5,000 Euro.  The city might be friendly about this and make it a five-year payment plan....but they expect you to pay this.

In some cases, folks wake up and come to realize that the bill reaches not only up toward ten-thousand Euro, but even forty-thousand Euro.  For some retirees, it's the end of ownership of the home.

So over in the Hessen city of Schlitz (northeastern Hessen, city of 9,600 residents)....a citizens initiative has occurred and the court is looking at the request. They want the Hessen law thrown out.

Why this method continues on?  Well....mayors would readily defend the law because there simply isn't real money in the municipal pot to pay for the cost of street renovation. 

What happens if the court agrees that it's unfair?  You can sit and ponder over the implications.  It simply means that you go back to the property tax situation (most folks pay 700 to 1,000 Euro a year for a 500,000 Euro house), and the whole method of figuring property taxes would have to go up in a dramatic sense....more than double probably.  That would shock some folks even more so than this stupid pavements bill that comes in the mail.

All of this leads back to the upgraded cost of renovation of streets and roads. Since the 1960s....the cost has gone up and most people just don't grasp what it costs to fix a one-kilometer long street.

The street by my German house was probably last paved in the late 1970s.  If lucky, the locals on this street have at least twenty more years before the repaving episode comes up.  My guess on cost?  Probably 5,000 Euro minimum by that point.  Add to the's a corner house, so there's a second street involved, and an additional 5,000 probably required for that street renovation.  My German wife will blow her top over that bill.

All of this boils down to a problem which has existed for decades.  No one wants to rethink the property tax business. It's mostly because of the huge tax bill that folks already handle with the VAT (the sales tax, 19-percent), the income tax, gas tax, etc.  If you told Germans that the property tax situation had to go up by 200-percent....they'd freak out.  Yet, they already freak out over the 15,000 Euro street renovation bill. 

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