The county has dropped its estimate of my house’s 2011 value by $19,500. That’s down $62,300 from the 2009 valuation.
In theory, this should provide some tax relief. In reality, though, it won’t: Maricopa County is going broke, like all the other municipalities in the state, and so the county supervisors intend to raise property taxes by a walloping 10 percent. They also intend to take away the 50 percent tax break on historic homes that has led to the vibrant restoration of the cultural district and urban neighborhoods flanking Central Avenue as it passes through the once-decrepit downtown area.
Out of work, Mr. Taxpayer? Broke? Living out of a cardboard box? Lie still there on the ground so we can aim another sharp kick to your kidneys.
The county offers a tax freeze for people who are over 65 and have a gross income of around $32,000 or less. I realized I could qualify for that…until I saw the form you have to fill out. What the county deems to be your 2010 income bears no relation with how much you have in 2010. It’s based on your 2009, 2008, and 2007 gross income figures. Thus after you lose your job on December 31, 2009, as one of us has, your penurious 2010 income is irrelevant.
Let us give you another swift kick, Ms. Taxpayer!
So, chances are my time in the present abode is limited. Last year’s taxes were a stretch, and that was when I was employed and self-escrowing $325 a month to cover the various annual homeowning charges. If taxes rise now that I have no credible income, I won’t be able to stay in my home without drawing a lot more down out of my retirement savings. And that may be contraindicated.
I remember when Chernobyl happened, and also remember receiving the news that milk (human and bovine) and other products in North America were contaminated by the radioactivity that blew over this continent in the weeks and months following the event. Although (thank God) we were not as hideously affected as the people who lived near the plant (if hundreds of miles away can be called “near”), I can recall responding with the same fatalism: there’s nothing we can do about it, so why should we worry?
The City of Phoenix, strapped to the point of having to lay off firefighters and police officers, has decided to institute a sales tax on food sold in grocery stores, which we’ve never had before. The new bite will be 2 percent, added on top of the existing 8.3 percent tax we pay on every other retail item.
This will raise our retail tax, effectively, to 10.3 percent.
Doesn’t stop there, though: the state is about to float a referendum asking taxpayers to approve a “temporary” (har har!) 3 percent sales tax. This would raise our extra gouge in the grocery store to 15.3 percent!!!!
Holy mackerel.
It could pose a bit of a problem for me. Depending on how you look at the post-canning finances, over the course of a year, either I have almost no wriggle room or I have a fair amount of budgetary play. Because I don’t know which and will not know until a year passes and I see what happens, the only responsible tack I can take is to assume the worst: a very tight budget, indeed. In that case, an abrupt jump in costs for food and daily necessities could be a headache of marathon migraine proportions.
The only way for me to cope with an increase like that will be to ask SDXB to buy my food and household goods at the commissary and base exchange, where he pays no taxes.
This will be extremely inconvenient, because it will mean a) I will have to wait on his convenience, and he only shops about once a month; and b) I’ll have to drive way to Hell and gone out to Sun City to pick up my groceries. There’s also the issue that SDXB, being the extremely manly sort, doesn’t pay any excess of attention to what the Little Woman wants. I can ask him to get X and only X, and I’ll end up with Y because he decides to substitute something he thinks is just as good or to buy me something that I explicitly say I don’t want. He doesn’t see any reason, for example, why anyone needs soft toilet paper and absorbent paper towels, and so when I ask for Charmin’ and Viva I get cheap TP in short rolls with the texture of newsprint and cheap paper towels perforated every six inches that are about as absorbent as wax paper.
While he can get me into the BX if he’s not dragging New Girlfriend around, he can only take a certifiable wife into the commissary. Fortunately, NG has a place in Colorado and so is gone a lot. Also, these serial girlfriends never last very long, so I don’t expect she’ll be barring the door to the BX forever. In theory, I could go out to the base with him and buy household goods in the BX and then send him to the commissary to pick up food.
Well, it’s almost tomorrow, so I’m gunna write this tonight (Wednesday), let it post tomorrow, and take a day off from scribbling to continue the various gardening projects.
Back from choir a little after 9, a cloud cover blown in on the nighttime air and a very light sprinkle starting to spit. Naturally, Cassie the Corgi was not wrung out after her 6:00 p.m. dinner, so grabbed an umbrella and the leash and set out for a late evening constitutional.
Driving home I’d seen some lightning off in the distant east but didn’t think much of it. The day was clear as a proverbial bell and I didn’t expect any rain would blow in. As we reached the apogee of our stroll the sprinkle began to come a little harder (Cassie hates rain!). We’re about as far as we usually get from the house when a big bolt of lightning C-R-A-A-C-K-s out of the sky with a clap of thunder bold enough to knock you off your feet! It was really close, certainly this side of the mountains a mile to the north.
Holy Mackerel! And there we are with a fine metal-ribbed umbrella in our paws!
We sprinted for the house, dog and human at a dead run (did you know you can run pretty well in Danskos?) and just reached the eaves over the front door as water began to pour out of the sky.
So that was a rousing end to another trying day.
Up at 3:00 a.m. worrying about the COBRA and money. If because of a bureaucratic screw-up my termination date goes into the system after December 31, am I going to lose out on the ARRAS discount? If so, then I can’t afford to buy ASU’s health insurance, and because of the ominous stress attack that landed me in the ER for a day because it so cleverly mimicked a heart attack, there’s no chance I can buy insurance on the private market. Though I have enough cash in my checking account, even after sending my excess savings off to the financial dudes for 2009 and 2010 Roth contributions, that money is earmarked for me to live on, not for some insurance company to rip off. If I spend it on $600 or $700 premiums over the next five months, there won’t be enough for me to live on without drawing down several thousand dollars from the IRA, exactly what we’re trying to avoid in an effort to recover the losses of the past 18 months or so.
And speaking of retirement funds, what about the $500 from the Fidelity 403(b) that now is not going to show up this month, thanks to yet another screw-up on the part of my beloved former employer? When I sent that cash off to the Roth, I’d figured on getting the drawdown and using it to help fund my January/February budget. How the hell am I going to get by without that five hundred bucks?
And speaking of the enforced drawdown from the 403(b), the one mandated so that the state will cough up the $19,000 of unpaid sick leave (RASL) it owes me, if those idiots screwed up entering my termination date in the state’s system, that means the ornery RASL lady also thinks I’m still on the payroll. That means she’s not processing my RASL application. And that means an even longer delay in stumbling through that procedure. The longer it takes her to do that, the longer I’ll have to take a drawdown, and the longer it will be before I can move the 403(b) money over to my financial managers, who just now are doing a great deal better with the big IRA than Fidelity is with the 403(b) funds.
{moan!} Got up, wrote the post you may have read Wednesday, dorked around online for a while, wrote a list of things to do. Went back to bed just before dawn. Got up again around 8:30 or 9:00. Sat down at the desk and got back on the phone.
First I called the Department of Administration again, reaching a new CSR. Explained the story again. She opened the payroll system while she was on the phone and said I was still shown as employed at ASU.
I said HR Lady claimed there was a “delay in the payroll system” and she intended to get in touch with DOA on Thursday. That would be tomorrow.
DOA Lady said she didn’t know about that, but she repeated that the HR system shows me as not terminated. She then remarked that DOA has no direct contact with ASU’s HR department. “They never call us on the phone,” said she.
No. Of course not. Why am I not surprised?
Eventually, I called my former husband, a corporate lawyer, to ask what he thought I should do about this, if he could suggest any regulatory recourse, and if he could refer me to a labor lawyer.
He said he didn’t know much about that sort of thing, but he did give me the name of a guy in town, a man whose name I recognized as a fellow with a reputation as a heavy hitter. Then, on reflection, Ex-DH observed that the university’s present general counsel is one of his former law partners. He suggested I should get in touch with that gentleman, since the business with the COBRA is a federal issue that could pose a fairly serious problem for ASU.
I said I doubted if he would remember me. He said maybe not, but he certainly would remember Ex-DH. I should call, remind him that I’m Ex-DH’s former wife, and tell him what is going on. Given that it’s extremely unlikely I could get past the gatekeepers in the general counsel’s office, we agreed I should try e-mailing him.
Meanwhile, Ex-DH suggested, I should e-mail and snail-mail a history of this to someone at ASU and someone at ADOA, so as to get it in writing (again!) that I was supposed to be terminated as of December 31. He said that time is now an issue.
Oh, God.
So I spent about an hour boiling the story down into as brief a form as possible, without all the flourishes one finds in blog copy and without the expressions of distress, annoyance, and cajoling one emits around the HR functionaries. Then I spent another hour writing a short history of the COBRA fiasco. This I addressed to HR Lady and cc’ed to Dean Debby (former supervisor) and the college’s Business Office Manager, adding that I hoped to see the mess cleared up within 24 hours. This little tome took BOM’s name in vain, when, among other things, I reported that during the November retiree meeting we were asked to attend, we were told to ask our departmental BOM to submit a “retire employee” request through the manager self-service system, no later than the last pay period, and that BOM had accordingly done exactly that.
Time passed. I went up to Home Depot to buy some compost and manure, the better to cultiver mon jardin. Then I spent what little remained of the afternoon pruning the roses in back and digging the fresh dirt into the soil around them, weeding the vegetables, and giving them some of the smelly new dirt, too. Along about 5:00 I remembered that tonight was choir rehearsal and realized I’d better wash the eau de cow coprolite off before leaving the house. Raced to draw a bath and toss some dog food down. Checked the e-mail while I was running around: nary a word from General Counsel.
Suspicions confirmed: university lawyers are not friends to university peons, not even if the peons are ex-wives of ex-partners. But…
Comes 5:30 p.m., my hair is wet and the bathtub is draining and the dog is running around and I’m freezing, wrapped in a damp towel, because of course it’s darned cold in here with no heat on, the phone rings and there’s HR Lady!
She’s calling, she says brightly, to let me know that ADOA finally does have my termination in its system (isn’t that great!). She will, she says, send me written confirmation of this tomorrow, but she thought I’d like to know it tonight.
Indeed.
Well, say I, what about the $200 I was supposed to have paid to COBRA by December 8, while I actually was still very much on the payroll and was still paying into the state health insurance system? (That would be the payment you never heard of, the one you said I shouldn’t have had to pay anyway…)
She will try to find out about that and report the results tomorrow, too.
Huh. Imagine that.
I figure either Dean Debby or General Counsel lit a fire under HR, given that HR Lady said she wouldn’t even get to my little problem before tomorrow. It’ ll be interesting to see what happens next.
Do they have me as terminated on December 31? Or will they decide that I died departed today, January 13, since that would have been the date the late great exit was entered in their system?
Will they refuse to enroll me in COBRA until I pony up the 200 bucks they demanded last month, which I forgot about in the confusion and general anguish that went on over the past several weeks? And if they demand that I pay that, will they also demand another couple hundred bucks for the January premium, bringing the total gouge to an unmanageable $400?
If so, where will I get the $400, since I had to pay $200 for the late great pool maintenance?
Thank God for choir. Rehearsal was challenging, as it involved a rather dramatic piece in Latin (oh, don’t we love DRAMA? 🙄 ) that I had never heard before. We got a new second alto, conveniently pushing the retired priest’s wife into the seat next to me. This lady has a good voice: she can carry a tune, she sings on key, and she sings loud enough to hear her. That’s all I need to fake success. So it was fairly easy for me to figure out the new music. And the mental workout went a long way toward taking my mind off the current spate of GDU hassle.
Wow, did I get these figures wrong! My take-home salary is far more than what appeared in the original of this post…I don’t know where I came up with a figure of $32,900. I was even sober when I wrote this! Corrected figures appear in boldface next to my original wrong calculations.
Well, it’ll be interesting to see what happens next. In 2010, my gross income will be significantly less than half of what I earn today. Assuming state and federal taxes total no more than 20 percent (a big assumption!), the combined net of Social Security and teaching will be $9,700 ($17,710) less than I net from my salary today. That doesn’t count what I make freelancing, because next year I will not be allowed to earn freelance income. Since Social Security’s rules will limit me from earning a living wage, 2010 will be a year of real penury. It remains to be seen whether I can survive under those circumstances.
By “survive” I mean “stay in my home, eat, keep my dog, and live through a 118-degree summer.”
There are a couple of extenuating circumstances.
I’ll get a chunk of vacation pay that should net out to about $3,965 (assuming GDU doesn’t pull another of its numbers on me, another Big Assumption).
About $1,900 remains in the S-Corporation, after paying for the MacBook. If I can finish the page proofs I’m reading before Christmas, I could in theory push the 2009 drawdown to about $2,200. It probably would be better, though, to delay that job to 2010, so as to leave its payment in the corporate account to cover things like printer ink and computer repairs with nontaxable money. So, let’s say I net about $1,500 from what remains of freelance income.
This will give me a grand total of $28,985 (net, if taxes are not too extortionate) to live on next year. Compare that to my present net of $32,900 ($41,210).
Two strategies may enhance things a bit:
Even though I hope to avoid drawing anything from retirement savings in 2010 (so as to wait and see if investments continue to recover from the crash of the Bush economy), to have the state consider me “retired” so that it will disgorge the $19,000 it owes me for unused vacation time, I will have to draw a few bucks from my 403(b) until such time as the bureaucrat in charge of that program approves me. So the plan now is to draw down $500 a month until we know the sick-leave payment has been approved. That process can take as long as three months, and so I’ll probably have to pull out about $1,500, adding (optimistically speaking) another $1,200 net to the 28 grand.
Now we’re approaching a net of $29,200 ($30,185), which is $3,700 ($11,025) less than I bring home today.
My share of the mortgage on the Luke house will be paid with $10,000 worth of tax-free dividends from an antique whole life policy, giving me a year’s reprieve on having to draw those payments down from savings.
Still…where is that $3,700 ($11,025) shortfall gunna come from?
Well, I put $573 a month into savings right now. That adds up to $6,800 a year. Of that, only $3,900 is nonnegotiable: I have to self-escrow that much to cover the property tax, homeowner’s insurance, and car insurance. So if that’s the only money I set aside, in 2010 I can devote $2,900 to living expenses that I used to put into savings.
So, now I’m only $800 ($8,125) short of the amount I actually spend on living expenses. That, I’m sure, can be managed through frugality and tight budgeting. (Yeah, right! Only if I sell my home and take up residence under the Seventh Avenue Underpass!)
This scenario applies only to 2010. If I have to continue refraining from drawing down savings in 2011, then things will look different. I can earn about $10,000 a year freelancing—in a good year. So the net of teaching three-and-three will come to $11,520 (in the unlikely event that taxes don’t rise much); the net of Social Security is about $12,000. Add net freelance income of around $8,000, and you get $31,250 ($31,520) as the base net income, not counting savings drawdown, in 2011.
On the surface, that’s not too bad—pretty close to what I’m earning now. (Holy Hell, it’s over ten grand less than what I take home now!) But it doesn’t count the cost of Medicare, eleven times what I’m paying for health insurance today; and it doesn’t count the cost of the mortgage, which on its own represents about 1 percent of my total savings. (I am screwed, screwed, ge-screwed!)
And we have to remember that taxes and insurance will not stay the same. On the federal level, sooner than later we’ll have to pay the cost of repairing the damage done by the past decades of ill-advised leadership. Locally, the state is still a phenomenal $1.4 billion short, even after the Draconian budget just passed by the legislature. If the most basic services are to stay in place—firefighting, police protection (forget services to the sick and elderly poor)—then our dim-bulb legislators must face the fact that they will have to raise taxes. Homeowner’s insurance, too, never goes down; and when I reach the point where I’m forced to replace my 10-year-old car with a newer model, taxes and insurance on that will increase, too.
If my investment advisers are right that my savings will return to something resembling their former glory after a year or so, then I should be able to get by on a 4 percent drawdown…as long as I can dodder into a classroom. (Dream on!) That, of course, will not be forever.
But the day after tomorrow will have to take care of itself. (By then I’ll have starved to death, so someone else can figure out what to do with the day after tomorrow.)
I must have figuredmy income on a 24-period basis rather than the actual 26 pay periods created by PeopleSoft’s hideous biweekly pay scheme, since I bank the so-called “extra” paychecks in savings. Even that is wrong, though: the annual total would be $38,040. What hat the $32,900 figure came out of, I can’t imagine!
Today we have a guest post by Revanche, proprietor of one of my favorite PF blogs, A Gai Shan Life. Enjoy!
VH asked me how I’m dealing with unemployment now that I’m well in, and I had to think about it.
Most notably, believe it or not, is the fact that I was laid off almost six months ago and my head has not yet exploded.
It should have, considering the degree to which I obsessed over every possible detail of pending unemployment in the months prior to L-day (all the gory details of which you can find blogged between the dates of July 2008 and June 2009). But it didn’t.
In all my planning and calculating, plotting and planning, résumé-building and interview scheduling, I utterly underestimated the sheer freedom that comes with unemployment.
Not the freedom of just staying at home all day in my pajamas, if I please. [Don’t ask me if that’s ever happened, please. Let me have some dignity.] The kind of nearly spiritual freedom, relief really, that comes of knowing that my time shackled to that job out of a sense of responsibility to provide for my family, to do the right thing, to be grateful for the job I had in this economy, was over. Out of a job though I am, I’m also free of the company and of the kind of people who believed in lying, cheating and scamming. Not my kind of folk.
Flying utterly in the face of my workaholic tendencies, I’ve discovered an odd and unnatural secret of unemployment: if you have some financial security, it can actually be refreshing. Who knew?
Whether or not you know me, that sounds like crazy talk.
I assure you, I haven’t lost my mind. I hate not having a steady, full-fledged income, I hate not contributing to my retirement accounts, I hate that I haven’t deposited money into my savings accounts in massive chunks in oh-so-long. And this time has been filled with working on projects, seeking out challenging employment opportunities and interviewing.
I would be remiss, however, if I didn’t admit that I’ve also discovered the wonders of having the time to travel (New York, San Francisco, San Diego), travel (New York), and travel (Hawaii). I haven’t ever had this kind of freedom to hit the road, I could not have jumped in the car and gone to a friend in need while fully employed, and I haven’t ever been able to take classes without wedging it into 12-hour workdays (before, during or after college). These things are important to me, and without this breather, I doubt that my life plan would ever have allowed for discovering new cities, or the commitment to taking care of ill or grieving friends. And with certain health issues, I can’t tell you how many times I’ve realized I’m allowed to rest instead of forcing myself to face another 18-hour-day despite my body’s pleas for surcease.
The cost of this freedom, all the deprivations of earlier years, was completely worth it. That’s easy to say now because 1) I don’t feel them anymore, and 2) I’m practically living in the lap of luxury now thanks to how I lived before. What’s that saying, “Live like no one else will, so you can live like no one else can”? That little truism is absolutely true. It wasn’t easy being sensible about every penny I spent, and I can’t discount the unemployment income and subsidized COBRA, which have both gone a long way in stretching out my savings as well. But I’m able to look for the next best career step, pay my bills, stay out of debt, and still do good things. That is well worth the extra six to twelve months spent in the next best thing to Dante’s Inferno.
So how am I doing? Right now, though VH occasionally twits me 😉 about stacking up enough cash to be the envy of fellow unemployeds, I’m nervous about the future. I’d be a fool not to be—in this economy? With these pseudo-if-not-real hiring freezes? Since last week, I’ve seen three more friends lose their jobs and another floundering to keep his business open. Times remain very tough, economic indicators notwithstanding.
Still, I’m not allowing fear to paralyze me. I’m working hard to find my next new path and get well, and I’m also trying to stay in the moment and enjoy a little of what I’ve earned. We’ll see how I fare in the next six months as benefits start to run out. I certainly hope to have landed a job by that time.
