Prop 13: Idiocy Comes Home to Roost in California

[Danno 1,228]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

these articles about california's financial woes. like schwarzenegger terminating thousands of jobs because of the most recent budget crisis. always fail to mention proposition 13, passed in 1978 which doesn't allow the state to raise property taxes. property tax is perm. set at 1%.

section 1 of proposition 13 states: the maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. the one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

http://thekrays.wordpress.com/2008/08/01/c...elated_content/

YEah back in the 70's...

IF you could enjoy all that free collage and such back then on that tax rate paid back then.... why can't you now?

In fact houses have sky rocketed in value since then and I bet property tax revenue has as well.

The the truth is, Cal is a bankrupt state, people and business have been leaving the state for years now. Instead of trying to figure out WHY and how to reverse this you want to steam ahead doing the same things which traded "contributers" to the system for "takers".

Good luck with that.

In the end you will come with your hands out begging the rest of the country (who typically don't have such givaways) to bail you out.

[mox 298]

they could taxes us 20% more and they would find a way to spend it all on things we dont need, then ask for more.

Hmmm, that's actually a difficult reply to argue against. Nicely done.

Unfortunately the CA legislature is filled with idiots from both parties. The current budget impasse is crippling the state, and yet all they can do is hold fast to ideological party lines instead of actually work together on a solution for Californians. When the governator starts to make sense you know something is wrong. Prop 13 needs to go, but right now the most important thing is to pass a budget so that the state doesn't grind to a halt.

[one...two...tree 2,762]

Prop 13: 30 years later, it’s time to stick a fork in this loser

In case you missed it, Sunday marked the 30th anniversary of the passage of Prop 13, the measure that capped California property tax increases and ignited a taxpayer revolt across the country that blah, blah, blah…If you don’t know much about it, the folks at Cal Tax Research will be happy to give you the history here.

The real debate going on today is what we have gained and what have we lost. Two Sac Bee columnists lay out the debate here and here. The Bee’s Dan Walters gets to the heart of it:

“Then-Gov. Jerry Brown, who was running for re-election, had strongly opposed Proposition 13 along with virtually every other political figure, but immediately declared himself a “born-again tax cutter” and later ran for president while chanting that mantra.

Brown is back in state politics as attorney general and a likely candidate for governor again in 2010. If the state’s fiscal crisis continues, as it likely will, he may once again have to confront the never-answered question that Proposition 13 posed:

What do Californians want from government, and what are they willing to pay for it?

“

My personal take: It’s been a disaster for the state and remains grossly unfair. There’s simply no justifiable reason that I pay 10 times the property tax as my neighbor (which I do). But more on my thoughts later.

The big “news” this morning is that California taxpayers remain delusional and are still in love with their precious Prop 13. According to a Field Poll release on Monday:

“The property tax reduction initiative passed in 1978 with 65 percent of voters in favor and 35 percent opposed. The Field Poll found that if the vote were held again today, 57 percent would still vote “yes.” Another 23 percent would vote “no,” and the rest are undecided.”

A quick scan of the state’s major newspapers editorial pages shows a range of takes on Prop 13’s legacy.

Let’s start with mine. Our editorial board still has a major crush on Prop 13:

Correction: This was a Contra Costa Times editorial, and NOT from the Mercury News:

“Californians today should be wary of any attempts to dilute Proposition 13 because of current state deficits. The huge growth in state spending in recent years under both Govs. Gray Davis and Arnold Schwarzenegger — and the resulting deficits — should be warning enough of what could happen on a local level if Proposition 13 were gutted.

Voters must not allow any further erosion of the single best protection Californians have against runaway taxation.”

Up the road, the San Francisco Chronicle has mixed feelings:

“The measure has meant surety and hard restraint in property taxes. But it hasn’t brought fairness or balance to a growing state. For now, California is living with that trade-off.”

And way down south, the Los Angeles Times meekly calls for a re-examination:

“Defenders of the measure and its offshoots have taken to reflexive denunciations of any attempt to discuss Proposition 13 and whether it should be amended to provide fairer taxation for residents, and more rational levels of revenue to pay for the quality of infrastructure and governance that Californians still expect. But birthdays ought to be a time of self-examination. Proposition 13 provides predictability for homeowners, and it ought to be retained. But it may be time for a haircut.”

Clearly, if you’ve stayed in a house a long time, then Prop 13 has been a godsend. But it also has become a big dis-incentive to moving. Move, and you risk a big jump in property taxes.

Also, while it’s kept bills down for homeowners who stay put, I don’t think it’s helped keep overall housing costs more affordable. Clearly, even in the current downturn, housing is way more expensive in California than in most areas of the country. Brokers and Realtors know how much someone can spend on a house, and still try to get the maximum. So while taxes might be less, the mortgage for a new home buyer is probably the same overall, with the cost simply shifting to a higher mortgage rather than the taxes.

There’s a healthy debate over just how much impact this has had on the overall state budget. But one thing is clear: By relying much more on sales personal income taxes, California’s budget has been vulnerable to big swings in the economy. And legislators, and the governor somehow reamain unprepared for this phenomenon, year after year. Thus, we’re living through yet another budget crisis.

Also, much of the discussion about Prop 13 tends to be about how it has helped home owners. But people often forget that Prop 13 extends to commercial real estate as well. And because commercial property tends to change hands less frequently, businesses have probably been bigger beneficiaries of Prop 13 than the average Joe.

But let’s circle back to Walters’ question: What do Californians want from government, and what are they willing to pay for it?

The central hypocrisy of Prop 13 lies with the people, not just our government. And it’s a symptom of the era we live in. Everyone claims that we want smaller government (well, not everyone. But…) and that we want lower taxes. That’s the dominant theme of our political culture.

But take one step to cut one thing from a state or federal and there will be a howl of protest. And so spending continues to grow, but probably at a pace slower than what is really needed to fix our schools and infrastructure. Yet government can’t raise the appropriate taxes to pay for it.

So, what to do? Answer: The lottery. The lottery is essentially a means by which we trick ourselves into paying taxes. It’s the work around that government has developed to balance out the contrarian impules that flow from the tax cutting culture and the desire for more government spending.

And notice that in this latest budget crisis, our governor is once again turning to the lottery to paper over the budget problems.

It’s time to stop this nonsense. Scrap the lottery. Scrap Prop 13. And just start from scratch. Create an equitable and predictable tax system that funds the programs California needs to get back on track and recover its legacy as a leader in state government and education that it last had back in the 1970s.

http://blogs.mercurynews.com/obrien/2008/0...-in-this-loser/

[PlatyPius 5]

proposition 13 dont we pay more than enough in taxes already?

Your infrastructure is crumbling, your children aren't being educated, you don't have enough police or firemen to meet the current needs, your levies are completely out of date, and the government is about to be shut down because it can't pay its workers. So...actually no, I don't think you're paying more than enough taxes already.

they could taxes us 20% more and they would find a way to spend it all on things we dont need, then ask for more.

Like giving homeless people in San Francisco "paychecks" for being homeless? (and wondering why there are more homeless rather than fewer)

[DEDixon 39]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

My thoughts, exactly. How could people ever afford to retire in their home.

California's problem isn't Prop 13, it is too much spending.

People say OMG, the schools are bad, but then you hear about the janitor making 90K on overtime. Police officers make over 200K on overtime. Public service workers retire at current pay. The illegals in our schools and hospitals. Much could be done to do more with what we have, however first choice is always to raise taxes. If Prop 13 ended, it would not solve anything. They would simply spend all that it brought in... it would be nice for a while, but soon they will start projecting revenue and spending on projections and again the projections would fall short and then we are in a mess all over again.

Funny when people say... if only Prop 13 would end. BS!

[w¡n9Nµ7 §£@¥€r 123]

DEDixon, I don't know about Prop 13 in California, but I do agree with the overall direction you're going in. When spending runs amok (I live in NJ, that is true here too) then raising taxes without addressing the root problem is pretty goddamn stupid.

[DEDixon 39]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

Yeap, California has a country load of illegals who do not speak English going to its schools. For the students that have managed to learn English, they have parents at home who can't guide them in school as well for they have very little education and don't speak English.

The left complains about school while inviting illegals in to tear down to quality... great plan. Dollars toward education won't fix irresponsible parents.... both the legal parents and the illegal parents.

[DEDixon 39]

My condo is down about 300k from what it was a year ago and I won't be getting any tax break

I got one. I just sent in a few pages of houses in my zip from realtor.com and they reduced quite a bit. I'm going to do the same thing on Jan 1. They adjust according to what values are on January 1.

[Hilarious Clinton 452]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

Now there ya go again, worrying about Old folks who who selfishly are trying to live out their golden-years in their own house.

INstead you should be worrying about freeing up the taxing schemes of left-wingers who will not tolerate limits on ways to raise taxes.

HOw are they gonna pay for research on the mating habits of snails ....or buy cable TV for inmates, if old folks won't pay "their fair share" in taxes?

Word to your mum.

California needs to control it's SPENDING.

[one...two...tree 2,762]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

Yeap, California has a country load of illegals who do not speak English going to its schools. For the students that have managed to learn English, they have parents at home who can't guide them in school as well for they have very little education and don't speak English.

The left complains about school while inviting illegals in to tear down to quality... great plan. Dollars toward education won't fix irresponsible parents.... both the legal parents and the illegal parents.

So California's deficit problems are because of illegal immigrants and irresponsible parents?

[one...two...tree 2,762]

The Curse of California's Proposition 13

By EDMUND L. ANDREWS; EDMUND L. ANDREWS IS A WRITER WHO SPECIALIZES IN BUSINESS.

...

To believers, Prop. 13, as it is known, amounted to a primal scream by The People against Big Government. No longer would homeowners, particularly elderly people on fixed incomes, have to watch their property taxes skyrocket just because land values soared. No longer would governments grow wildly, their treasuries swollen by soaring real-estate prices. The people had finally had their say: ''Enough!''

These goals may well have been accomplished, but at unforseen costs. Yes, government services may have declined somewhat, and streets and sewers may be in danger of falling into disrepair, but that's not where the real damage has been done. There has been a huge shift in the tax burden to young families from older homeowners and owners of businesses. Also, Prop. 13 has fostered a perverse bias toward construction of shopping malls and hotels rather than low-cost shelter. Beyond that, because of lower revenues some communities are trying to circumvent the consequences of Prop. 13 by imposing ''user fees'' on tightly targeted groups of taxpayers to finance such general services as sewers, parks, education and electric power.

The biggest beneficiaries of Prop. 13 were not homeowners but businesses. The law curtailed assessments on all property, not just homes, and there is considerably more commercial property than residential. According to the sociologist Clarence Lo, author of a forthcoming book on tax revolts, California homeowners received just one-third of total tax relief in the first five years under Prop. 13. A whopping 57 percent of benefits went to owners of commercial and industrial property.

Insofar as Prop. 13 did benefit homeowners, it did so by picking the pockets of people buying houses. Since the latter tend to be younger and less affluent than those already ensconced, this isn't exactly progressive. Here's how it happens:

First, home buyers still get slammed on property taxes, because their rates are pegged to current land values. By contrast, folks who bought their homes before 1978 pay taxes based on their home's 1975 assessment, which can be hiked by no more than 2 percent a year. Since the median price of homes in California has doubled since 1978, the disparities between identical homes can now be huge. According to Jeff Reynolds, head of research for the state's Board of Equalization, pre-Prop. 13 homeowners pay one-quarter to one-third the tax rates of more recent home buyers.

The undemocratic effects of Prop. 13 go further. Starved for revenues, California cities have been aggressively hunting for new sources. They could raise rates, but that would be political suicide. They could stop repairing roads and schools, but that wouldn't be much better.

Their solution, instead, has been to charge vastly higher ''impact fees'' on new homes. Theoretically, impact fees cover the cost of new streets and sewers associated with new homes. When tax revenues financed these costs, impact fees were minimal or nonexistent. Since Prop. 13, though, they've been soaring. In 1983, they averaged about $5,700. By 1987, they had zoomed to $11,807, according to a survey by the National Association of Home Builders. On top of that, cities now frequently demand that developers also foot the bill for new parks and schools.

At first blush, this might seem fair: New home buyers pay for new infrastructure. In reality, it's a shakedown. If you combine higher tax assessments with sharply higher impact fees, the upshot is that newcomers, many of whom struggled mightily just to make their first down payment, are subsidizing public services for low-taxed landed gentry.

A more subtle effect of impact fees is to bias development toward more upscale housing. Why? Because in most cities the fee remains the same regardless of the cost of a house. Obviously, it's easier to roll $12,000 into a $300,000 quarter-acre home than a $100,000 starter.

Small wonder, then, that California lags below the national average in home ownership and home affordability. Since 1979, the proportion of owners to renters has dropped every year, from 59 percent homeowners to 53.4 percent. By contrast, the nationwide percentage of homeowners slipped between 1980 and the third quarter of 1987 from 65.6 percent to 64.2 percent. This might not be surprising, except that California's per capita income has always outpaced national averages and has jumped by about half just since 1980.

Prop. 13's most perverse effect, given its stated purpose, has been to stimulate a bias toward shopping malls and hotels over housing. Again, there's nothing complicated about this. A shopping mall generates 6 percent sales taxes, and California cities get to keep 1 percent of that. Hotels are even more seductive, because cities impose their own ''transient oc-cupancy taxes,'' typically 6 to 10 percent of a room charge. Those funds go entirely into city coffers.

New residents, by contrast, bring traffic, crowding and comparatively little revenue. And people are demanding. They want schools, libraries, police protection, child care.

Thus it's no coincidence that California is now ablaze with ballot-box initiatives to slow or stop new housing. Dozens of local measures have come on the books in the last two years; on this month's primary ballot alone, 13 measures appeared that were aimed at controlling growth; 7 of them passed.

Yet many of these new initiatives imposed no comparable limits on commercial or industrial building. According to one recent study, the metropolitan area surrounding San Jose generated 24,000 new jobs in 1986 and 1987. But only 7,500 homes were built. Likewise, in the greater Oakland area there were 45,000 new jobs, but only 17,800 new homes. Though there is no nationwide standard on the desirable ratio of jobs to housing, clearly something is out of kilter here.

The most obscene case of seeking only the most lucrative form of development comes up in tiny, wealthy Indian Wells, a residential community near Palm Springs. City fathers there want to boost tourist trade with a 640-acre hotel/retail complex - 4,500 hotel rooms, a 400,000-square-foot convention center, two golf courses and 100,000 square feet of shops and restaurants.

And what about the people who will clean the hotel rooms, caddy for the golfers and punch the cash registers? State law requires the city to channel some of the tax revenue from this project into low- and moderate-income housing. But Indian Wells can't seem to find the space. Instead, it modestly proposed to build the housing in Palm Desert or Rancho Morales. These neighboring cities, of course, don't want it either, and both have responded by suing Indian Wells.

In time, the twisted legacy of Proposition 13 could leave us with yet another novel idea from the nation's trendiest state: apartheid, California-style.

http://query.nytimes.com/gst/fullpage.html...mp;pagewanted=2

[DEDixon 39]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

Yeap, California has a country load of illegals who do not speak English going to its schools. For the students that have managed to learn English, they have parents at home who can't guide them in school as well for they have very little education and don't speak English.

The left complains about school while inviting illegals in to tear down to quality... great plan. Dollars toward education won't fix irresponsible parents.... both the legal parents and the illegal parents.

So California's deficit problems are because of illegal immigrants and irresponsible parents?

You were not talking about the deficit, you were talking about the quality of school. Your response is off-topic (not off the original topic, but off the topic of what I replied to).

If you are going to play... play fair please.

[one...two...tree 2,762]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

Yeap, California has a country load of illegals who do not speak English going to its schools. For the students that have managed to learn English, they have parents at home who can't guide them in school as well for they have very little education and don't speak English.

The left complains about school while inviting illegals in to tear down to quality... great plan. Dollars toward education won't fix irresponsible parents.... both the legal parents and the illegal parents.

So California's deficit problems are because of illegal immigrants and irresponsible parents?

You were not talking about the deficit, you were talking about the quality of school. Your response is off-topic (not off the original topic, but off the topic of what I replied to).

If you are going to play... play fair please.

So what do you blame for California's deficit problems? None of the above explanations as to the consequences of Prop 13 convince you that it is a failed tax policy?

[DEDixon 39]

Mister Fancy said: My personal take: It’s been a disaster for the state and remains grossly unfair. There’s simply no justifiable reason that I pay 10 times the property tax as my neighbor (which I do). But more on my thoughts later.

That isn't unfair. You just haven't lived in your home as long, when you have, you'll get the same benefit. It is only unfair if you would never be able to get the same benefit. Your choice to move or stay whether it be to take another job or just to move into a different neighborhood. Regardless, the benefit is there for you if you are willing to do the time.

[one...two...tree 2,762]

Mister Fancy said: My personal take: It's been a disaster for the state and remains grossly unfair. There's simply no justifiable reason that I pay 10 times the property tax as my neighbor (which I do). But more on my thoughts later.

That isn't unfair. You just haven't lived in your home as long, when you have, you'll get the same benefit. It is only unfair if you would never be able to get the same benefit. Your choice to move or stay whether it be to take another job or just to move into a different neighborhood. Regardless, the benefit is there for you if you are willing to do the time.

Post 26

just one caveat...(you don't have an issue with this?)

The biggest beneficiaries of Prop. 13 were not homeowners but businesses. The law curtailed assessments on all property, not just homes, and there is considerably more commercial property than residential. According to the sociologist Clarence Lo, author of a forthcoming book on tax revolts, California homeowners received just one-third of total tax relief in the first five years under Prop. 13. A whopping 57 percent of benefits went to owners of commercial and industrial property.