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The thing is there are many facets to Prop 13, some of which are better than others. So the answer may not be a simple black and white solution - like repeal it vs. leave it exactly the same as it has always has been. Although forum discussions tend to go this way, more knee jerk, one extreme or the other. Ultimately there could be a reform of Prop 13 without completely repealing it. For example there are many known loopholes on the commercial side in which businesses fully exploit such tax law loopholes. This occurs when a commerical property changes hands yet never gets reassessed, thereby bypassing the intent of the law through it's inherent flaws. And so the commerical side could very well be addressed separately from the residential side to deal with some of these exploits and inequities.
If Prop 13 did get fully repealed there would have to be better tax laws crafted to replace it with. And this would also be harder to approve state wide. So strategically reforming it makes more sense from a legal and political point of view. And Jerry is a pretty shrewd politician. I give him credit for being willing to address such a controversial issue as Prop 13. IMO, it needs reform. The question comes down to in which parts and how much? These are areas which many lawyers and politicans will to examine, debate and discuss. Then depending on the the degree of change a vote of the people may also be required.
Derek
Prop 13 today is not the same... the voters have already made changes.
Voters believed passionately enough to lower the 2/3 requirement to 55% for School Infrastructure...
The thing that I have the most trouble with is how some simply do not understand or blame Prop 13 for every fiscal problem...
Prop 13 doesn't prevent tax increases... if it did, I wouldn't be paying 50% above my Base Rate. Just about every special assessment proposed has passed in my city... street lighting, fire suppression, public transit, libraries, parks, schools, sports stadium.
It's convenient to Blame Prop 13 when unable to successfully make your case to the voters.
The rules affecting ownership change regarding commercial property are very explicit... San Francisco is aggressive when it comes to collection... maybe other jurisdictions are asleep at the switch?
Last edited by Ultrarunner; 01-05-2011 at 11:29 PM..
The wheel does not have to be reinvented. Which states have fair property tax laws and what do such laws look like? It is not "rocket science," as "they" say . . . It just needs a common sense approach and there can be a provision for counties to defer the taxes of seniors in certain income brackets until death or sale (the income brackets should be low income so as not to burden the tax system) and eventually that money is recouped as people die. Happens every day
Many States have versions of Prop 13...
As you mentioned in a previous post... tax assistance to seniors has been suspended... this is why the authors of Prop 13 designed it as a Constitutional Amendment... to prevent legislature meddling
Prop 13 today is not the same... the voters have already made changes.
Voters believed passionately enough to lower the 2/3 requirement to 55% for School Infrastructure...
This is my point. I would find it hard to imagine that in the current economic crisis the majority of voters would not vote for some kind of reform to Prop 13 - as a minimum. The question then comes down to degrees of change, not if change will be necessary. But obviously those benefitting from low, low taxes are going to oppose it flat out, regardless of their income level. And they will come up with every argument in the book to not change a thing, as far as the parts which effect them are concerned. But there are enough Californians now who feel like they are on the shorter end of the recieving stick. So this is a great time to review everything, including the balance of power in Sacramento along with the sacred cows such as Prop 13.
While many don't agree with Jerry or his methods, you have to admit he understands politics and how the system works. So at least he has the potential to accomplish some change for the better. Whether or not he achieves this is still to be seen.
This is my point. I would find it hard to imagine that in the current economic crisis the majority of voters would not vote for some kind of reform to Prop 13 - as a minimum. The question then comes down to degrees of change, not if change will be necessary. Obviously those benefitting from low, low taxes are going to oppose it flat out, regardless of their income level. And they will come up with every argument in the book to not change a thing, at for the parts which effect them. But there are enough Californians now who feel like they are on the shorter end of the recieving stick. So this is a great time to review everything, including the balance of power in Sacramento along with the sacred cows such as Prop 13.
While many don't agree with Jerry or his methods, you have to admit he understands politics and how the system works. So at least he has the potential to accomplish some change for the better. Whether or not he achieves this is still to be seen.
Derek
I agree with your thoughts on open discussion... personally, I would be surprised if the voters did support major changes in view of the popularity Prop 13 continues to enjoy.
At the time it was passed... there were not enough property owning voters to make it law... it required and received grass roots support from non-property owners. Also, a significant amount of property tax is paid by Business and Corporations... neither of which can cast a single vote.
In general... I'm not very political... never been a Democrat of Republican.
One thing I am passionate about is the roof over my head... could be because I come from peasant stock where the belief is a person's home is their castle.
I would have been totally satisfied with indexing the Home Owner Exemption for inflation... the $7,500 exemption had real value and worth at a time when a modest home cost $12,000.
The $7,500 exemption has virtually no significance when the median home price was hovering around 600K
One of the fallacies I come across is many of my contemporaries believe eliminating Prop 13 will lower their taxes... just don't think that's in the cards.
By the same token... I fully intend to someday be one of those retired Seniors out tending my yard while being able to still afford and stay in my home because Prop 13 added some predictability to Property Taxation.
How would removing stability in taxation help provide stability in the housing market?
By preventing another housing bubble from occurring.
Do you realize how much better off California would be right now if there had been no housing bubble?
But then you admire certain European countries which have very low property taxes and very high taxes on everything else, which would not work for California. High property taxation is more justified than high taxation for anything else.
The only way and I repeat the ONLY way I would EVER agree to increase taxes or redo Prop 13 is IF and ONLY IF Jerry and the legislature were dead serious about MAJORLY reducing spending without gimmicks or sleight of hand. How to reduce spending?
1) Go after CA employers who hire undocumented workers. Fine the CEO/President/Owner $500,000 per undocumented PLUS minimum of 1 year in prison. Let the farmers and small contractors pay fair federal minimum wages AND health care to it's workers like most other employers do.
2) All CA workers salaries are frozen (no increases) until we're in the black. No hiring until we're in the black.
3) Have a major overhaul of the CA education K-12 system. Eliminate redundancy, admin, worthless new construction, and state level boards. Keep the teachers. Eliminate school based welfare (school lunches), that's what human services are for.
4) No bond propositions until we're in the black
5) Eliminate indefinite welfare where nothing is verified. Bring back the WPA if people cannot find jobs. Don't want to work on building infrastructure? Then get the boot off of welfare. I'm quite sure many on welfare can do many (but not all) jobs that current state workers do.
6) Eliminate food stamps or cards and institute COSTCO like shops for US citizens who need food and cannot afford it. These places will NOT sell booze, beer, or snacks either.
7) Immediately halt the high speed train to nowhere project NOW.
8) I'm sure I've missed a few ideas
These measures will help those who want to help themselves. If you're too lazy to feed your own kid, or want welfare to buy beer or lottery tickets, find another state.
Even then after spending cuts, raising property taxes in the worst housing market in human history (and that's no hyperbole either) is the most insane thing someone can suggest. All that will be accomplished is to make many housing tracts into instant ghettos as people abandon property in droves.
By preventing another housing bubble from occurring.
Do you realize how much better off California would be right now if there had been no housing bubble?
But then you admire certain European countries which have very low property taxes and very high taxes on everything else, which would not work for California. High property taxation is more justified than high taxation for anything else.
Using the European component (Good memory, by the way) High Property Tax is the road to serfdom... and history shows private ownership of land is responsible for the demise of the Feudal System.
As to the "Bubble" it would never have happened if the money floodgates not been opened... never happened.
We can go into the reason lax lending came about... Class Action Lawsuits on Redlining, Denying a disproportionate number of minority applicants, Banks packaging loans and selling them to avoid long term commitments, etc.
Something is fundamentally wrong when the 23 year old medical assistant can buy 3 homes, with no money down earning $14.50 an hour.
Same when the bagger at my Safeway bought 2 homes in one year, again with no money down.
Or my neighbors nephew while on an extended visit from another country was able to buy a home with no income verification and get CASH back through escrow at closing... in other words he borrowed something like 110% of the sales price and rolled everything into the loan.
All of the properties ended up in foreclosure... all the buyers walked away...
It's not surprising there was a bubble when all you needed was a heartbeat to qualify for 100% financing
Simple... no easy money... no bubbles.
PS... Yes, I realize how much better CA would be had there been no bubble... we only differ in that I believe the bubble was caused by easy money and you believe it was low taxes.
Last edited by Ultrarunner; 01-06-2011 at 01:02 AM..
It is discriminatory and not fair. On any block, there are people who owned their homes prior to 1976 paying nothing for taxes, and right next door, people paying exorbitant amounts. I know it is based on the cost of housing, duh, but it didn't take into account how much housing would be inflated.
In the 1970's I bought a house for $30k - sold the same house for $375k in the 90's, BEFORE PROPERTY VALUES WENT UP SO DRASTICALLY . . . eventually that same house sold for $790-something . . . think about it. There are still many people in that neighborhood who bought before me and bought the homes for $20-25k. Now those same homes cost in the $600-800k range. Inflation in wages does not follow ups and downs in housing bubbles, etc.
It is just wrong. Even if you look at it from the perspective of the people who bought in the early 90's, it is wrong, but if they bought prior to 1976, it is criminal.
Those people are not funding anything in CA and that is why CA is bankrupt.
Jerry Brown is a SMART MAN. He is no idiot. He will do what is right if the public wants to be smart.
Discriminatory? You made the choice to buy that house knowing what the property taxes would be.
It sounds to me like you, and a lot of other people are just crying because you think life isn't fair and other people should pay more so you feel warm an fuzzy. If you don't like it don't buy an $800,000 house. Why should someone who bought a house in for $65K in 1980 have to pay $8,000 in property taxes because people lost their minds and started paying $800,000 for houses?
Some of the posters in this thread have some goofy ideas.
First of all, raising property taxes isn't going to lower the cost of buying a house. Nobody is going to offer $200000 more for a house to save $8000 a year on property taxes (using California's 1% in comparison to a 5% rate). I know there is a correlation between housing prices and tax rates, but a correlation doesn't validate cause and effect. Furthermore, if you dig a little deeper there are fairly large differences within individual states. The American Community Survey stated the differences in home prices were greater between counties in some states than the price differences between states. This reinforces the idea that the value of real estate is about location, location, location. California is one of the most desired locations in the country.
The median property tax in California is $2860 a year. The per capita debt in California is $3,151, at 6.45% of GDP. California ranks 23rd for per capita debt. New Jersey has the highest property taxes with a median of $6,320, a per capita debt of $5,923 at 11.25% of GDP. Connecticut and Massachusetts also have higher property taxes than California and have greater per capita and GDP debt. All these states have a tax burden of roughly 11% of income, with the other three states having a higher per capita tax burden than California.
Also take note: California's median property tax of $2,860 isn't the cheapest. Depending on the source, about 15 states have lower median property taxes, primarily due to lower housing costs.
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