Proposition 13 and how it has affected California (school districts, income)

[KC6ZLV]

Originally Posted by CA4Now

If it makes you feel any better, median prop taxes in CA were around $2,800 in 2008. As compared to N.J. = $6,320, Conn = $4,603, N.H. = $4,501, N.Y. = $3,622, R.I. = $3,534. (Homeowners Revolt Against High Property Tax, Home Value Assessments - AARP Bulletin) So we're not as high as some of the other states.

But it isn't just the property tax that matters. It is the total revenue from all taxes. Oddly, many of the states with the higher tax burdens are having the biggest budget problems.

[DowntownVentura]

Originally Posted by Charles

The myth of Prop. 13: Debunking the myth of Prop.13 - latimes.com

Property Tax revenue has been declining because of declining property values. Counties are reassessing properties lower. New sales are coming in at lower prices.

The real problem is when property taxes were flying off the roof with the equally flying property prices, the state didn't bank the money for a rainy day or when revenues would get back to normal. They just spent spent spent. Now they are complaining they are out of money.

California has a history of spending more than they have, no matter how much they have. Any dismantling of Prop 13 will not result in a fiscally responsible state. Getting them to learn to spend what they have (or less than what they have) is the real challenge.

[Chatteress]

Originally Posted by FresnoFacts

Renters pay property tax through the amount of the rent, the property owner just passes it along.

But the state gives renters an income tax credit (the Nonrefundable Renter's Credit).

Not all renters get this credit ... I was ineligible for several years because I made too much. You have to be on the lower-income scale to be eligible.

[Malloric]

Prop 13 on residential properties... who cares. Most people don't stay in a house long enough for it to matter. Losing a few thousand dollars in revenue a few grandmothers who might otherwise be kicked out their homes, you know, I think we can afford those lost dollars.

Prop 13 wasn't passed to keep a few grannies in their home, however. It was one of the most ingenious pieces of special interest legislation. Throw a few bones to the home owners and they become staunch defenders of a corporate windfall. The effect of Prop 13 has been a monumental shift in property taxes. It used to be that most property tax was on commercial buildings. Not any longer. Now it's on residential ones. Corporations don't sell real estate, especially not valuable real estate. They like-kind exchange it, preserving the tax basis in the process.

[majoun]

Originally Posted by DowntownVentura

California has a history of spending more than they have, no matter how much they have. Any dismantling of Prop 13 will not result in a fiscally responsible state.

No one incident will change things overnight but Prop 13 is a good first step.

I would much rather have high property taxes and low taxes on everything else than the opposite. In particular, fees, fines, and sales taxes should be lower.

Getting them to learn to spend what they have (or less than what they have) is the real challenge.

Gotta start somewhere. The repeal of 13 would be a great place to start.

[MtnSurfer]

There is a big part to Prop 13 which most ppl don't even consider because they are to busy thinking about their own residential property taxes. The Commercial side is huge part of it in which many companies find loopholes to pay next to nothing for their property taxes.

In Los Angeles County homeowners paid 53% of all property taxes in 1975, but today they pay 69%. Commercial property owners have gone from 46% to 30%. In Orange County, homeowners have gone from 59% of the burden to 72%, while commercial property owners have gone from paying 40% to 27%.

One reason is that commercial property doesn't change hands as often as residential property, so it doesn't get reassessed as frequently. The other reason, Goldberg said, is that commercial property owners have exploited "huge loopholes" by transferring properties to various partnerships and affiliates and avoiding reassessment. -- LA Times: It's time to tinker with 'untouchable' Prop. 13

This sacred cow needs to be re-evaluated in the same way as union benefits and other state excesses, tax loopholes, etc...

Derek

[yeahthatguy]

Originally Posted by MtnSurfer

There is a big part to Prop 13 which most ppl are unaware of because they are thinking about their own property tax. The commercial side is huge where companies find loopholes to pay next to nothing for their property tax.


Derek

This is not by accident .. It was designed this way.. California over and over gives great incentives for companies to be here .. they allow the tax 'loopholes' and breaks on purpose.. If you build it they will come.. so the companies are getting off great by being here and you have no choice but to come here for the jobs.. Once here, California makes sure to give you the shaft 20x over.

[EscapeCalifornia]

Originally Posted by MtnSurfer

There is a big part to Prop 13 which most ppl don't even consider because they are to busy thinking about their own residential property taxes. The Commercial side is huge part of it where companies find loopholes to pay next to nothing for their property tax.


Derek

Well the mere fact that a corporation is immortal and can effectively hold a property forever should have been a clue.

Of course if property tax on business goes up, they'll just pass that on to consumers.

[yeahthatguy]

Originally Posted by EscapeCalifornia

Well the mere fact that a corporation is immortal and can effectively hold a property forever should have been a clue.

Of course if property tax on business goes up, they'll just pass that on to consumers.

Highly unlikely that will be possible going forward w/o subsequent demand destruction :


Mish's Global Economic Trend Analysis: China's Manufacturing Slowest in 9 Months, New Orders Suggest Manufacturing May Have Already Peaked; Australia Biggest GDP Drop in 20 Years

ISM - ISM Report - May 2011 Manufacturing ISM Report On Business®

Consumer Confidence Is Now Lower Than During All Recent Financial Crises And Tragedies


Local coverage : http://www.latimes.com/business/la-f...0,774718.story
Worrisome economic reports trigger big stock sell-off
Signs of slowing growth in manufacturing and in private-sector employment spook investors, sending the Dow Jones industrial average down 279.65 points, or 2.2%. That's the biggest one-day sell-off in the U.S. stock market since August.


As I stated some posts ago .. The gig is up .. in subsequent quarters you're going to see the reality of a double dip become clearer : more unemployment and lower economic activity .. IMO, high cost of living states/high tax states are going to see the impacts of such conditions on a populous that is making less and has less to spend .... and to think i just got a notice for my rent to be hiked due to the clowns introducing more parcel taxes.

This reality which I saw forming goes in my bucket of things I have been watching as for signs as to when to possibly hit the high road.

If corps don't pay the property tax.. you do .. just remember that. Things have gone beyond absurd here... I am actually hoping at this point that they do extend taxes like people seem to want in this state... as I am already most decided on that fact that I will be leaving.. therefore people can see and bare the full weight of their choices.

[tickyul]

Originally Posted by EscapeCalifornia

And in places like Santa Ana, they rent them out to multiple families with a half dozen or so kids in the local schools, all on $1000/yr in property taxes. No wonder the school suck.

Schools don't suck because of Prop 13.....they suck because some parents and kids do not VALUE education.