Proposition 13 and how it has affected California (Berkeley, Tulare: real estate market, apartments)

[yeahthatguy]

Originally Posted by tickyul

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

Hear Hear !

[Oerdin]

Originally Posted by KC6ZLV

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.

Not even close to true. As a percentage of GDP the states with the largest budget deficits are mostly midwestern and southern states. Yes, in absolute terms large states like NY, IL, and CA have the largest deficits but as percentages of GDP they're mostly at manageable levels and are due to the fact that those states rely more on taxes which are hugely dependent on the state of the economy such as state income taxes. That means their revenue source is uneven and in good years revenue booms while in bad years it dries up to almost nothing.

Basing things like city or county income on property taxes is much better because such revenue tends to be rock solid and even a 5% variance is considered to be a massive swing. Since prop 13 kicked the financial legs out of local government they're now forced to beg the state government for money which means instead of mostly being self reliant on income they can have their income slashed when ever the state level government gets into a pinch.

[Oerdin]

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.

They will if they can but the hard truth is, especially in a down economy, large numbers of businesses simply don't have pricing power due to competition. This has been a huge issue for several years now with companies being forced to accept reduced profit margins simply because they lack the pricing power to pass costs on to consumers.

[Oerdin]

Originally Posted by tickyul

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

That's part of it but anyone who makes such sweeping statements normally doesn't know a damn thing about what he is talking about.

Here's a fact for you. In 1960 California spent the most money per student on education and it had the best education system in the country; today we spend 49th and we have the 46th place in education. Yes, molly, spending does matter and while money doesn't guarantee success not having money almost certainly assures failure. Sure, we need more responsible parents and kids who care about learning (who would ever say other wise?) but if kids are packed 65 to a class room (as is now the norm in large urban school districts), there is no teacher's aid, there are no remedial classes much less advanced placement classes offered, nor money for classes needed for a well rounded education... Well, then you've set the stage for failure even if both the kid and the parent are deeply involved and value education.

[MtnSurfer]

Originally Posted by Oerdin

They will if they can but the hard truth is, especially in a down economy, large numbers of businesses simply don't have pricing power due to competition. This has been a huge issue for several years now with companies being forced to accept reduced profit margins simply because they lack the pricing power to pass costs on to consumers.

Agreed, perfect case in point are the Barnes an Noble and Borders Bookstores. They are getting killed by the online competition from places like Amazon. And I'm not just talking books. Many goods and products from shampoo to tires to outdoor equipment to high end electronics can be purchased online for less. Local businesses cannot always simply pass the cost on to consumers likes they used to. That is if they want to remain viable. Consumers have much more power to choose in this global economy. Bottom line is they need to share in the property tax burden with the rest of society.

Derek

[tickyul]

Originally Posted by Oerdin

That's part of it but anyone who makes such sweeping statements normally doesn't know a damn thing about what he is talking about.

Here's a fact for you. In 1960 California spent the most money per student on education and it had the best education system in the country; today we spend 49th and we have the 46th place in education. Yes, molly, spending does matter and while money doesn't guarantee success not having money almost certainly assures failure. Sure, we need more responsible parents and kids who care about learning (who would ever say other wise?) but if kids are packed 65 to a class room (as is now the norm in large urban school districts), there is no teacher's aid, there are no remedial classes much less advanced placement classes offered, nor money for classes needed for a well rounded education... Well, then you've set the stage for failure even if both the kid and the parent are deeply involved and value education.

Haha, that is funny. You see, there are many more variable that have changed since the 60's besides money. I would start pointing some out....
but...........erm........I suspect vile would come my way.

[dtran103]

Prop 13 is pretty much when California went downhill in terms of managing itself, which is not giving prop 13 complete blame. There's the "money grows on trees" initiative process, the inability of the legislature to put partisanship aside and actual run the state, the powerlessness of the governorship, the burden of public services, the list goes on.

At the same time, prop 13 costs us approximately $15 billion dollars each year. That alone would solve our current budget problems.

[KC6ZLV]

Originally Posted by Oerdin

Not even close to true. As a percentage of GDP the states with the largest budget deficits are mostly midwestern and southern states. Yes, in absolute terms large states like NY, IL, and CA have the largest deficits but as percentages of GDP they're mostly at manageable levels and are due to the fact that those states rely more on taxes which are hugely dependent on the state of the economy such as state income taxes. That means their revenue source is uneven and in good years revenue booms while in bad years it dries up to almost nothing.

Basing things like city or county income on property taxes is much better because such revenue tends to be rock solid and even a 5% variance is considered to be a massive swing. Since prop 13 kicked the financial legs out of local government they're now forced to beg the state government for money which means instead of mostly being self reliant on income they can have their income slashed when ever the state level government gets into a pinch.

GDP may be another way to look at it. I don't think spending should go up at the same rate as GDP, or revenue. That kind of thinking is one of the causes of deficits when the economy contracts.

The problem I have with using property taxes to even out revenue sources is that methodology assumes property owners have the cash on hand to pay more. When you have a bad economy people don't have extra money and anything extra they pay in taxes isn't spent elsewhere in the economy.

[jewel12]

$1300 a year ?have many money.....

[MtnSurfer]

Originally Posted by KC6ZLV

GDP may be another way to look at it. I don't think spending should go up at the same rate as GDP, or revenue. That kind of thinking is one of the causes of deficits when the economy contracts.

The problem I have with using property taxes to even out revenue sources is that methodology assumes property owners have the cash on hand to pay more. When you have a bad economy people don't have extra money and anything extra they pay in taxes isn't spent elsewhere in the economy.

This could be said for anyone or any company. Why should we tax anyone? Instead let them keep all of their money. Then through spending it they will somehow stimulate the economy and everything will be magically fixed as it should be. Unfortunately this line of thinking doesn't take into account the reality of a state deficit that is on the brink of crushing our economy. It doesn't address the budget at hand. It costs money to keep teachers, schools, firefighters, police, caltrans, state parks, etc... working. If we don't pay down the debt soon huge sums of money will continue being flushed down the toilet in interest payments alone.

I'm not saying tax and spend is the answer either. The answer isn't in the extremes. Rather there has to be rational, non-partisan approach to both. We have to carefully examine everything - both sides of the house, not just spending or taxation. Take a hard look at Gov't waste, excess spending, tax abuse/evasion, etc... Until then we're just playing politics like Washington is right now. Both sides have be willing to make sacrifices. Unfortunately very few are willing to look honestly at all the issues vs. through the same old party line glasses. Its the same rhetoric and ideologues which only creates deadlock vs. solutions.

Derek