How California's Fiscal Woes Began: A Crisis 30 Years in the Making

[nmnita]

Originally Posted by jkanderson521

Again, Prop 13 is good when it protects grandma and families from being thrown out of their homes.

It should not be helping speculators, landlords, and The Irvine Company subsidize their profit margin at taxpayer expense.

Spending absolutely needs to be reduced, but Prop 13 needs some fixing as well

I can assure you had we stayed in California our house (the last one we owned) even in todays market would be worth about a mil, but it would take 1/2 of our retirement income to pay the taxes if it wasn't for prop 13. We have a couple of friends that recently lost their husbands and need to downsize. Both cases the homes are too big for the widows and there needs to be upgrades done. Both cases they can not afford to sell and move into, say a condo, because the taxes and fees would be more than they could handle. Both of course have decent property taxes because of 13.

Nita

[antibes]

Originally Posted by jkanderson521

Again, Prop 13 is good when it protects grandma and families from being thrown out of their homes.

It should not be helping speculators, landlords, and The Irvine Company subsidize their profit margin at taxpayer expense.

Spending absolutely needs to be reduced, but Prop 13 needs some fixing as well

Whats your opinion about prop 13? Whats the positives and the negatives?

[jkanderson521]

Originally Posted by antibes

Whats your opinion about prop 13? Whats the positives and the negatives?

Prop 13 Positives:
Keeps property tax stable for people who are going to live in their home for a long time

Can build community stability by accomplishing above

Keeps gov't in check by limiting ability to increase taxes on private property.

Negatives:
Creates inefficient real estate market where there is a disincentive to sell in order to keep tax base, thus shifting burden to young families and other new entrants which negatively impacts the community in the long run by artificially driving up home prices (witness the state of CA RE today) and drives away human capital.

Benefits speculators by giving them the same tax protection as a primary residence (families who buy a home to live in), thus creating a profit subsidy for landlords and wealthy speculators. Prop 13 should only apply to primary residences, it doesn't.
Allows generational transfer of tax basis which creates further inefficiencies in the marketplace and ultimately creates a form of "landed gentry" and hollows out the economy in the long run as business flee high cost of living areas and newer workers and talent flee to areas that provide better opportunities, thus with the flight of educated talent, you are left with the wealthy, "landed gentry", and the service class. Not a formula for long term prosperity.

Others will have more, but that is a start. I am pro business, but really have a hard time with subsidizing profit at taxpayer expense, especially for a NON-PRODUCTIVE asset class like real estate, which creates no new actual wealth, since property remains essentially unchanged once improvements are made.

If you need subsidies for building business, please, let it be in areas like R&D, technology, manufacturing, etc, not things that produce no new wealth.

[Ultrarunner]

Originally Posted by jkanderson521

Prop 13 Positives:
Keeps property tax stable for people who are going to live in their home for a long time

Can build community stability by accomplishing above

Keeps gov't in check by limiting ability to increase taxes on private property..

I would say it keeps property taxes predictable... my property taxes on my previous home were about double when I sold it... not stable, but about half as much as some one paying 3 times what I paid.

Originally Posted by jkanderson521

Negatives:
Creates inefficient real estate market where there is a disincentive to sell in order to keep tax base, thus shifting burden to young families and other new entrants which negatively impacts the community in the long run by artificially driving up home prices (witness the state of CA RE today) and drives away human capital..

True, there are some disincentives in selling... I do know a few that feel as if they are being held hostage in Oakland CA because they could not buy another home outside the area without having to pay a lot more in taxes.

Seniors can sell and move in the same county and retain their tax base and a few counties still have reciprocal agreements.

Originally Posted by jkanderson521

Benefits speculators by giving them the same tax protection as a primary residence (families who buy a home to live in), thus creating a profit subsidy for landlords and wealthy speculators. Prop 13 should only apply to primary residences, it doesn't..

Renters also benefit from Prop 13 evidenced that Prop 13 only passed with the help of renters... when you get down to it... renters are paying property tax through a intermediary... directly or indirectly, renters pay property tax.

Also, business has no vote... no matter how many millions of dollars are spent... only registered voters can vote on voting day.

Originally Posted by jkanderson521

Allows generational transfer of tax basis which creates further inefficiencies in the marketplace and ultimately creates a form of "landed gentry" and hollows out the economy in the long run as business flee high cost of living areas and newer workers and talent flee to areas that provide better opportunities, thus with the flight of educated talent, you are left with the wealthy, "landed gentry", and the service class. Not a formula for long term prosperity..

This is completely false... Prop 13 does no such thing. An additional Prop after Prop 13 provided limited Parent/Child or Grandparent/Child when parents are deceased, ability to transfer the tax base... once again THIS IS NOT PROP 13.

Originally Posted by jkanderson521

Others will have more, but that is a start. I am pro business, but really have a hard time with subsidizing profit at taxpayer expense, especially for a NON-PRODUCTIVE asset class like real estate, which creates no new actual wealth, since property remains essentially unchanged once improvements are made. .

Maybe in newer communities... I live in Oakland CA and an entire industry has evolved renovating 1920's bungalows here and in places like Berkeley... Oakland also charges a high Gross Receipts Tax on Rental Properties in addition to special licensing at additional costs...

Originally Posted by jkanderson521

If you need subsidies for building business, please, let it be in areas like R&D, technology, manufacturing, etc, not things that produce no new wealth.

Oakland was/is subsidizing home ownership with low income buyer programs, goverment employee down payment assistance and even HUD has a path to home ownership where a portion of rent subsidy can go towards a mortage.

If you think having a neighborhood of long time home owners is bad... just try living in the same neighborhood with a couple of abandoned homes on every block... just the added expense of law enforcement and crime make me glad my neighbors can afford to stay... it's fine to say the property owners need to be held accountable... but when the city owns the property... all bets are off.

You want to really help communities... how about requiring Public Employees to actually live in the community where employed? Keeps tax dollars local, keeps employees focused on community issues, builds a sense of responsibility and allows for participation in civic events... I know many Oakland Police Officers and Fire Fighters and not a single one I know lives in the city... wow, what a concept...

[nmnita]

Originally Posted by Ultrarunner

I would say it keeps property taxes predictable... my property taxes on my previous home were about double when I sold it... not stable, but about half as much as some one paying 3 times what I paid.


True, there are some disincentives in selling... I do know a few that feel as if they are being held hostage in Oakland CA because they could not buy another home outside the area without having to pay a lot more in taxes.

Seniors can sell and move in the same county and retain their tax base and a few counties still have reciprocal agreements.


Renters also benefit from Prop 13 evidenced that Prop 13 only passed with the help of renters... when you get down to it... renters are paying property tax through a intermediary... directly or indirectly, renters pay property tax.

Also, business has no vote... no matter how many millions of dollars are spent... only registered voters can vote on voting day.


This is completely false... Prop 13 does no such thing. An additional Prop after Prop 13 provided limited Parent/Child or Grandparent/Child when parents are deceased, ability to transfer the tax base... once again THIS IS NOT PROP 13.


Maybe in newer communities... I live in Oakland CA and an entire industry has evolved renovating 1920's bungalows here and in places like Berkeley... Oakland also charges a high Gross Receipts Tax on Rental Properties in addition to special licensing at additional costs...


Oakland was/is subsidizing home ownership with low income buyer programs, goverment employee down payment assistance and even HUD has a path to home ownership where a portion of rent subsidy can go towards a mortage.

If you think having a neighborhood of long time home owners is bad... just try living in the same neighborhood with a couple of abandoned homes on every block... just the added expense of law enforcement and crime make me glad my neighbors can afford to stay... it's fine to say the property owners need to be held accountable... but when the city owns the property... all bets are off.

You want to really help communities... how about requiring Public Employees to actually live in the community where employed? Keeps tax dollars local, keeps employees focused on community issues, builds a sense of responsibility and allows for participation in civic events... I know many Oakland Police Officers and Fire Fighters and not a single one I know lives in the city... wow, what a concept...

For many years Los Angeles City employees did have to live in the city of L.a. that changed in the 50s. as the burb spraw started.

Nita

[Ultrarunner]

Originally Posted by nmnita

For many years Los Angeles City employees did have to live in the city of L.a. that changed in the 50s. as the burb spraw started.

Nita

Funny thing is the my city gives a few bonus points to city residents applying for a city job...

the Police and Fire Union made such a fuss that resident preference points are NOT allowed for Police and Firefighter applicants...

Strange, because these are the very people I would want living in my city...

Growing-up we always had a police officer in the neighborhood and everyone knew it when it would occasionally take his on-duty break at home... it was a great deterrent to neighborhood crime.

As a tax-payer, I think Police and Firefighter Unions have too much control and even simple reforms are met with fierce resistance...

California's fiscal woes stem from a combination of many factors...

I think the only chance is for things to get so bad that doing nothing will no longer be an option...