Is Prop 13 ruining the quality of SF life, and Ca., too?? (San Francisco: middle-class, sales)

[jackbarry99]

Hello, All.

I have come to feel that Prop 13, the JarvisGann Initiative of 1978... is ruining the quality of life in California.

Prop 13 pegs the property tax at 1% of the purchase price, plus a little bit for local "add ons"... (it is now up to 1.19% in S.F.
With each passing year it increases 2%.. Example: You buy a condo for $100,000, and your first year tax is $1,000, roughly.. Your second year is $1,020. (up 2%)

Cool...on the surface... But the long term effects are enormous...

You keep the place for 30 years, and you are paying about 10% of what the new owner would pay, if you sold today...

GRRREAT..you say, but, look at how ragged SF's parks and streets are getting, for example. Look at how little the public schools are funded, compared to other states...

In Cambridge, Mass., for example, the funding, per child, per year,....is MORE than twice what it is in San Francisco..

Is that smart, on the grand scale, for all of society? Is it not a terrible deal for the users of public schools, for the teachers, and so on.???

Here's the kicker: My wife and I bought a condo-townhouse for our Harvard graduate student daughter, last year. .... On a purchase price of $440,000, our property tax is $1,825 per year, with the "owner-occupier" credit...
Here, in SF, the prop. tax, on the same price, would be $5,236. per year.!!!!

The Mass. approach gives us a BIG discount, as "owner-occupiers". ($1,600)

It is better, I think, than the Cal. way, in that your taxes are not "Frozen in" at your original purchase price+2% bump up per year...
If you buy, there,..... you, ....over 30 years, will be around 35%-40% of you would pay here, initially, AND for each succeeding year. You pay less than here, at the start, but you pay that same %, more or less, for each year, and every year....

Here, I know many folks who say "I will NEVER sell and lose my real low tax bill", just as many renters say "I will never move and lose my real low rent-controlled rent...

I think that "Rent Control", in the larger view, is a bad deal, and, equally, I think that "JarvisGannProp13" is ruining California, and ruining public schools.

[Tallysmom]

Originally Posted by jackbarry99

Hello, All.

I have come to feel that Prop 13, the JarvisGann Initiative of 1978... is ruining the quality of life in California.

Prop 13 pegs the property tax at 1% of the purchase price, plus a little bit for local "add ons"... (it is now up to 1.19% in S.F.
With each passing year it increases 2%.. Example: You buy a condo for $100,000, and your first year tax is $1,000, roughly.. Your second year is $1,020. (up 2%)

Cool...on the surface... But the long term effects are enormous...

You keep the place for 30 years, and you are paying about 10% of what the new owner would pay, if you sold today...

GRRREAT..you say, but, look at how ragged SF's parks and streets are getting, for example. Look at how little the public schools are funded, compared to other states...

In Cambridge, Mass., for example, the funding, per child, per year,....is MORE than twice what it is in San Francisco..

Is that smart, on the grand scale, for all of society? Is it not a terrible deal for the users of public schools, for the teachers, and so on.???

Here's the kicker: My wife and I bought a condo-townhouse for our Harvard graduate student daughter, last year. .... On a purchase price of $440,000, our property tax is $1,825 per year, with the "owner-occupier" credit...
Here, in SF, the prop. tax, on the same price, would be $5,236. per year.!!!!

The Mass. approach gives us a BIG discount, as "owner-occupiers". ($1,600)

It is better, I think, than the Cal. way, in that your taxes are not "Frozen in" at your original purchase price+2% bump up per year...
If you buy, there,..... you, ....over 30 years, will be around 35%-40% of you would pay here, initially, AND for each succeeding year. You pay less than here, at the start, but you pay that same %, more or less, for each year, and every year....

Here, I know many folks who say "I will NEVER sell and lose my real low tax bill", just as many renters say "I will never move and lose my real low rent-controlled rent...

I think that "Rent Control", in the larger view, is a bad deal, and, equally, I think that "JarvisGannProp13" is ruining California, and ruining public schools.

I don't disagree with you here at all -- our schools in bad shape, too. the problem is that when you start talking taxes people flip out. In our country we have a huge sense of entitlement that we should have great roads and parks and schools and not pay for them. Our politicians run on no new taxes, and win on cutting taxes and short term it's great but we can't run our country on bond issues and credit --- but we do.

I almost think it's human nature -- at the condo complex I clean, the board ran a contest on cost cutting -- and NO ONE came up with cost cutting suggestions. They came up with suggestions on how to spend more money...

[sonarrat]

Absolutely. The decline has been precipitous, especially in the past few years as costs have spiked and we haven't been able to collect from long-term residents or even businesses to keep up. And it probably won't start to pick up again until the oldest beneficiaries of Prop 13 start to die, inherited properties are sold, and so a greater number of residents will be paying market rates for property taxes.

[Ultrarunner]

I firmly believe out of control spending is ruining the quality of life in California. Revenue has certainly increased since Prop 13's 1978 passage.

Don't forget the thousands of Californians fleeing to nearby States... none of which have all the taxes Californians pay...

For example, no State Sales Tax in Oregon; no Individual Income Tax in Washington. I know an elderly gentleman that moved to Nevada because his estate would have much more favorable tax treatment there.

Prop 13 only sets the base rate at 1% plus voter approved extras. In my city the property tax bill is near 1.5% on the last home I purchased.

Voters always have the option to tax themselves more at the ballot box... and they often do... at least that is why my city at 1.5% is almost 50% more than prop 13's 1%.

I don't ever want to return to the pre Prop 13 days where Property Owners where afraid to open their tax bills not having any idea what to expect...

Prop 13 ended Property Tax Roulette where the House always wins...

[hsw]

Doubt it...

CA's larger issues are its high state income taxes vs peers (IL, CT and even NY)...

Housing costs are generally much lower in upscale NYC and Chicago suburbs vs comparable suburbs in SiliconValley or LA's Westside, so prop tax issue is fairly trivial....

Given the gruesome economy, falling home values and decreased tax revenues, expect higher taxes on the few generous taxpayers in coming months...someone needs to pay for mistakes of others...

Most education-focused middle-class families in urban regions across US tend to live in suburbs, not cities, anyway, for safer settings and schools w/non-violent kids who actually attend school to gain an education and job-relevant skills...

Most supposedly "good" public and private schools are fairly lame anyway....failing to generate many National Merit Scholars and/or kids who attend leading colleges like Stanford or Harvard or Wharton....one could easily question the value of either one's tax dollars in case of public schools...or value of one's $30K+/yr/kid private school spending....

[Ultrarunner]

Home owners do not necessarily loose their Prop 13 base when moving.

There are several provisions allowing seniors to keep their assessment as long as they stay within their county or move to a county that reciprocates.

Remember... at one time the CA Home Owner Tax exemption of $7000 off of assessed value meant something when one could buy a home for 10 to 20k.

The $7000 home owner exemption amounts for a little more than a 1 to 2% reduction in recent markets.

The homeowner 30 years in the same original home without adding or enlarging is paying 15 to 20% of what a new buyer would pay in my experience. Thirty-year Homeowners also tend not to have children in public schools.

I bought a home from a 50-year home owner that was paying $1200 per year for which I pay $9000. I don't begrudge him one bit and I knew what I was getting into because of Prop 13.

Make the CA Homeowner Exemption meaningful again (Back to 50% of median home sale price) and I could see your point.

[NYSD1995]

In my opinion prop 13 is the biggest culprit for the deterioration of California's infrastructure, but not the only one.

[humboldtrat]

Why NOW??? Prop 13 was passed 30 years ago.

Maybe the problem is government (city, county, state) spending probably about 60% of thier revenue for employee salaries, as well as nice health and pension benefits that many of us will never see. Vallejo filed for bankruptcy because 75% of their revenue was going to pay 6-figure salaries to many city employees, leaving not too much for filling pot holes and other city services.

Another government problem is the passing of too many bond measures. A large part of the budget is going for servicing this debt - the money has to be paid back eventually. Remember that on election day.

It's true that government isn't getting much revenue from us during bad economic times. There is less property tax because houses are worth less now than a year or two ago. The state is collecting less sales tax because people are buying less; less capital gains tax because the stock market is tanking and less income tax because more people are unemployed.

How do they get along in Florida, Texas or Nevada - states that have no state income tax?? Or Oregon and a few other states that have no sales tax??

[NewToCA]

Rather than blame Prop 13, I'd like to start any discussion with the per capita tax payment to California against the tax "efforts" of other states:

TAX BURDEN BY STATE

http://www.statemaster.com/graph/eco...tal-tax-burden


Looks pretty high to me.

[barryhussein]

I think Prop 13 is a good thing. There is a great article about it on Wikipedia
California Proposition 13 (1978) - Wikipedia, the free encyclopedia Prop 13 stabilizes neighborhoods and prevents local governments from mushrooming during RE booms. People 55 and over can take their "basis" with them if they want to move, which is also fair. How about these people in New Jersey that have been taxed out of their homes. People, who live on SS, and their kids are gone. Sooner or later, Californians will realize that it is indeed a global economy. To compete in a global economy, costs must be minimized. Otherwise, no trabajos, and then, even less tax revenue.

Two years ago, in Hong Kong, they cut the liquor tax in half. It was such a success, that this year they did away with it completely. Now a whole cottage industry has sprung up, creating thousands of new jobs, as Europeans are packing up their wine collections and moving them to Hong Kong. They are even converting old army bunkers into high end wine warehouses. The restaurant business has taken off.

The schools ARE hurting. Why? There are too many school employees, who are not involved in teaching. Billions of Dollars in Bond referendums are unnecessary, when a pine paddle would be more effective.

A safety net is one thing, but a mattress in a crack house is a whole different matter.