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What you say may make sense as far as keeping tax capped for the lifetime of the homeowner - however, allowing Prop 13 taxes to transfer to heirs is a complete non-sense and will be repealed soon - I think it's not "if"...it's "when".
I actually don't support property taxes at all and rather would see them gone completely. Or, at least having them sort of like in unorganized townships in Maine, where they keep their property taxes ridiculously low and near nominal. But if people chose to keep property tax system in place, because this is what they use to finance roads, schools, police, parks, rec facilities, support local hospitals in some places, etc - and because they want all these nice, expensive services (I personally can do without most of them)...then everyone should pay a fair share.
Everything went up in price a lot since Prop 13 had been adopted - cost of road, building construction/maintenance, all kinds of materials, police and government salaries, cost of schooling, etc. If cost of these things stayed in-line with old Prop 13 times with only small increase than I'd say it'd be fair to keep Prop 13. But costs had exploded while people who live in these communities and are using all these services are no longer paying for them. At the same time, newcomers who may not even use these services, say, they don't have or need children, not using school system - they have to pay these new inflated costs via property taxes to support old timers and heirs who're paying dimes...to have services paid by others. Not fair and quite close to feudal, aristocracy-based system, especially with inheritance part. I say Prop 13 in its current form is a goner.
Prop 13 is silent about family transfers... those are covered by other propositions that came about later... parent/child and grandparent/grandchild if the parent is deceased.
I helps one family that was not even away there was a way... Elderly and infirmed Grandmother in a pretty run down home making it on social security... Christmas in April put a new roof on the home...
Anyway... Grandma's only child was killed in Vietnam the same year her husband died of cancer... Grand Daughter never really knew her father...
I pointed out the voters made it possible for the Grand Daughter to take over the home and keep the tax base... which is about $1600... house is probably worth $250k...
I think this is exactly why Grandparent/Grandchild transfer exists... otherwise both would be Section 8 or similar...
Tax revenue has greatly exceeded anything dreamed of at the time Prop 13 became law... when I bought my home the property tax the 88 year vet was paying on the home he built in 1957 was $1200... the minute I bought the tax went to $8800... just as I expected... no surprise and I don't begrudge the vet being able to stay in the home he paid property taxes on for 45 years...
Again Prop 13 has nothing to do with inheritance...
If someone had lived in the county for 30 years....they surely had been using its services for 30 years and not 0 years like a newcomer, so your argument does not stand at all. They continue using services, which are higher cost now, while not paying for them and having someone else pick up their tab. They continue driving on the road that needs yearly repair, for example, but they have someone else pay for maintenance. The fact that they paid for yearly maintenance of this road in prior years does not change the fact that the road still needs repair this year and they keep driving on it. The fact that they paid cops' salary 5 years ago, when they lived there, to enjoy protection of law ...does not change the fact they still need police protection this year too, and it's a brand new salary that needs to be paid this year. They can't expect newcomer to pay their bill.
If that's too much...Prop 13 crowd can sell and move to the nursing home Or can find alternative funding for services, or abolish most services altogether, along with property taxes. They're not landed aristocrats who're owed these services. The tax is there to pay for services, not some due paid to the King... use services = pay your share.
Yes, these were separate decisions for transfers but right now in discussion it's very common to refer to transfers as just Prop 13 aspect, though technically they're is not - because Prop 13 rate is being transferred.
The lions share of Property Tax goes to schools... 40-50% not to mention special voter approved assessments... my 88 year old seller with a single child born in 1950 was paying for schools 45 years that his child used 8 years.
For me it was simple... I simply bought into the neighborhood... long after the assessments for drainage, street lighting, etc. were all long ago retired...
If you want to know who uses the most services it would be those that are homeless... just last week Oakland has recently spent hundreds of thousands of dollars repeatedly cleaning up one single area just outside the Home Depot... the horrible Oakland Fire Storm where 3000 homes and many lost their lives traces to a homeless camp fire...
The family unit is declining in size... schools are closing here... simply not enough kids to justify keeping all those schools open...
The streets around here often have not been paved since new... Oakland is on a 100 year schedule for residential neighborhoods... over 60 years for Moms street...
That's because many people in California don't see themselves ever being able to afford buying property due to exceptionally high housing costs and/or crushing student debt and feel that it was much easier 50 years ago. Going forward many feel that the only people that will own property are people that inherit property, highly compensated professionals, or business owners.
Housing is at an all time high in the cycle... just look back 7 years ago and there were 50+ homes in East Oakland under 100K... the heart of the SF Bay Area... know many that had nice homes that choose to walk away because rented was cheaper... plenty of not so intelligent home owners...
The buy opportunity of a lifetime was 2009-12... no need to go back 50 years...
I work with under 30 couples buying right now... mostly nurses and some are single... interest rates are at 50 year lows! Not the 15% of the 40 years ago!
My mortgage through the credit union is 2.75% fixed for 15 years...
This thread is not about overturning Prop 13. it's about closing the commercial property tax loophole.
"I was working as a staffer in the Legislature when Proposition 13 passed 40 years ago. A decade later, as director of the California Tax Reform Association, I set out to examine its impacts. Homeowners were protected, the point of the measure.
One surprising fact jumped out, emphasized in my report in 1991: business property was a huge winner, gaining massive tax reductions which had nothing to do with the reason for Proposition 13.
In the 1990’s, I participated in consensus-building discussions on how to solve California’s deepening fiscal problems. But one rule of the discussion was that reforming commercial property taxes was off the table. Later, business defeated a legislative effort to simply examine the issue, which they said would lead to split roll, as they called it.
I called it the Empire’s New Clothes.
Businesses and their representatives had good reason to avert their eyes. Companies such as Chevron, Intel and IBM were and are paying taxes based on land values from 1975. Commercial property based on ridiculously low assessed values can use loopholes and pass property on to heirs to maintain those low taxes forever.
Business knew that discussion could reach only one conclusion: there was no rational way to defend these massive tax breaks.
In the 2000s, we at the Tax Reform Association continued to document the failures in the system. We documented the abuses of the loophole-ridden law, and the shift in the property tax burden away from commercial property and on to residential property in virtually every county."
This thread is not about overturning Prop 13. it's about closing the commercial property tax loophole.
"I was working as a staffer in the Legislature when Proposition 13 passed 40 years ago. A decade later, as director of the California Tax Reform Association, I set out to examine its impacts. Homeowners were protected, the point of the measure.
One surprising fact jumped out, emphasized in my report in 1991: business property was a huge winner, gaining massive tax reductions which had nothing to do with the reason for Proposition 13.
In the 1990’s, I participated in consensus-building discussions on how to solve California’s deepening fiscal problems. But one rule of the discussion was that reforming commercial property taxes was off the table. Later, business defeated a legislative effort to simply examine the issue, which they said would lead to split roll, as they called it.
I called it the Empire’s New Clothes.
Businesses and their representatives had good reason to avert their eyes. Companies such as Chevron, Intel and IBM were and are paying taxes based on land values from 1975. Commercial property based on ridiculously low assessed values can use loopholes and pass property on to heirs to maintain those low taxes forever.
Business knew that discussion could reach only one conclusion: there was no rational way to defend these massive tax breaks.
In the 2000s, we at the Tax Reform Association continued to document the failures in the system. We documented the abuses of the loophole-ridden law, and the shift in the property tax burden away from commercial property and on to residential property in virtually every county."
It does beg the question why the legislature was deaf to the simplest fix of all... keeping the Home Owner exemption meaningful for a modest single family home as some other states do...
Elegantly simple... as all owner occupied housing is covered and those with expansive/expensive property would receive the same dollar exemption but the actual percent of savings would dwindle as value increased...
Some legislators interviewed were all too happy to pass the buck and let the voters speak... never ever imagining Prop 13 would have a chance with labor and government institutions dead set against it... Police, Fire, Nurses, Teachers, Civil Service... etc... I remember the local PTA had heated discussions and it was divisive… one of the parents stood up and said if Prop 13 passed half the schools in the district would close.
No matter how well funded those in opposition made the case... plenty of parents were upset with the State taking control of the schools through Serrano and plenty of Home Owners AND WOULD BE Home Owners were simply fed up...
It does beg the question why the legislature was deaf to the simplest fix of all... keeping the Home Owner exemption meaningful for a modest single family home as some other states do...
Exactly. And unfortunately, they didn't.
Last edited by CA4Now; 11-16-2019 at 08:45 AM..
Reason: spelling
In some form it comes down to trust and using taxpayer funds wisely...
My perspective probably is very different in that I live in Oakland CA and voters here are known for approving Special Assessments and the city more than once has ramrodded tax increases only to be forced to return them.
Could be why my support for Prop 13 is strong.
Even with Prop 13 many/most I know that are retiring often after decades in their homes are cashing out and leaving the State... at one time CA wanted to impose a source tax on my LEO friends that left CA but it was not able.
I do hope/intend to be one of those seasoned citizens with the lowest tax in the neighborhood instead of always the highest!
To a last person no child has stepped up to take Mom and Dads home when the parents leave... not a one even if they could save thousands each year on property tax because it would mean living in the East Oakland home where they grew up... instead of the newer, larger homes in over the hill in Alamo, Pleasanton, Walnut Creek, etc...
Housing is at an all time high in the cycle... just look back 7 years ago and there were 50+ homes in East Oakland under 100K... the heart of the SF Bay Area... know many that had nice homes that choose to walk away because rented was cheaper... plenty of not so intelligent home owners...
The buy opportunity of a lifetime was 2009-12... no need to go back 50 years...
I work with under 30 couples buying right now... mostly nurses and some are single... interest rates are at 50 year lows! Not the 15% of the 40 years ago!
My mortgage through the credit union is 2.75% fixed for 15 years...
You used to be so bullish on housing here. Looks like that’s over.
Sales Tax requires you buy something... Income Tax requires Income... Property Tax just happens because you are owner of record... and it was often insidious pre Prop 13...
Yes, a Property Tax is a WEALTH tax. You know - the kind of Wealth Tax Democratic candidates for President Elizabeth Warren & Bernie Sanders have made as centerpieces of their respective platforms.
You used to be so bullish on housing here. Looks like that’s over.
Housing yes... residential rentals in SF and Oakland not so much.
The industry has changed so much over the years to not be recognizable... just cause eviction, Section 8 using contract inspectors and bowing out of the damage side of things.
The last 15 or so years I have been transitioning into commercial property and find it a joy... business to business.
I still have tenants going back decades but the turning point for me was Just Cause...
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Or can find alternative funding for services, or abolish most services altogether, along with property taxes. They're not landed aristocrats who're owed these services. The tax is there to pay for services, not some due paid to the King... use services = pay your share.
