Has Proposition 13 benefitted or harmed California thus far? (foreclosures, rental)

[Ultrarunner]

Originally Posted by Charles

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

Interesting article... it would have been nice if the author had mentioned that while Property Tax Statewide is 1%... local districts can and do collect additional assessments... my tax bill is close to 1.4%

I'm not aware of any property in the State paying only the 1% rate...

Also, school construction funding only requires a 55% vote to implement and a 2/3 voter approval to raise other taxes... my city has a history of passing most measures on the ballot.

[AlwaysLooking]

Originally Posted by Charles

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

I'll add these for a different perspective Blame the Unions & The Albany-Trenton-Sacramento Disease

[Charles]

Originally Posted by Ultrarunner

Interesting article... it would have been nice if the author had mentioned that while Property Tax Statewide is 1%... local districts can and do collect additional assessments... my tax bill is close to 1.4%

I'm not aware of any property in the State paying only the 1% rate...

Also, school construction funding only requires a 55% vote to implement and a 2/3 voter approval to raise other taxes... my city has a history of passing most measures on the ballot.

In Huntsville we pay 0.58%. or about half of California. So on a really nice $200K home (and that would get you a really nice home), that's about $1200 tax dollars a year.

But it shows in some ways, less eye appealing landscaping and hardscaping in public areas, less sidewalks, no bikelanes, roads aren't widened to meet demand, etc. Per pupil spending is higher though. Neighborhoods that look good have HOAs that provide those eye appealing amenities.

[1AngryTaxPayer]

Originally Posted by Ultrarunner

Proposition 13 is not a policy decision.

Proposition 13 came about because nearly 2/3 of the electorate came together to stabilize property taxes and rein in out of control tax increases after years of legislative inaction. Prop 13 is and was a Grass Roots Initiative.

At one time, California's Home Owner Tax Exemption was meaningful.. it protected a portion of one's home from taxation. I believe Proposition 13 would never had come into being if the Home Owner Exemption had been indexed to housing prices instead of regulated to near obscurity.

Since it's inception in 1978, Prop 13 continues to provide Property Tax predictability. State Property Tax is set at 1% of value at the time of transfer and yearly increases are limited to 2%... It matters not if you bought your home last week or 25 years ago... the formula is the same... every Home Owner benefits by limiting tax increases.

Prop 13 also requires a 2/3 legislative vote to increase state taxes... protecting all taxpayers.

City and Counties can and do tax in excess of the State 1% with voter approval... my city has an effective tax rate of around 1.4%

Can you imagine what taxes in California would be it Prop 13 had never been enacted? Don't forget that California is also a leader in collection Sales and Income Taxes... unlike neighboring States.

I would not want to return to the old days where property owners were at the mercy of tax collectors each year depending on the Assessor's "Fair Opinion of Value"... each year home owner's in mass would petition to appeal inflated assessments only to have to repeat the process all over again the following year.

Despite what many believe... total property tax revenues have continued to increase almost every year exceeding the rate of inflation.

Many of those questioning Prop 13 really should take a look back to learn the hows and whys nearly 2/3 of California Voters came together and sent Government a message that has since been adopted in other states.

The Real Value of Prop 13 in addition to requiring a 2/3 vote to increase taxes in most cases is that it provides Real Protection against being taxed on "Paper Profits". Home owner's can't pay their taxes with paper profits so why should Paper Profit be used as the basis to increase their taxes?

Without 13 how many people that are retired would be forced to rent or live with relatives? Those skinny pensions and SS benefits would not have covered property taxes from 2000 - 2006.

[Ludachris]

Originally Posted by 1AngryTaxPayer

Without 13 how many people that are retired would be forced to rent or live with relatives? Those skinny pensions and SS benefits would not have covered property taxes from 2000 - 2006.

At least some people were protected. The rest of the citizenship get reamed to make up for those who are protected. The corporations who own commercial properties are making out like bandits because of 13. Think how much revenue is left on the table without even raising taxes for the seniors. Why not modify it to keep some level of protection for seniors, but make everyone else who is benefiting share the pain a little more?

[Greenchili]

Originally Posted by nmnita

I do not believe it harmed California one bit, what is killing the state is over spending.....and too much welfare, plus over-priced real estate to be mention a few things...What California isn't getting in property taxes they are getting in every other kind of taxes...

Nita

EXACTLY!!!!!!!!!

[BennyPhoenix]

Originally Posted by Ludachris

At least some people were protected. The rest of the citizenship get reamed to make up for those who are protected. The corporations who own commercial properties are making out like bandits because of 13. Think how much revenue is left on the table without even raising taxes for the seniors. Why not modify it to keep some level of protection for seniors, but make everyone else who is benefiting share the pain a little more?

You obviously dont know commercial real estate. The corps aren't making out like bandits. In most cases businesses that rent commercial space pay the property tax. So all those little ma and pa businesses, medium and large businesses would be the ones paying; and guess who they pass those expenses on to?

[majoun]

Originally Posted by 1AngryTaxPayer

Without 13 how many people that are retired would be forced to rent or live with relatives? Those skinny pensions and SS benefits would not have covered property taxes from 2000 - 2006.

Without 13 there would probably not have been any housing bubble as property values would be lower and more stable, so there would not have been a problem.

[Ultrarunner]

Originally Posted by Ludachris

At least some people were protected. The rest of the citizenship get reamed to make up for those who are protected. The corporations who own commercial properties are making out like bandits because of 13. Think how much revenue is left on the table without even raising taxes for the seniors. Why not modify it to keep some level of protection for seniors, but make everyone else who is benefiting share the pain a little more?

Prop 13 applies equally to all private property in CA... if Prop 13 would have treated some property different than others it most likely would have been thrown out...

Each and every property is subject to the same rules and receives the same protection....

I bought a home 2 years ago and have Prop 13 protection just like my neighbors that bought 30 years ago.

The only difference, not really a difference, is that Prop 13 requires property to be reassessed upon transfer... which generally is when sold.

If someone paid 500k for a home in the same neighborhood as someone that paid only pad 250k... each person would pay a different amount of tax based on their purchase price plus an additional 2% added each year for inflation...

Kind of like buying a car... my neighbor has a classic mustang that he bought new back in 1966 and pays next to nothing for his license. I bought the identical 66 Mustang recently and pay 10 times what he is paying because I paid 10 times more.

Why should someone not buying be penalized through higher taxes because another is willing to pay a big price today?

[Ultrarunner]

Originally Posted by majoun

Without 13 there would probably not have been any housing bubble as property values would be lower and more stable, so there would not have been a problem.

I doubt it...

Otherwise property would have seen dramatic increase in the 30 years Prop 13 has been law and not just part of this decade.

An argument could be made without easy lending there probably would not have been a housing bubble because people would not have had the money...

Don't forget that there was a buying frenzy, at least in my area. So many were buying solely because they believed property would only cost more tomorrow and today's high price will be tomorrow's bargain.