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Forget Parcel Tax- Repeal Prop 13!

Original post made by Courtney on Feb 2, 2010

With more budget cuts looming for our schools, isn't it about time that we revisit Prop 13? California is loosing residents at a rate higher than any other state. It has become too expensive to live here and even more expensive to move here. What started out as a well-intentioned idea, has proven to be destructive. We must begin to attack the real issues, not just put band-aids everywhere. Getting rid of Prop 13 and luring people back to the state will increase revenue. Couple that with less spending and we will be on track to stabilize the budget bleed-out. Only then will our school's be safe.

Comments (43)

Posted by Huh?, a resident of Downtown
on Feb 2, 2010 at 10:03 am

Courtney I'm on board with you as far as cutting spending and luring people (you need to lure buisinesses back, the people will follow) but how is repealing Prop 13 going to do anything but force more people to abandon homes when they can't afford their property tax bills? I know it's difficult for many to grasp the concept but you need to reduce taxes to lure people and businesses back to California. The state government and services need to be slashed.


Posted by Concerned, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 10:10 am

Back to Tax and Spend. All you will wind up doing is collapse real estate values again. In fact we need limits similar to Prop.13 on all other public sector expenditures such as schools, police fire and other city and state spending. They should be limited to inflation plus population increases. There was a limit but Gray Davis caved in to his owners (Public sector unions) and lifted the limits. We should go back to where they were in 2000 and adjust for inflation and population increase. We probably will need to cut 20-30% of all city, county and state spending. We need Prop.13 limitsfor all spending not just property tax.


Posted by resident, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 10:57 am

Granny, get your pitchfork out of the barn. They are tryin' to tax us out of our spread again and that kinda talk will lead to an uprising from the town folk.


Posted by Joe, a resident of Downtown
on Feb 2, 2010 at 11:55 am

How could you get "rid of Prop.13 and lure people back to the state to increase revenue"? Property taxes with no control would force people to flee the state and take their "revenue" with them. You might want to check out www.hjta.org for a little history and enlightment. Prop. 13 is not and has never been the problem...rampant spending, the unions, and insane pensions are what has torpedoed California. You cannot tax your way to prosperity.


Posted by Furloughed, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 12:21 pm

Huh? and Concerned are so right. We need to reduce taxes to stimulate new business activity.. (seems many don't grasp basic economic principles....usually politicians working with OPM...other people's money..and public employee unions). Most prop 13 beneficiaries are and will be dying off. . . . DEAL with TODAY's REALITY ! MOST of us are getting by on some sort of furlough ...of course, there was the option of NO JOB ! ! !
Back to the KIDS ! Jerking kids around with subs is not the solution. It's TIME for teachers to join in our very real world today...PhDs are retail checking. I'd say cut some teacher positions and cut some pay/benefits....that's what's been going on for a year in all OUR lives !... That doesn't mean 'postponing' until grabbing back with taxes & contracts later. A few more students in every class doesn't hurt. I received a great education K-12 with always 35 in every class....before unions. Unions and class reductions were started for benefit of teachers....and that benefit could be paused temporarily...if teachers won't give up 10-20% like all the rest of us were FORCED to do to keep our PROFESSIONAL jobs. And, it's OUR kids that are now NOT going to be able to go to college on schedule, but help is only for minorities..that bites.


Posted by Furloughed, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 12:21 pm

Huh? and Concerned are so right. We need to reduce taxes to stimulate new business activity.. (seems many don't grasp basic economic principles....usually politicians working with OPM...other people's money..and public employee unions). Most prop 13 beneficiaries are and will be dying off. . . . DEAL with TODAY's REALITY ! MOST of us are getting by on some sort of furlough ...of course, there was the option of NO JOB ! ! !
Back to the KIDS ! Jerking kids around with subs is not the solution. It's TIME for teachers to join in our very real world today...PhDs are retail checking. I'd say cut some teacher positions and cut some pay/benefits....that's what's been going on for a year in all OUR lives !... That doesn't mean 'postponing' until grabbing back with taxes & contracts later. A few more students in every class doesn't hurt. I received a great education K-12 with always 35 in every class....before unions. Unions and class reductions were started for benefit of teachers....and that benefit could be paused temporarily...if teachers won't give up 10-20% like all the rest of us were FORCED to do to keep our PROFESSIONAL jobs. And, it's OUR kids that are now NOT going to be able to go to college on schedule, but help is only for minorities..that bites.


Posted by Common sense, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 1:26 pm

"How could you get "rid of Prop.13 and lure people back to the state to increase revenue"? Property taxes with no control would force people to flee the state and take their "revenue" with them."

Most peoople with good incomes can afford the property taxes - sure it is nice not to pay them, but people can afford them.

The people who would be driven out of their homes because they cannot afford the new taxes (adjusted to the true value of their home rather than what they paid for it) are those in fixed incomes, many of whom are probably seniors who are the original owners from 20+ years ago.

Revenue would not be lost, most people who could not afford their true property tax are probably those who are also not paying much in income tax.

That being said, I do not think prop 13 is the problem. The biggest problem in California is the spending mentality. We have to reform the unions, reform the pension system (Davis caused a big problem for California), get rid of unnecessary expenses (county of education, many government agencies, etc).

Cut spending, then if needed we'll see about prop 13. My guess is that once we stop giving such generous pensions and stop being the welfare state, we will see that prop 13 is not the problem.


Posted by jimf01, a resident of another community
on Feb 2, 2010 at 1:28 pm

better title for this thread. Tax thee - not mee!
Us vs them. It is not a good idea to cook up new taxation schemes. It is a good idea to stop wasting the taxpayer moneys that they already confiscate.


Posted by resident, a resident of Downtown
on Feb 2, 2010 at 5:37 pm

Prop 13 for one principle residence per person is a great idea. The reason it has so devastated us is that it also applies to commercial and income producing (residential rental) properties. Those should never have been included.
When a person -- or corporation or partnership, whatever -- buys income producing property they should never be allowed to benefit by keeping the property tax at virtually the same level as long as they own the property. Yes, landlords would pass increases on in the form of rent increases. Do they not increase rents now? What would change?


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 2, 2010 at 8:18 pm

Another way to reform Prop 13 is to make the adjustments more closely track the consumer price index. Currently, increases are capped at 2%, but inflation typically averages 3.5% over long periods of time. Prop 13 creates a market distortion by encouraging people to stay put rather than "trade up" into a bigger home, or "trade down" into a smaller one. Capping the increases closer to the long term average value of consumer inflation would help remove that market bias.


Posted by Rat Turd, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 4:21 am

Another wacko comment by either a troll or truly uninformed. Can you imagine the drop in property values??? Truly a moron comment. Let's see granny you now owe 100K in property taxes.


Posted by Jeff Dormer, a resident of Del Prado
on Feb 3, 2010 at 8:32 am

Prop. 13 forces the state to rely more heavily on income tax and sales tax for general fund revenue, and those types of taxes are very volatile. Good economic times flood the state with money, and recessions cut off funding. Property taxes, while still fluctuating with real estate values, move more slowly. We can all disagree about how much revenue the state needs to fund the programs we expect in return, but I hope we can agree that STABLE funding would allow for more responsible long-range planning. Prop. 13 could never be changed overnight. It wouldn't be fair. Moving forward, though, a careful shift FROM more volatile funding sources (income and sales tax) TO more stable, predictable sources (property tax) would better allow us to responsibly sustain whatever it is we're asking our government to provide.


Posted by another resident, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 8:36 am

Eloquently stated Jeff, but I won't be voting to throw my parents out of their home anytime soon.


Posted by Gunslinger, a resident of Danville
on Feb 3, 2010 at 8:47 am

Keep in mind, the modern liberal machine hates elders, perceiving them to be nothing but racist cheapskates from an era the libs wish to erase. A common liberal meme is to speak of "a future without being held back by the older generations.". What they mean is that they can't wait until the older generations are dead and take their conservative notions with them.

That's why the libs in charge of state government and lib machinery such as teachers unions are always attacking elders

You unions wanna play hardball? You throwing out somethin to motivate your base and get people like me to come toward the middle

Hah!


Posted by Dorene, a resident of Country Fair
on Feb 3, 2010 at 8:56 am

Obviously those people, who did not live here in the early 1970's, did not experience the effect property taxes had on families before prop 13 was passed! People who could afford to live here were on the verge of losing their homes. Taxes were increasing so much every year, that average folks were in danger of losing their property. Try being a single parent working hard to provide for your Children and make ends meet. Would you have been happier, if all of those Children had to leave their schools, Friends and neighborhoods just so you could keep paying higher and higher taxes. It was out of control. I know several Families, who moved out here when cows were still in the fields. They almost lost their homes. Luckily 13 passed and they were able to stay in their communities, where they became leaders and productive citizens. They helped to mold Pleasanton into the wonderful City it is today! Don't blame prop 13 for everything. Put the blame where it belongs - with BIG government that never spends wisely, greedy politicians and some greedy people.


Posted by mooseturd, a resident of Pleasanton Valley
on Feb 3, 2010 at 9:11 am

mooseturd is a registered user.

Forget about repealing prop 13. It simply doesn't matter. California has the 15th highest residential property taxes (as percentage of income) in the nation even with Prop 13. We have the second highest personal income tax rate (top bracket). And we in Alameda County have the highest sales tax in the good old US of A.

Seems to me we spend too much.


Posted by Ngo Loon, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 9:14 am

Unfortunately we can't repeal Prop 13, because the California Legislature for decades has behaved like a bunch of drunken sailors when it comes to spending. They will spend whatever money they have and then a lot more. There is no better example than these loons trying to pass universal single-payer healthcare in California, and they admit they don't know where the money would come from to pay for it. This in a state that is teetering on bankruptcy. California's experimentation with Socialism hasn't worked, just as it hasn't worked anywhere else in the world. Unfortunately, it seems the only way to control governments is to limit their money supply. The bad part about that is they cut vital services and keep bankrolling welfare programs and earmarks.


Posted by Ngo Loon, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 9:31 am

Courtney,

You say only if Prop 13 is repealed, only then will our schools be safe. I say our schools will be safe only when we completely shut off illegal immigrantion to this country, and be much more selective about legal immigration. This state, and our country, can no longer afford the be the lifeboat for the world's impoverished masses. We are going broke.


Posted by resident, a resident of Downtown
on Feb 3, 2010 at 10:34 am

Dorene -- please skip the drama. California is the only state with this type of property tax structure and you do not see all of your "consequences" happening to everyone in all 49 other states.
Yes, MT, we have the highest average property tax rate -- ask anyone who bought a home in the past 5 years. Therin lies the problem. Taxes are WAY to low on longtime owners and WAY too high for new purchasers. A value based taxation is far more fair. Yeah, it's nice to think of all the old folks living out their years with a $200 per year property tax bill. But follow that a step further.
I have an elderly client (had, I guess, she just died) who owned a home now valued at about $800,000 with property taxes of less than $1,000 per year. She had lived virtually her entire life there. Her do-nothing 50ish daughter, who has never had a job but spends plenty on booze and drugs, just inherited that home TAX FREE and gets to keep the tax basis. How is that fair? How does that help Doreen's example families?
We need to modify prop 13 to stop these unintended consequences. We also need to revoke it for commercial properties. How many buildings have changed hands in downtown Pleasanton in the past few years? Those that have been owned for decades by the same person have property tax rates at those very, very low tax rates due to prop 13. Have those landlords lowered the rents because they have had little, if any, increase in property taxes? Yeah, right.
Prop 13 for an original owner of a principle residence is fair. Everything else is causing this state to sink in debt. Yes, I agree the excess and carefree spending HAS to stop. But we also have to get a reasonable revenue source.


Posted by Jim, a resident of Oak Hill
on Feb 3, 2010 at 11:06 am

Excellent idea. Lets cut 20% - 30% of state and local services. Just make sure it doesn't affect me.

Do you see the real problem now.


Posted by Gunslinger, a resident of Danville
on Feb 3, 2010 at 11:07 am

We have a fine revenue source. The fools in government choose to misuse it. Don't take our money, spend it on stuff we don't want, then come asking for more to spend on what you should have paid for already.


Posted by Karen, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 11:45 am

I've lived in two other states in my life and, in both places, knew of people who had to sell their homes because their properties were reassessed and their taxes went up so much that they had to sell because they couldn't afford their home anymore. In one state it was a few young couples with kids and in the other instance, it was my parents who had to move to Florida to afford their home and, let me tell you, it was a real pain in the butt having to travel so far to take care of my them and to spend time with them. So....think twice about kicking out the old folks with raising their tax rate. Also, I had no babysitting help from my parents and that was a bummer.

On another note, we have a rental home with an old tax rate which is really what helps support us. We've had the same tenants in there for 6 years and have not raised the rent (not worth the hassle - and we like them). But if the taxes went up and we did'nt make much profit, we would sell it and so would many other landlords...so...there would be a shortage of homes available to rent and...thus...higher rents.

Pick your poison.


Posted by Chuck, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 1:04 pm

Courtney, are you old enough to even remember where we were BEFORE Prop. 13? Secondly, how do you attract people BACK to CA by raising property taxes? The supposed "logic" of that totally fails me! Do we even WANT to attract people back to CA, when we are already bursting at the seams with 38M residents!!
Repeal Prop. 13? ABSOLUTELY NOT, NOT NOW OR EVER!!!!!!!!!!!!!!!!


Posted by rs, a resident of Pleasanton Valley
on Feb 3, 2010 at 4:29 pm

We have an out of control FEDERAL, STATE, COUNTY AND CITY GOVERNMENT, and you want to give them MORE POWER TO TAX US. Before prop 13, their was a 20% incease each year, who can afford that. We now have to budget our households, IT IS PAST TIME GOVERNMENT LEARNED TO LIVE WITHIN THEIR MEANS.


Posted by Courtney, a resident of Avignon
on Feb 3, 2010 at 4:48 pm

Wow! I think I touched a nerve. I should have used the word "revisit" instead of "repeal." I'm not in favor of tax increases. Because it could be argued as an unfair tax, I didn't see it as an increase. I guess your outlook changes based on when you purchased your home.

Chuck- I only recently moved to CA, so I don't remember life before Prop 13, but I do know that repealing it would not "raise" property taxes for those just moving here. In fact, property taxes would be lower for new buyers.

I get the idea of protecting homeowner's from uncontrollable increases in property taxes. Unfortunately Prop13 works on the assumption of ever rising home prices. The high taxes paid by new buyers would be reduced over time by inflation and made up for by higher taxes paid by other people when they bought at even higher prices in later years.

That's great except the housing market collapsed! There is a 40% statewide decline in prices which has required tax assessors to issue "decline-in-value" reassessments. Many doubt the property tax assessments will recover to their former level in the next decade or beyond, leaving the state less revenue and only the longer-time owners seeing any benefit to Prop 13.

Do we raise everyone's taxes to meet the current tax assessments? No. Do we find a different, more equitable, way to assess taxes, yes. Doing nothing will continue to force new buyers (who can no longer afford the taxes) to move out of their homes and possibly out of the state which leads to even less revenue and the cycle continues.

At what point do we acknowledge it might be time to find better solutions?


Posted by digitalFlack, a resident of Stoneridge
on Feb 3, 2010 at 8:19 pm



Howard Jarivs did a red herring flim-flam on the taxpayers. He argued that due to run away state services, Californians were constantly getting taxes increase that they couldn't afford, especially the elderly faced with rising real estate taxes.

He put nothing in Prop 13 to handle inflation, so even in years when inflation ran at 7%, the state was limited to a 1.1% increase in its collected tax base. Could your employer do this to you? [Trolls: Please don't reply unless you can demonstrate that you can live on a 1.1% increase on your income for at least the last fifteen years.]

He put nothing in Prop 13 to manage equitable taxing amongst property owners, for example: Three houses on my block, with mine in the center, all have similar dimensions and equal sized lots, they were all built in 1996 for $375,000. My neighbor who is the original owner pay $4,700 in real estate taxes. I bought in 2001 during the bubble and paid $680,000, so my current tax bill is $8,300. And my neighbor who bought in 2005 at the peak of the bubble for $960,000 is paying over $10,000 annually in real estate taxes. Coincidentally we each have two kids in high school and one in middle school, i.e. we get equal school services, but one owner pays $4,700, a second $8,300 and the last $10K. Today the houses are all valued by Zillow at $840,000, how is it fair that there is so much difference?

Jarvis ran the story that retired grandparents would be pushed out of their houses by rising property taxes, using defense workers houses built in the 1950's for $19,000 that had risen to million dollar cottages in towns like Palo Alto. Except Prop 13 isn't limited to retired people and there are better ways to make sure they get reduced or delayed taxation. (e.g. in some states/countries, if you can't pay the 'rates' they get tagged onto your property like a lien when you sell the property - if you are a senior, maybe no interest)

And the last major thing Jarvis didn't account for was that cities and towns with lots of churn (people moving in and out) and new housing developments would get some benefit of house prices ratcheting up with the churn (i.e. lucky Pleasanton and Tri-Valley), while school districts in low churn areas in other parts of Alameda County, do not get their tax base increased as quickly. Oh yes, pay those teachers and police less!

Prop 13 is an example of a poorly thought out proposition with a lot of unintended consequences that appeals to people who seem to want to live in a great country and state, with great schools, modern infrastructure, state of the art fire and police services and protections from swindlers like the banks and Madoff - BUT THEY DON'T WANT TO PAY FOR THEM. Reminds me of many of our kids: they want everything - cars (BMWs according to the other thread on TS), iPhones and Disneyland - but somebody else should pay for them.

The other comments above make me ask why Jarvis was trying to protect commercial property. As mentioned, it gets put into a perpetual trust and can be passed through families for generations without a tax increase. I was told (admittedly hearsay) that the family trust that owns the Domus building let it lie empty for seven or eleven years after the initial grocery closed. With their taxes set at 1973 rates... plus 1.1% why rush to improve the property or the downtown area?

Please don't bother to reply to any section of my 'rant' if you can't refute my primary complaint with Prop 13: Namely, why do three exactly the same houses have three dramatically different tax rates (like 220%) when the owners enjoy exactly the same services? There is not another state in the Union with such a stupid system.

JF


Posted by resident, a resident of Downtown
on Feb 3, 2010 at 10:05 pm

digitalFlack, you actually get it. You eloquently stated my points. Unintended consequences abound with prop 13 and until we address those this state will continue to suffer unrealistic losses of revenue.
There are so many possible fixes for these issues, but people just are not willing to see them. Seniors could have the taxes added to the property to be paid upon death, as is done with a reverse mortgage. There is just no justification at all for tax free inheritance of property with the allowance of the same tax rate. There is no reason (other than the lobbyists) that commercial property should ever have been included in prop 13 rollbacks.
I have heard the same rumor about the Domus building owners. Most of the buildings downtown are owned by the same few people, who have owned them for decades. Prop 13 has some very good effects but so much of it is nothing but a free handout for commercial property owners.


Posted by Rick, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 10:16 pm

Hey lets continue to pay police and fireman 100k-250k to do whatever and maybe raise the teachers salary to 100k(were almost there now) and maybe janitors that work for the state should make what private computer engineers do too. We have lost are way and are paying these public sector employees way too much money. We might as well be a feudal kingdom or communist country......geez


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 10:21 pm

To Rick,

"Hey lets continue to pay police and fireman 100k-250k to do whatever and maybe raise the teachers salary ..."

This is related to Prop 13 how?


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 10:44 pm

Stacey is a registered user.

What is it that caused such a voter backlash on the property taxes? These things don't get voted on inside a vacuum. Prior to Prop. 13, homeowners saw their property tax bills double in a single year due to a change in a law. California also had a revenue surplus during that time.

Incidentally, Prop. 13 was challenged in court by.... guess who? :)


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 10:58 pm

Stacey is a registered user.

"Namely, why do three exactly the same houses have three dramatically different tax rates (like 220%) when the owners enjoy exactly the same services?"

OK. The question really is, why should government get a windfall of revenue just because the runaway market speculation ramped housing prices up? Or, why should government get a windfall of revenue just because someone chose to buy a house during a bubble? The amount of fire service needed is the same. The amount of sewer service needed is the same. The amount of police service needed is the same. The number of houses aren't increasing on those properties. The average number of occupants in the houses over time isn't increasing.

Like, no really. Government gets a windfall of revenue on these things and then finds a way to spend it. If one looks at the numbers of total property tax revenue collected in California, it more than keeps up with inflation. Sure things can be more equitable to individual taxpayers, but the idea that government is suffering because revenue is being eaten away by inflation isn't reflective of reality.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:02 pm

Stacey is a registered user.

The idea of returning to a market-based assessment for property taxes as the solution to our revenue problems is missing the point. The money will just be spent and government will want to increase taxes again. That's what happens in other states. There's a complaint about about having to pay $10K on a house worth $840K. Try paying $10K on a house worth $350K back East because they just keep raising the levy. What's really needed is a fair and equitable taxation system.


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 11:06 pm

"If one looks at the numbers of total property tax revenue collected in California, it more than keeps up with inflation."

The only way it "keeps up" with inflation is by relying on growth, and over-taxing recent buyers while under-taxing less recent buyers. If property tax increases were able to more closely track the consumer price index, there would be more revenue from property taxes and there would be less government interference in the housing market. There would be less incentive to "stay put".


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:08 pm

Stacey is a registered user.

Web Link
"Highlights

* A property tax system based on acquisition value has a progressive impact on the tax structure, according to the California Policy Seminar.
* Property tax assessments prior to Proposition 13 showed wider divergences than assessment disparities under the current acquisition-value system.
* Alternatives to Proposition 13 have a variety of unwelcome effects, including substantial increases for low-income and elderly homeowners.
* 92% of elderly property owners would be negatively impacted by suggested revenue-neutral changes in Proposition 13.
* Proposed revenue-neutral changes in how property is assessed would result in tax increases of over 160 percent to 43 percent of Los Angeles County homeowners.
* Proposition 13 revenue flow has been 2.9 times more stable than pre-Proposition 13 property tax collections.
* The property tax has proven to be a stable revenue source for local governments, growing almost 10 percent per year between 1980 and 1992; even in 1992, a recession year, the annual increase was 7.9 percent.
* A 2-to-1 rejection of Proposition 167 in November 1992 suggests one alternative to the current system, a split roll, finds little favor with voters.
* Business properties already pay a proportionately higher share of the property tax than residences. Business properties are assessed at 75 percent of market value; the statewide assessment average -- including business properties -- is 55 percent.

"

And the answer to the question above regarding who first challenged Prop. 13 in court is... our very own Amador Valley Joint Union High School. The case was quoted in arguments against Prop. 8.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:09 pm

Stacey is a registered user.

Over-taxing recent buyers?! They pay the same percentage!


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:10 pm

Stacey is a registered user.

BTW, I recommend that link I pasted above. It has some good history on the background of Prop. 13.


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 11:10 pm

"The amount of fire service needed is the same. The amount of sewer service needed is the same. The amount of police service needed is the same. The number of houses aren't increasing on those properties. The average number of occupants in the houses over time isn't increasing."

So why not track the consumer price index (CPI) rather than home values? The trouble is that inflation erodes the buying power of a dollar and the limits in Prop 13 (2%) are well less than the average rate of inflation (the CPI) (3.5% - 4.5%). All those services that you named get more expensive because dollars get less valuable. So in order to buy goods and services that you named, we have to pay more each year.


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 3, 2010 at 11:12 pm

"Over-taxing recent buyers?! They pay the same percentage!"

Same percentage of what? And are you adjusting for inflation?


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:15 pm

Stacey is a registered user.

The court said, "The state legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high."


Posted by Stacey, a resident of Amberwood/Wood Meadows
on Feb 3, 2010 at 11:16 pm

Stacey is a registered user.

A reader wrote: "The trouble is that inflation erodes the buying power of a dollar and the limits in Prop 13 (2%) are well less than the average rate of inflation (the CPI) (3.5% - 4.5%). All those services that you named get more expensive because dollars get less valuable. So in order to buy goods and services that you named, we have to pay more each year."

Highlight from the link:
"The property tax has proven to be a stable revenue source for local governments, growing almost 10 percent per year between 1980 and 1992; even in 1992, a recession year, the annual increase was 7.9 percent."


Posted by Amber, a resident of Country Fair
on Feb 4, 2010 at 10:09 am

To a resident of the Downtown neighborhood 22 Hrs. ago. What did you say your name was? I guess when people don't agree with you, you have to insult them. Is that why you choose/fail to acknowledge your real name?


Posted by ____, a resident of Another Pleasanton neighborhood
on Feb 4, 2010 at 5:18 pm

I thought encouraging a high turn over of homes leads to greater tax revenue(assuming that the value of the house has been increasing faster than the limits of prop 13)


Posted by a reader, a resident of Another Pleasanton neighborhood
on Feb 4, 2010 at 8:51 pm

To Stacey,

""The property tax has proven to be a stable revenue source for local governments, growing almost 10 percent per year between 1980 and 1992; even in 1992, a recession year, the annual increase was 7.9 percent.""

And I'll repeat what I said:

""The trouble is that inflation erodes the buying power of a dollar and the limits in Prop 13 (2%) are well less than the average rate of inflation (the CPI) (3.5% - 4.5%). All those services that you named get more expensive because dollars get less valuable. So in order to buy goods and services that you named, we have to pay more each year.""

You see the problem, right? 1980 to 1992 not only saw substantial CPI inflation, but also substantial growth in population. It doesn't matter that property tax revenue grew "almost 10 percent per year between 1980 and 1992". It, of course, had to grow because so many new people needing services moved here, and those services got more expensive due to inflation. If prop 13 had allowed tax rates to more closely track the CPI, there would have been more revenue and a more efficient market for homes.

Then there is the other problem about interfering with natural market forces and creating an incentive not to move, whether to a more expensive house or to a less expensive house. Market biases such as this lead to less wealth creation and a less efficient economy. This is basic free market economics, and it is not controversial.


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