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Fairness of Proposed Parcel Tax to Renters

Original post made by Beth Turner, Downtown, on Mar 18, 2009

If the proposed parcel tax to benefit Pleasanton schools passes, it will be fairly simple for homeowners to pay the tax and list it on their IRS 1040 Schedule A as a deduction. Renters of apartments or other MDU (multiple dwelling units) types of living will have the landlord roll the tax into the monthly rental amount. There will not be the same visibility that this portion of your rent is actually a tax passed through to you that you can take off your tax return.

If the parcel tax passes and ceases after several years, what will the mechanism be for the monthly rent to be lowered with changing tenants? The landlord may not lower the rent to reflect the tax no longer being assessed and just calculate the percentage increase based on including the tax, which amounts to a forever tax.

There are people who fall through the cracks who are retired but not age-qualified seniors but who live on a fixed income. Technically, some are also not disabled. So far they are fully eligible to pay the parcel tax.

Where I live there are 22 units and the only children are those who are born here. Of the 3 school age children, 2 are home schooled and only 1 attends Pleasanton schools. It would be surprising to our MDU residents to find that with relatively low income (far below the $113K median household income for Pleasanton) we are supporting Pleasanton schools with no kids of our own.

If the parcel tax passes, those with homes and kids will be glad as will teachers and administrators. I suppose the thought is that incomes are so high in Pleasanton that everyone can afford to do so and that it is appropriate that everyone pay for the schools. I remember asking people what they did with their stimulus checks. When I could not get any answer someone finally spoke up and said, "We make too much money to receive a stimulus check." That never occurred to me and perhaps what I've written has never occurred to you.

Comments (26)

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Posted by Jack
a resident of Downtown
on Mar 18, 2009 at 11:05 pm

Assuming your landlord would even bother to "roll the tax into the monthly rental amount," your rent would go up 87 cents per month.


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Posted by Michelle
a resident of Parkside
on Mar 19, 2009 at 10:26 am

That is less than 3 cents per day. How can you loose for less than 3 cents per day when you know your kids and neighborhood kids are getting the best education Pleasanton can provide. That is a lot of pressure off parents and single parents to know. Better than trying to pay for a private school somewhere for thousands, which is not even guaranteed to have a credentialed teacher. Yes on parcel tax- Measure G!


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Posted by Disagree w/B
a resident of Another Pleasanton neighborhood
on Mar 19, 2009 at 12:36 pm

It isn't just 3 cents a day if it's passed on to renters, or just 64 cents a day/$233 a year to homeowners. It's giving $4.6 million annually--$18.4 million over the life of the tax--to an organization that has made bad fiscal decisions.

Look at what the federal government has done with our taxpayer dollars and AIG. They own 80% of the company and didn't know there were contracts with bonuses--oops, then they un-forgot they actually knew and agreed to pay them.

I'm sure if you broke down the amount given to AIG by every taxpayer in America you could make that look reasonable too--$150 billion, divided by 138 million taxpayers, divided by 365 days, is less than $3 a day--and if you spread it over four years, it's 74 cents a day. If my math happens to be correct, does that make anyone feel better about paying those bonuses?

Just because we are dealing with a local taxing entity--people who have already mismanaged what they had--there is no reason to believe we will get a better outcome this time, no matter how you break it down to appear palatable, be it a stick of gum, a latte, or any other measure you can come up with.


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Posted by resident
a resident of Downtown
on Mar 19, 2009 at 1:08 pm

Beth, Your statements are not correct. I am a homeowner with no kids who will be paying even more to support yours. Just list it on my schedule A huh? And then just watch the AMT make my tax deductions worthless. So that more money can go to people who have kids and get $1,000 credit per kid -- often times as a refundable credit. Which means that they get the money even if they paid ABSOLUTELY ZERO income tax. Don't get me started on income taxes, property taxes have me hot enough. I will forever vote no to ANY new taxes.

NO ON THE PARCEL TAX


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Posted by frank
a resident of Pleasanton Heights
on Mar 19, 2009 at 3:14 pm

Beth, are you on a month-to-month rental agreement? If you are, does your landlord raise the rent each month when his costs go up, say, like if the water bill goes up by some amount, he sends you a 30 day notice that rent will $1.50 now?

Yes, NO ON PARCEL TAX but not for the reason Beth states. If fact, quite the opposite. Rental parcels will only pay $233 per year, yet they contribute a reasonable number of students to the schools, though not exemplified by Beth's rental. It would be interesting if someone could do a tally on the number of PUSD students who live in rental units in the district.


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Posted by Disagree w/B
a resident of Another Pleasanton neighborhood
on Mar 19, 2009 at 4:30 pm

Lapkoff & Gobalet, demographers, have probably provided that data to the district already. Don't know if it is on the district's web site though.


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Posted by Disagree w/B
a resident of Another Pleasanton neighborhood
on Mar 19, 2009 at 4:42 pm

Here is the link to one report: Web Link I couldn't get it to search for apartment or student generation factor. Could be my software.


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Posted by Mary
a resident of Birdland
on Mar 19, 2009 at 6:29 pm

Guess what the pink slip teachers are saying! I don't care about teaching for the rest of the year I won't have a job next year so what does it matter!! Doesn't that sound good!! Please don't tell me that's its not true because I heard a group of teachers at a high school saying this. I was on the fence about the parcel tax, guess what I am not any more.


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Posted by Parent of Two
a resident of Val Vista
on Mar 19, 2009 at 7:46 pm

Parent of Two is a registered user.

Mary,

If you heard the teachers say stuff like this in public, then I'm GLAD they're being fired. That's the height of unprofessionalism.


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Posted by Sandy
a resident of Mohr Park
on Mar 19, 2009 at 9:23 pm

Sandy is a registered user.

Mary, if you heard teachers saying something like that, report it to the principal.


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Posted by not sure
a resident of another community
on Mar 20, 2009 at 8:14 am

so far as the parcel tax -this is what it looks like to me:
1. - i have not heard of any concessions from the silent teachers union.What would they give up to retain their members? They would have a much stronger case among voters for just the tiniest concessions.
Maybe they just don't care enuf or have strong reasons not to do so.

2. -Why is the vote on the parcel tax coming before the reassessment
notices on properties? I would think that homeowners would be much more likely to vote the tax if they saw their property tax drop(assuming accurate reassessments)

As a sidenote, i am currently paying out 7200 a year in property tax. In all, i have payed 28k to another school district and 19k to this school district without a single child in school. Of course i want children to have the best education and i have paid out willingly, but at some point........


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Posted by John Adams
a resident of Amador Valley High School
on Mar 20, 2009 at 8:26 am

Not sure:

1) The union keeping silent increases the community's perception of the size of the budget shortfall, strengthening the perceived need for a parcel tax. Why should they put their money on the table before they see how the hand plays?

2) The vote for the parcel tax is being taken at the most opportune time. The district is spending $300K of your tax money for a special election hoping for a low voter turnout, which increases the likelihood that they will get 66% in favor.

Everyone needs to get out and vote in this election JUNE 2!!


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Posted by Beth T.
a resident of Walnut Grove Elementary School
on Mar 20, 2009 at 8:51 am

When California passed Proposition 13, many of the same arguments were made. Now, we have some of the worst schools in the country! The single biggest factor in my decision to purchase a home in Pleasanton was the quality of the schools. If those without children would like to sell their own home someday, they should also support the parcel tax. It's an investment in their own property.


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Posted by janet
a resident of Walnut Grove Elementary School
on Mar 20, 2009 at 9:05 am

Personally my husbands income is 1/3 it used to be and even when he made full salary we struggled to pay for a small home in Pleasanton for the benefit of our son. Not everyone can afford more taxes and some of us are having a hard time just staying afloat. I think having a voluntary fund raiser for schools instead of the parcel tax
would be a better option. I believe people who can afford to will be generous. The economy will turn around eventually.


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Posted by JBower
a resident of Another Pleasanton neighborhood
on Mar 20, 2009 at 9:10 am

Concerning the high school teachers---20 teachers at Amador received pink slips last week. Yet the actual decrease being planned for is only about 8 positions! (103 current; 95 next year.)
Isn't that extreme overkill to hand out slips to two and a half times the number of actual positions that will be lost? I can understand the teachers' frustration but shouldn't they be directing their anger at the district for putting so many extra teachers in this position? Shouldn't they be angry at the union for not getting into serious negotiations back in January so the pink slip deadline would not have to affect so many?
Instead they seem to be directing that frustration towards parents and the community which of course, is exactly what the district wants.


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Posted by Optimistic
a resident of Golden Eagle
on Mar 20, 2009 at 2:42 pm

Optimistic is a registered user.

Mary and Parent of Two,

While it is unfortunate that some teachers are making comments like that (which they were probably joking around anyways because all of the teachers that I know that received pink slips are continuing to be the best teachers they possibly can be regardless of the fact they probably don't have jobs next year) it is not fair to make generalizations and try and persuade other people that all pink slipped teachers are bad and say inappropriate things. It simply is not true.

You might want to ask the principal of that school if you can observe a pink slipped teacher's class for a period. I think you'd be surprised and saddened by how great these teachers are and what a loss to the district it would be to lose these teachers.


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Posted by Homeowner
a resident of Foothill High School
on Mar 20, 2009 at 6:53 pm

Homeowner is a registered user.

I am a Pleasanton homeowner who lost my job and I'm struggling to make ends meet. I will definitely vote against the parcel tax in June. I would like to know why registered voters who don't own property are being allowed to vote on the measure and why are only property owners being held responsible? I have no children in the Pleasanton Unified School District and feel parents of the children that attend should be held responsible including those that aren't property owners. Spending the $200,000 - $230,000 for the special election is a waste of tax payer money.

VOTE NO ON THIS PARCEL TAX MEASURE ON JUNE 2ND.


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Posted by Mike Patterson
a resident of Las Positas
on Mar 21, 2009 at 9:13 am

Mike Patterson is a registered user.

Jacks comment points out how fair the parcel tax is. If the landlord passes on the true cost, after his Schedule A deduction, the cost would be more like 50 cents a month.


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Posted by steve
a resident of Livermore
on Mar 21, 2009 at 9:36 am

steve is a registered user.

I'll start by saying that I am not a tax expert, but my understanding is that the parcel tax would not be legally deductable from income taxes.

Please see page A-5 of the 2008 1040 instructions for property tax deductions. "Include taxes you paid on property you own that was not used for business, but only if taxes were based on the assessed value of the property." Further it says "Do not include...itemized charges.."

This tells me two things. First, the landlord can't deduct property taxes because the property would have been used for business. Second, the parcel tax is not deductable because it is not based on the assessed vaue of the house (i.e. it is not a percentage of the assessed value). I'm not sure how the first point applies to a individual renting a home or a company which mannages an apartment complex with many units, but I think the second part is fairly clear with regards to the parcel tax.

Further, even if the landlord is able to deduct it from their taxes, the reduction on income taxes would reduce the overall burden of the property tax, and it is the reduced burden that may actually be passed on the the tennant, not the full burden. So really its on the landlord to pass on the aggregate of the cost, and the resulting tax savings to the tennant. There is nothing that prevents the landlord from passing on the benefit from the reduced taxes any more than there is anything that prevents the landlord from passing on the increased cost. Except competition I suppose.

Anyway, when I was renting, I never had enough deductable expenses to itemize anyway. With no mortgage, state income tax and the car tax never quite got me over the standard deduction. So maybe if someone who has a high income who is renting would be impacted. and of course this all assumes the parcel tax is deductable, which it appears not to be.


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Posted by steve
a resident of Livermore
on Mar 21, 2009 at 9:38 am

steve is a registered user.

Oops, I meant to post a link to the IRS 1040 instructons...

Web Link


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 21, 2009 at 11:46 am

Stacey is a registered user.

I have yet to see Jack explain why a landlord would take $233 out of his yearly profit and not pass the parcel tax onto renters.


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Posted by pleasanton resident
a resident of Country Fair
on Mar 21, 2009 at 4:14 pm

pleasanton resident is a registered user.

I think it is interesting that the people who don't have kids don't want to help fund this parcel tax. These kids will be making decisions about your future, and will be funding your social security benefits.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 21, 2009 at 4:36 pm

Stacey is a registered user.

Pleasanton resident is confusing readers by linking the idea of how the next generation takes over from the previous with the effectiveness of a parcel tax on school quality. More money does not make a quality school. There is no guarantee that passing a parcel tax ensures leaders who will be making future decisions.


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Posted by jack
a resident of Downtown
on Mar 22, 2009 at 8:37 am

jack is a registered user.

Why? To an owner of a 22 unit apartment project, the proposed parcel tax equals .0007 of the project's annual revenue. (Assuming a modest Pleasanton rent of $1250 per month) For seven percent of one percent, I don't think they'll bother...


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Mar 22, 2009 at 8:50 am

Stacey is a registered user.

That's total revenue. We don't know their current profit after costs and how much the tax would encroach on that. It is probably small, yes, but I think they will bother. That's capitalism. Is an owner supposed to just pay $233 out of the goodness of their heart? They are running a business. They'll give a higher rent to the first new renter.


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Posted by jack
a resident of Downtown
on Mar 22, 2009 at 10:00 am

jack is a registered user.

Exactly... My original post was responding to Beth, whose exposure to the tax would be 87 cents per month. I still contend she will not get a rent increase notice for 87 cents. The bill totally gets passed on the New Renter. And New Renter will be happy to pay it!
"Goodness of their heart," your words, certainly not mine. Property Owner is a big winner in this thing! Now that they own 22 units in one of the only properly funded school districts in the state, the first New Renter who pays $20 more than Beth covers the tax. What about the next 5-10 units that turn-over? New Renters may (again happily) pay $50-$100 more than Beth providing a huge boost in revenue and profit to the apartment owner. So does the tax get passed along? Yes, not as a penalty to existing renters like Beth, but rather as a premium to future renters...


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