skip to main content

Listen

Read

Watch

Schedules

Programs

Events

Give

Account

Donation Heart Ribbon

The Impact of California’s Biggest Tax Revolt

Audio

Aired 2/23/10

As part of Envision San Diego, we take a look at the fall out of the biggest tax revolt in California history - the passage of Prop 13 in 1978.

MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. And Prop 13 is our topic, too. As California struggles to pinch together the funds to cover one huge budget shortfall after another, as state services are strangled to the point that entire programs are on the chopping block and state workers are furloughed, some say now may finally be the time to re-evaluate Proposition 13. Prop 13 was passed by voters back in 1978 to limit increases in property tax and reduce legislators’ ability to raise any tax with a simple majority. Its impact on California has been dramatic and lasting, and some claim Prop 13 ushered in a nationwide backlash against government spending. As part of our Envision San Diego project, we’re taking a look at Prop 13, the biggest tax revolt in California history. I’d like to welcome my guests. Joanne Faryon, KPBS Envision reporter. Good morning, Joanne.

JOANNE FARYON (KPBS Envision Reporter): Good morning, Maureen.

CAVANAUGH: And Isaac Martin is professor of sociology at UCSD, author of “The Permanent Tax Revolt” about Prop 13. Welcome to These Days, Isaac.

ISAAC MARTIN (Professor of Sociology, University of California San Diego): Good morning, Maureen.

CAVANAUGH: And we’re inviting our listeners to join the conversation. Do you remember the arguments for and against Prop 13? Do you think it’s a good idea to continue making it hard to raise taxes in California? Join our discussion by calling us at 1-888-895-5727 or post a comment at KPBS.org/thesedays. So, Joanne, as I said, over 30 year ago this has been in place. Why now? Why did you decide to focus on Prop 13?

FARYON: Well, a number of reasons. First, as you know, Envision looks at various issues throughout the year. We spend a number of weeks investigating, reading and talking to people. And it just seemed as though in the last couple of years, whether we were looking at education, unemployment, jobs, housing, the economy overall, every road led us to Prop 13. We heard from so many people, well, you know, it might because of Prop 13, or blame it on Prop 13. So we wanted to find out if, in fact, can we blame some of our, you know, economic woes on Prop 13, and that’s sort of the question that we set out to answer. Especially now, 32 years later, it seems every year now for the last few years we hear from the state that there’s not enough money and we hear that education is faced with smaller and smaller budgets.

CAVANAUGH: So when the – Prop 13 came up in those conversations, what aspect of Prop 13 were people pointing to and saying, you know, that might be the problem after all.

FARYON: Yeah, that’s a great question. So let’s look at education, for example. Before Prop 13, property taxes were the way that local municipalities, school boards, could raise money. So if you were, say, San Diego Unified and you needed more money to hire more teachers, really, you could – you would go and raise property taxes. That was the main source of revenue for education. What happened after Prop 13, the – it limited the amount of property taxes that jurisdictions could raise. It limited to 1% of your purchase price of your home. So immediately that ability to raise money, as much as you needed, was taken away. It also changed the way cities looked at development. If, before Prop 13, cities could raise money through property taxes, there was more of a motive to have more homes built. Right? It was a revenue source. Well, if that’s taken away, it’s like, well, are you going to build more houses or are you going to expand tourism where you can get hotel tax revenue? Are you going to expand things like the convention center, you’ll see more sales revenue, because those became the new sources of revenue for cities. So we saw municipalities sort of even changing the way they zoned things, whether they did it deliberately or not, but this was a way of getting, you know, getting revenue from other places. So when we looked at things like even employment in San Diego County, we were told, well, the reason we have so many low paying jobs is because that’s the way the city gets money. If you build more hotels and you expand the convention center, you get more sales tax receipts and you get more hotel tax revenue.

CAVANAUGH: Now, some people say an even wider impact of Prop 13 besides property taxes was the fact that it limited legislators’ abilities to raise taxes with a simple majority. And, you know, we hear so much about gridlock in Sacramento, do people point to Prop 13 and say that’s the reason we have gridlock?

FARYON: Most people don’t because they don’t know that that was part of Prop 13. Yes, you’re right. That’s why there is gridlock but in terms of do people know that? No, they don’t know that. And we have a sample ballot from the newspaper from 1978, one of our homeowners hung onto it, and in the description of Prop 13, it doesn’t even mention that. It doesn’t even mention the two-thirds majority. We’ve spoken with so many people who, you know, lived in their homes back in ’78 and most of them are not aware of that. If you look at the campaign literature in terms of the proposition, if you look at the advertisements, nobody talks about it.

CAVANAUGH: Wow. We are talking about Prop 13, the legacy of Proposition 13, inviting you to join us. 1-888-895-5727 is our number to call. Let me bring Isaac Martin in on the conversation. He’s professor of sociology at UCSD and author of “The Permanent Tax Revolt” about Prop 13. Now Joanne told us a little bit about what the ballot looked like back in 1978 but let’s take a look back at the history. What was the environment like in California in 1978 that gave rise to this huge tax revolt?

MARTIN: Well, in 1978 people’s property taxes were increasing really rapidly and California was filled with a lot of homeowners who were very anxious that they were actually going to lose their homes because their property taxes were going up. Another important thing to note about this is that in 1978 the reason for these big property tax increases was not that politicians were suddenly voting to increase the property tax rate, it was that home prices were going through the roof and people were getting taxed on the value, the current value of their homes. And so in consequence, people were casting about pretty frantically for solutions that would break that link between the prices of homes on the current market and the property taxes that they had to pay.

CAVANAUGH: If I remember correctly, there was a lot of talk about someone who maybe had bought a home for, you know, $20,000 30 years ago and now it was worth $200,000 or more and literally could not afford to pay the property taxes and were losing their homes. Was that just propaganda or was that really happening?

MARTIN: No, it was really happening. Absolutely it was happening. And it was an issue particularly for people who didn’t have plans to sell their homes or move. A lot of folks who treated their homes, not as an investment asset, but instead as where they planned to live out the rest of their days, well, this was a real and very serious problem. You might think that when the value of your home goes up from $20,000 to $200,000, you know, you should party, it’s a great increase in your wealth, right? But if you’re not actually planning to realize that money by selling your home, well, gosh, at the time all it meant was a big increase in your tax burden and for folks on fixed incomes who weren’t planning to move, it was a serious economic squeeze in for some folks, something like a catastrophe.

CAVANAUGH: And, Isaac, remind us, who was pushing this forward? What organization rallied to this cry of these homeowners being strangled by property taxes?

MARTIN: Well, you know, there was a whole laundry list of organizations that got involved from all over the political spectrum, and this is one of the most interesting things that we’ve forgotten about this period. So, on the one hand, some of the earliest groups to get involved were the California Tax Reform Association, some groups on the left that really included a lot of activists who had experience organizing in the civil rights movement and the welfare rights movement. And they said, you know, we see low income people getting taxed out of their homes while big business gets tax breaks. We think that’s unfair. And so there were a lot of groups on the left pushing for reforms to the property tax that would’ve made it more progressive. Then there were also groups with much more conservative ideas about what to do about the problem and here Howard Jarvis and Paul Gann, the authors of Proposition 13, were from that side. Howard Jarvis was part of an organization called the United Organizations of Taxpayers. It was a group of Los Angeles area homeowners associations. And Paul Gann had an organization of his own in the Sacramento area. But, really, all kinds of organizations were involved. There was a real ferment.

CAVANAUGH: We are talking about Prop 13 and taking your phone calls, 1-888-895-5727. Let’s speak with Yvonne in Rolando Park. Good morning, Yvonne. Welcome to These Days.

YVONNE (Caller, Rolando Park): Good morning, ma’am. How are you today?

CAVANAUGH: I’m quite well. Thank you for calling.

YVONNE: Yes, my pleasure, thank you. Actually, just a brief history, my grandparents came out from Michigan and purchased a home in the El Cerrito area, which is off of College/University in 1947. And then my parents had purchased the home that I live in in 1958. Our home then was $16,000 and I believe our grandparents’ home cost all of $14,000 many years ago. And our families are all passed away. I inherited our mother’s home and my sister inherited our grandparents’ home where she lives with her wonderful husband. And all I can say personally and I’m no expert on Prop 13 but it’s been a true blessing for us.

CAVANAUGH: And – Go ahead. I’m sorry.

YVONNE: No, that’s all right. It’s just been a true blessing for us because our property taxes are quite low and we’re very appreciative of that.

CAVANAUGH: Thank you for calling. I appreciate that, Yvonne. Tell me more about that, Joanne.

FARYON: Yes, actually Prop 13 allows for a couple of things. You can transfer your property tax base on that house from parent to child and from grandparent to grandchild if the parent is actually deceased. It’s a one-time only transfer but you can do it. There are all kinds of loop – well, I don’t want to call them loopholes but these allowances in Prop 13. Also what a lot of people don’t know, I realized in working on this, is if you are 55 or older and you want to downsize, buy something worth less or the same as your current value of your house, you can take your property – your prop tax – your property tax base with you as well. Because I spoke with a lot of people who are 65 years old and they think they can never move because they’ll have to pay higher property taxes. That’s not the case. And, in fact, over at the County Assessor’s office, they deal with this daily, people having these types of questions. So it is – you can actually take these property tax bases with you.

CAVANAUGH: Now, I understand, Joanne, you’ve spoken with a number of people who really love Prop 13. Is that correct?

FARYON: Yes, some who love it and some who love it and hate it. And it’s interesting, you’re talking about was it true at the time where house values were really going up and people were losing their homes, we heard from those people and it wasn’t just the little old lady. I mean, we spoke with a lot of people who were raising young children at the time, they were young families buying their first home, and I want to read you just a couple of e-mails I got from some of them. And this one is from Lorraine who says she bought her house in Bay Park for $29,000 back in 1974. Six months later, the house had doubled in value and the taxes doing the same. Nine months later, the value had tripled and the taxes along with it. Each of us, a firefighter and teacher, were making under $9,000 a year. We were not sure at the time if they could hold onto their house because values were escalating so dramatically. And we heard that story over and over and over again. And this is why people said yes. And it’s funny, they were getting their – at the time, it was June of 1978 when they actually voted and just before that they were getting their new assessments. And their new assessments were showing that their homes were worth a lot more. Actually, yesterday, we interviewed David Butler, who’s the County Assessor. He was one of those assessors who was walking the streets of San Diego County assessing home values at the time and he said, yes, they were going up and then once Prop 13 was passed, he remembers working overtime trying to figure out what were they going to do now? They had to throw all those new assessments out the window and, in fact, Prop 13 called for them to roll back taxes, to go back to assessments, I think, that were from 1976, am I right?

MARTIN: 1975, 1976.

FARYON: 1975. Yeah, so they were actually, you know, lowering them.

CAVANAUGH: I read that property taxes actually plummeted 57% after this particular Prop 13 was enacted. And I’m wondering, let me ask you, Isaac, did anybody foresee this? I mean, did anyone foresee the consequences of so dramatically curtailing a revenue source that was so heavily relied upon by municipalities and the state?

MARTIN: Absolutely. Although, the people who foresaw that there would be dramatic consequences didn’t quite guess what those consequences would be precisely. But the campaign against Proposition 13 was filled with predictions that it would have really dire consequences for state and local government services. And it proved to be an argument that just didn’t have much purchase with people who were concerned about keeping their homes. You know, if the tradeoff is, well, the schools are going to get a little worse but I don’t have to be on the street, people decided they were going to, you know, let the schools get a little worse. The long term impact has been quite dramatic but in the short term, immediately after Prop 13, people thought they’d actually sort of dodged a bullet. The headlines from the time were all about how, you know, the impact of Proposition 13, not as dire as people predicted. And it’s because the state really stepped in and spent down a big state budget surplus to bail out local governments that were suddenly strapped for cash because of Proposition 13.

FARYON: Producer Andy Trimlett’s been working on a video about the history, about 1978 and in his video you can see the actual ballot does warn people that if you say yes to this, it does – it’s a potential $7 or $8 billion loss to the state. We will lose revenue. And as Isaac says, there was a surplus at the time so the state could come in after it passed and kind of fill in the gap but year after year that doesn’t happen anymore. We’re not sitting on a big surplus and so we end up with this structural deficit in our budget.

CAVANAUGH: Let’s take some calls. We are taking your calls, inviting you to participate in this conversation on the legacy of Proposition 13. Our number is 1-888-895-5727. Let’s hear from Rick in Mission Valley. Good morning, Rick. Welcome to These Days.

RICK (Caller, Mission Valley): Good morning. Actually, you touched on my topic just briefly which was – I mean, I remember Prop 13 and I remember that one of the issues was that property taxes were going up, you know, to pay for things and in the meantime there was this large budget surplus. I believe it was around, at the time, you know, it was quite high, it was like about $2 billion. And so I think those two things, the fact that property taxes were going up, we had this surplus, and people were wondering, well, you know, the politicians are just, you know, going to the trough too often. And another little aside is the governor at the time, who, you know, who was Jerry Brown…

CAVANAUGH: Okay, I appreciate that. Thank you for that history lesson. I appreciate it. Let’s hear from Jim in Vista. Good morning, Jim. Welcome to These Days.

JIM (Caller, Vista): I remember I was young at the time and we studied Proposition 13 in a group and after studying it, I was really frightened about it. And the long term consequences seem to me like what’s happened is, it’s destroyed our school system because basically you have a school system that was funded on property taxes and what’s happened is businesses that stay in the same location forever and people that stay in their same homes forever, their property taxes go up almost not – nonexistent. And new people that buy new homes make up for those property taxes, the people at least have the ability to make up for higher property taxes, pay them when they buy their new homes. And the problem is, you go back to bonds to try to raise monies for our schools and those older people who are in those homes have no interest, because their kids aren’t in school, in raising the funds to pay for schools any more. So you had – this is just one of the many aspects of this proposition that were just a total disaster.

CAVANAUGH: Okay, well, thank you, Jim. Thank you for that. So we’ve had a couple of negatives, a couple of positives. We have to take a short break. When we return, we’ll continue taking your calls about the impact of Proposition 13 and learning a little bit more about the history and how Prop 13 has worked out to – in – to create a budget problem for the State of California. Our number is 1-888-895-5727. You’re listening to These Days on KPBS.

CAVANAUGH: Welcome back. I'm Maureen Cavanaugh. You're listening to These Days on KPBS, and we’re talking about our new Envision San Diego project, Prop 13, looking at the impact of the biggest tax revolt in California history. I’d like to welcome my guests, Joanne Faryon and Isaac Martin, and remind you that we are taking your calls at 1-888-895-5727. And you can post your comments online at KPBS.org/thesedays. Let’s go right to the phones and take a call from David in San Diego. Good morning, David. Welcome to These Days.

DAVID (Caller, San Diego): Good morning. Thank you for taking my call. I just wanted to point out that, you know, Proposition 13 has actually saved more people from losing their homes than they realize. I know some people that pay up to $5,000 a year in property taxes and have no idea how they’re going to make those payments. If the government’s going to be needing money to pay for other things, they’re going to have to come up with a better way on how they spend the money that they have now because the bottom line is, is that I don’t think anybody realizes that Proposition 13, if it was to go away, not only would people lose their homes but future generations would have a hard time being able to buy a home.

CAVANAUGH: David, thank you for that. I think we can hear from David’s comment why Prop 13 is sometimes called the third rail of California politics?

MARTIN: Absolutely. Very few politicians will dare to touch it, the metaphor of the third rail suggests, because it’s electric and it’ll kill anyone who…

CAVANAUGH: Exactly.

MARTIN: …who dares to tinker. I want to pick up on another thing David’s suggesting, which is that in the absence of Proposition 13 a lot of people would be losing their homes. I think that’s true if nothing else were done to provide people with protection from tax increases that would come from rising property values. California’s always had this boom/bust cycle in real estate and during the boom phase, boy, those values do sometimes climb. But there were a lot of alternatives on the table so Proposition 13 wasn’t the only way that we could’ve protected people and really saved people’s homes. And it came with a lot of other provisions like this two-thirds super majority provision that Joanne talked about that people didn’t know much about and maybe wouldn’t have cared much about if they knew because they were so focused on saving their homes, but that the longterm consequences of which have been really, at best, a mixed bag for California.

CAVANAUGH: Let’s take another call if we can. Dan is calling from La Mesa. Good morning, Dan. Welcome to These Days.

DAN (Caller, La Mesa): Well, good morning. I suppose I have a little different perspective because I’ve bought and sold homes over the last few years and I pay substantial property taxes. Where I live currently, I have persons who live on either side of me who bought many, many years ago and actually, literally, 40 years ago, and it seems as if I’m subsidizing them. I pay a large amount of taxes that is seemingly related to services provided to the property and they’re paying substantially less. And that’s also a result of, you know, Prop 13. It’s a substantial inequity. And, you know, we need to address taxes in a broader way than just simply attacking the assessed value because, like I said, I’m supporting, I’m subsidizing my neighbors.

CAVANAUGH: Thank you, Dan. Thank you. We have a caller on – calling from San Clemente with a similar question. James, welcome to These Days.

JAMES (Caller, San Clemente): No, it’s not exactly the same question. On average, 20% of all Californians move every month and the proposition was passed over 30 years ago. Everybody on our block has moved since then, and I’m just wondering how many people are still in their homes paying the Proposition 13 tax rate.

CAVANAUGH: Great. Thank you very much.

FARYON: I can tell you, 8%. We have about 8% of San Diego County homeowners who are at that original 1978 rate. However, there are a large majority – well, a majority of homeowners who are still paying less than market value in terms of their property tax base. And the Assessor, Dave Butler, again provided me with the chart to show the breakdown in terms of how many homeowners are paying – there’s about 29% who bought their homes between 2003 and 2008 and those are the people who are going to be paying at the higher end, right when markets were higher. However, again, the assessor will reduce your property tax bill if the value of your house is lower than what you paid for it. But other than that 29%, there’s another large chunk, they’re paying maybe – they’re paying less than what their house would be sold for today, so less than 1% of their market value. And then 8% paying that very, you know, small amount based on the 1978 price. You should know that California has one of the lowest effective property tax rates. That means that if you added up all of the property in California and you determined its market value, we together, as a state, pay less than 1% of that market value in our taxes. So, yes, homes change hands but not enough to actually make up for this way of taxation. We still pay less than 1% together of our home’s market value. And also, I mean, I’m hearing things about a $5,000 property tax bill. To give you a little perspective, New Jersey – New Jersey schools rank at the top of the list in terms of how much money they spend on students. California’s at the bottom of the list. And we hear about this all the time in education circles. But New Jersey has the highest tax rate. Their counties always rank in the top when it comes to property taxes. Their property tax bills are $6,000, $7,000. Our average property tax bill is just over $3,000 and our home values are much higher.

CAVANAUGH: It’s interesting. I wonder, Isaac, if you could address this, what a caller referenced as the fundamental inequality of this freezing, basically, your property tax rate because the value of your home is the same as your neighbor’s basically but you may be paying an enormous amount more in property taxes if your neighbor has been living there for quite some time.

MARTIN: Well, that caller’s absolutely right, that this is pervasive and this is one of the fundamental questions we have to ask about Proposition 13 is, is that fair? There are some really interesting studies that have been done about this to look at the magnitude of that inequality and – in property tax bills between people who’ve owned for a long time and people who haven’t. And there’s a professor in the planning department at University of Southern California named Dowell Myers who’s done wonderful research on this, showing that it’s a real – creates real generational inequities. So younger home buyers, in particular, end up paying through the nose, in effect, to subsidize the property tax breaks enjoyed by people who’ve lived in their homes for a very long time. Another interesting thing to note is that this inequity between, you know, your property tax bill and your neighbor’s property tax bill, how big that inequality is is going to wax and wane depending on changes in the housing market. So it’s actually been shrinking now. As housing prices decrease, the benefit of Proposition 13 to longtime homeowners has also been decreasing. But during boom times, that inequality grows and if you think that’s unfair, then the unfairness grows, too.

CAVANAUGH: I see. Let’s take a call. Rand is calling from La Jolla. Good morning, Rand. Welcome to These Days.

RAND (Caller, La Jolla): Thank you for taking my call and thanks for this discussion. I would just like to put two issues on the table. The main one is something that really shocks me, never comes up in these types of discussions, which is the distinction between commercial properties and homes. Of course, nobody wants homeowners to be taxed out of their homes but Prop 13 also holds down the property taxes paid by shopping malls, office buildings, all kinds of commercial properties. And they have a loophole that homeowners don’t have, which is that they can sell the holding company that owns the property and then someone else can take ownership of that property but, theoretically, it hasn’t changed hands, just the company has changed hands. And so there’s many commercial properties in the state that have not been reassessed for many years and they’re not paying the cost of the essential services that they need to stay in business. And I think that that aspect of Proposition 13 is very unfair and needs to be changed.

CAVANAUGH: Rand, my two guests are nodding furiously to your comments, and they both want to get in. So go ahead, Isaac, first.

MARTIN: Sure. I want to thank Rand for bringing this up. It’s a very important issue and it’s one that Californians don’t know about. There’s actually a survey, research on people’s opinions of Proposition 13 that shows, of course, a vast majority of Californians like Proposition 13 very much but a small minority of those people who like Proposition 13 actually know that it also applies to commercial property. Rand’s absolutely right that it does. The other interesting thing to note is that when you ask people, okay, what parts of Proposition 13 might you be willing to reform, this is one that actually a majority of some people in polls say that they’d be willing to rethink. When they’re told about this, people are really eager to keep the protections on homes but, you know, a little less concerned about protecting the leases of longterm commercial businesses.

CAVANAUGH: And, Joanne, what have you found out about that…

FARYON: Well…

CAVANAUGH: …dichotomy?

FARYON: …our caller will be happy to know we’re looking at those numbers. In fact, in San Diego County, commercial property, it’s less than 8% in terms of how many still retain their original 1978 property tax base. And commercial property is changing hands in this county at the same rate as residential, which is actually not the norm. In the state, commercial tends to change hands less frequently. Yes, there is a loophole. If you are a corporation and you sell your corporation and there’s no majority interest, yes, you can keep that same property tax base. How often is it happening in our county? We don’t know. The assessor really doesn’t know also. It’s something they look for. It does happen in the state and there’ve been some highly publicized cases up in Northern California. Is there a move to suggest, hey, why don’t we split the tax roll and, like Isaac says, why don’t we keep Prop 13 for homeowners but maybe commercial you get reassessed or why don’t we just change the tax rate. It’s 1% for residential, maybe it’s one and a half percent for commercial. Those things are being talked about in Sacramento right now. That’s come up with the assessor here in San Diego County and you can look forward to some of our reporting, which will address this issue as well.

CAVANAUGH: Let’s try to sneak in another call. Tony is calling from Lemon Grove. Good morning, Tony. Welcome to These Days.

TONY (Caller, Lemon Grove): Yeah, thanks for my call. Thanks for taking my call. I remember when this debate was going on back in the ‘70s when I was in elementary school. And I remember that before that – the law was passed, we went on field trips every Friday, and after that, we never went on field trips maybe once or twice a year. That was the only thing that changed. I’m a political liberal. I voted for Obama. Taxes are a good thing. They pay for police, they pay for fire. But on the other hand, my mom would’ve lost her home years ago—years ago—had this law not been enacted. And the fear that taxpayers have, the gentleman who suggested we should maybe look at it, tinker with it, the problem is the Pandora’s box effect. Slippery slope, little by little, death by a thousand cuts.

CAVANAUGH: Tony, thank you. I think you just summed up the crux of this whole debate about Prop 13. It’s people, Joanne, people know that there are problems connected with this shrinking revenue and California desperately needs more revenue right now but people are also terrified at the idea of pricing themselves out of their own homes.

FARYON: Look, I mean, I like it, too, in terms of my personal finances. I own a home, and I’m paying less taxes. I’m paying less than 1% because I bought my house nine years ago. Wow. I think that’s great for me. But there’s also a bigger problem, right? What do we do in terms of raising enough money to pay for our schools, our cities, our county, fire, police and so on? So I think that’s really the problem. It’s what’s good for the individual versus what’s good for the community. Is there maybe some balance? Is there some meeting point in the middle and I think, Isaac, you talked about this earlier as well. I mean, maybe there are other alternatives. Maybe Prop 13 wasn’t necessarily the best solution at the time.

MARTIN: Yeah, I mean, I take Tony’s point that we absolutely needed something, right, to I mean, take his mom as an example. To keep her in her home, some policy needed to happen and Proposition 13 was the first one that provided enough tax relief for enough people to really make it stick. But there were other ways to do it, there were a variety of proposals to provide property tax breaks to low income people, you know, people who really were feeling the financial squeeze hardest. There were other proposals to actually split the roll and…

CAVANAUGH: And I think that those are the types of things that you’re going to be exploring in – as your Envision story develops. What, if you could briefly tell us, where are you taking this, Joanne?

FARYON: Yes, so we are going to look at education and we want to give people real information, real statistics, real facts. I mean, and there’s some things people aren’t going to want to hear and just a little preview, we’re going to explore the idea that in states that have tax caps like this, property tax caps like this, test scores are actually lower among students. So we’re going to explore education. We’re going to explore in terms of how it’s affecting cities and counties and their budgets. And, of course, the whole idea of the split roll in the corporations as well.

CAVANAUGH: We look forward to it. Thank you so much. My guests have been Joanne Faryon and Isaac Martin. Thank you for coming in and speaking with us.

MARTIN: Thank you, Maureen. It’s been a pleasure.

CAVANAUGH: I want to let everyone know to see a timeline of the history of Prop 13, you can go to KPBS.org/prop13 and if you want to express yourself—I know so many people called and we couldn’t get you on the air—please post your comment online, KPBS.org/thesedays. You’ve been listening to These Days on KPBS. Stay with us for hour two coming up in just a few minutes.

Comments

Avatar for user 'Jeffrito'

Jeffrito | February 23, 2010 at 9:51 a.m. ― 4 years, 9 months ago

I'm a 2nd generation San Diegan who was finally afford to buy a foreclosure. However, if prop 13 is repealed, I will have to move. I can barely afford the $2800 a year I pay now. I'm a teacher, my wife is a CNA. We still barely make the mortgage. If prop 13 is repealed, we move out-of-state.
Why not tax everyone? Why are property owners the ones footing the bill?

( | suggest removal )

Avatar for user 'wallallison'

wallallison | February 23, 2010 at 10:09 a.m. ― 4 years, 9 months ago

After living in 4 other states, Prop 13 has always seemed a little out of line with reality. People who still support Prop 13 like to say that if Prop 13 hadn't passed, they would have lost their house a long time ago, but they don't know that. One of the things I see Prop 13 doing is artificially pushing up the values of homes in CA over the past 40 years - lower property taxes, in general, do that for home values. Californians want something they don't want to pay for - they want high value homes without higher property taxes. That's like saying, "I want runway clothing at the Walmart price." Homes in CA are WAY out of the norm and just a couple of years ago a comparison in the Union Tribune compared living in CA or living in ID and the only real difference for the bottom line in cost of living was the price of the home - all other comparison evened out, just not the cost of the homes. That says something for the CA real estate bubble, and I believe Prop 13 played a great part in creating the bubble.

And after having my children in a non-traditional charter school for 4 years, I know that having more money spent on a failing education system will not make it better. Belgium spends, on average, $3000 per student and their education system, especially in high school, is far better than ours. The guests mentioned that NJ spends about $6000 per student, but I don't know if they realize that CA spends about $5000 and even more like $5500 on high school students and having an extra $500 or even $1000 will not make our schools better. So, if the basis for repealing Prop 13 is more about "making our schools better", that is ridiculous because schools don't need more money, we need an entirely NEW education system as this hugest of all government monopolies is a massive failure.

( | suggest removal )

Avatar for user 'swedisha'

swedisha | February 23, 2010 at 10:40 a.m. ― 4 years, 9 months ago

prop 13 was intended to keep people in their homes & small busunesses

long term residents make good neighbors

the same is true of commercial businesses

older people tend to vote for school bonds they are not selfish

calif wastes enough money without pushing people out of their homes

our representatives need to be more responsible with the money we have
without exorbitant retirement commitments and organized labor sell-outs

waste not / want not.........bob / san marcos

( | suggest removal )

Avatar for user 'Cchrisman'

Cchrisman | February 23, 2010 at 11:15 a.m. ― 4 years, 9 months ago

What has happened to all the money generated by the Housing bubble? I would like to see a graph showing the increase in property taxes sent to the State from all the homes changing hands over the last 10 years. Prop 13 has helped the bloat in State coffers that allows the state to waste money. We need to manage the money that the state generates at this moment in time, not create every possible department that overlap every other department in the State because they have the money to do it. I have family that works for the state and they inform me that it is a mess. What we need to do is confront these cushy retirement benefits that have been lobbied by a system that rewards the connected and get our state back in line with private residents. Our government spends a large portion of its moneys on retirement of its employees instead of on schools, fire and life safety. Why are we not confronting this issue first. Please, the last thing we need to do is throw more tax money @ a broke system.

( | suggest removal )

Avatar for user 'Rick'

Rick | February 23, 2010 at 11:19 a.m. ― 4 years, 9 months ago

I listened to the entire show and did not hear one word about spending. The "crisis" is on the spending side of the ledger, not income. Ever since the state legislature went full time back in the mid-sixties, they shuffle around the Capitol looking for ways to spend every dime we are foolish enough to give them. They have raided our city and county coffers since prop 13 passed, raised income and sales taxes while creating many new taxes. Econ 101 dictates that income and expenses should be balanced. No individual or business survives by breaking that simple rule, and the state is bankrupt because no one in Sacramento seems to have learned that. The state budget MUST be balanced. Both parties are guilty and I am not optimistic that anything will change. CA citizens are the losers, and the only ones that can change this dire situation with their votes.

( | suggest removal )

Avatar for user 'drjwtaylor'

drjwtaylor | February 23, 2010 at 12:09 p.m. ― 4 years, 9 months ago

According to Joanne, 92% of all homes in California are not protected by Prop 13. She also said 92% of the commercial properties in San Diego were not protected by Prop 13. Assuming these facts are accurate, and I do, then why is there all this moaning and complaining about Prop 13?

We truly do have an out of whack financing system in California. It is so heavily weighted toward the rich that when income of the most wealthy falls, a big chunk of the state's income also falls. We do need a re-balancing among sales taxes, income taxes and property taxes, but Prop 13 is irrelevant and ranting on about it simply clouds the real issues.

( | suggest removal )

Avatar for user 'gwennt'

gwennt | February 23, 2010 at 12:44 p.m. ― 4 years, 9 months ago

I am 81 years old and am in the house that we raised our children in and that we built as young marrieds. We almost had to sell at one point because the taxes were so high and we were a single income family. My husband at the time was a school teacher. I sometimes substituted. Then prop. 13 saved us that worry. I now enjoy my home because I have the benefit of prop. 13. I did not understand that some corporations enjoyed this wonderful benefit and am not sure how I feel about that. Gwennt

( | suggest removal )

Avatar for user 'swedisha'

swedisha | February 23, 2010 at 1:22 p.m. ― 4 years, 9 months ago

stop the waste

insurance, various bureaus, enforcement, fines, government programs,

inspectors of all kinds ( uneducated / ignorant) play the "gotcha" game.

small business friendly ???????? during lunch today i visited a fellow "small business" person. while i waited for him six people from the state
interrogated him about various "violations" he was comitting, signs he didn't have posted and various warnings he did not have..(potential for thousands $$
in fines) "STIMULUS" HA HA HA ...

small business friendly ? this person has been in business for twenty years in the same location, employs several semi-skilled people - pays his taxes and keeps his customers happy.

"BUSINESS FRIENDLY" ?????? bob / small business person

( | suggest removal )

Avatar for user 'Joanne Faryon'

Joanne Faryon, KPBS Staff | February 23, 2010 at 3:06 p.m. ― 4 years, 9 months ago

Hello Everyone, thanks for your comments. First to clarify drjwtaylor, all California property is "protected" under Prop 13. In other words, taxes are based on purchase price, not market value, and cannot increase by more then two per cent each year. Eight per cent of homeowners in the county are still living in the same home since 1978, when Prop 13 was passed. That means they are likely enjoying among the lowest tax bills (based on 1976 market values). And yes, we will address spending in future reports and our final documentary. Producer Andy Trimlett has put together a great video on this history of Prop 13

http://www.kpbs.org/prop13

which also looks at some of these issues. And one more thing, we also hope to dispel the myth the state collects property taxes. It doesn't. The county collects all property taxes and all property taxes stay in the county. They are split among schools, cities and the county (a few others too). We are working on a chart to reflect where your taxes go, We are also working on some stories about education and prop 13. Your comments are all really helpful. I can ask some of these same questions on your behalf when I interview various experts and officials. Keep them coming. Today marks the beginning of our coverage which will end in a half hour TV show Monday March 29th at 9pm. Joanne

( | suggest removal )

Avatar for user 'drjwtaylor'

drjwtaylor | February 23, 2010 at 5:06 p.m. ― 4 years, 9 months ago

Dear Joanne, I don't understand your point. Your figures say that 92% of all California households have purchased their homes sometime after Prop 13 was passed. (I happen to be one of them.) So all of their property taxes are based on what they paid for the house. If that is true, how does Prop 13 limit their taxes?

Secondly, I understand local communities collect property taxes. What I am saying is that the entire state has, basically, three sources of significant income and the important point is how they are shared around.

( | suggest removal )

Avatar for user 'GAPsquared'

GAPsquared | February 23, 2010 at 8:03 p.m. ― 4 years, 9 months ago

Prop 13 has allowed many homeowners who purchased their home before 1978, to avoid having their tax bill rise along with escalating property values. In principle it makes sense: don't penalize those who purchased and held onto their owner-occupied residence. As people age and retire their income usually levels off and then declines. Aging homeowners shouldn't be forced to sell or borrow against their property simply to pay property taxes.

If, however, the rate of tax revenue needed to run state and local governments rises, the rates at which ALL homeowner's taxes are assessed should rise as well. If particular homeowners cannot pay the increases, they should be able to petition for an abatement (delay) of the payment of any increase based on an income or liquidity-based formula.

This could work like when Medicaid or Medical pay for a patient's end of life healthcare costs in return for a lien on the patient's real estate holdings. The dying patient's spouse is allowed to live in their family home until they die, with the outstanding amount paid before any funds are distributed from his/her estate.

The local or state government could carry the "abated" property tax payment(s) as a receivable, and either collect them after the homeowner and his/her spouse die or sell the subject property, or the state could sell the receivable to an investor in advance of that date at a discount on the face value of the receivable.

The moratorium on property tax rate hikes for pre-1978 residences turned into rental properties, as well as on Commercial office or industrial real estate, has none of the redeeming qualities of the Prop 13 features mentioned above for homeowners. These should be abolished as soon as possible.

If Prop 13 is a "third-rail" for elected officials, we'll just have to use the ballot initiative process to fine-tune the unfair features of Prop 13.

( | suggest removal )

Avatar for user 'fairquest'

fairquest | February 23, 2010 at 10:07 p.m. ― 4 years, 9 months ago

Prop 13 was the worst. It shifted taxing away from a land tax, the most transparent, fair and beneficial form of taxation.

The better way to have solved the tax-increasing problem in an inflating market would have been to make property (or better yet, just land) taxes budget adjusted. Any government entity, say a school district, or city, budget could be divided by the total property/land value within their jurisdiction. This ratio becomes the rate each taxpayer pays. An example of how this works; if land values rise while government budgets remain the same, the ratio would automatically adjust down and your taxes, as they should, will remain the same.

Instead Prop 13 has virtually eliminated the land portion of taxing. My home property that, with no improvements, would easily be worth $500,000 is taxed at $30,000. And what about commercial property? One year after Prop 13 the state legislator added a loophole that allowed large commercial landholders to setup land-owning partnerships that could effectively transfer the land by selling the partnership and not have the land value reassessed. This was done without the super-majority vote of the people that prop 13 mandated. Consequently we subsidize the commercial real estate industry leaving a larger tax burden on incomes earned by the work of all other industries. As a result, there is no shortage of commercial properties; of drug stores, big boxes, shopping centers, banks, etc. and that’s good. But schools, parks and libraries are not doing so well. A healthy State like ours should have, and at onetime, did have, both. Could it be that Prop 13 has changed the market-balanced economy between private and public investment that once defined our State?

( | suggest removal )

Avatar for user 'aaldorothy'

aaldorothy | February 24, 2010 at 10:19 a.m. ― 4 years, 9 months ago

Losing prop 13 protection in California would probably generate greater loss of homes than we have seen as a result foreclosure crisis. If my property tax was any higher, I could not stay in my home.

No one has mentioned that when a person improves a home, the property tax is raised. The tax goes up each year anyway, but it does not reflect the often out of control increases in property values.

And what about all that money we were supposed to get from the Lottery? Remember, "Our schools win too"?

Dorothy

( | suggest removal )

Avatar for user 'SDTripp'

SDTripp | February 24, 2010 at 3:25 p.m. ― 4 years, 9 months ago

Just say NO ~ If any politician touches Prop 13 she should be gone !

Getting the cart before the horse is my first reaction.
Cut spending on those that don't deserve taxpayer funds ~ !

Most of the proponents of rolling back Prop 13 speak to schools and funding. They don't site the costs to we taxpayers who are forced to educate many illegal aliens in our dear state of California. If we could stop the wasteful spending that rings out from Sacramento, let alone recoup the funds that go to illegal persons for education and other services we could serve our legal citizens without the drum beat from these parasitic ever searching Prop 13 bashers and spenders. They always want more funds to give away to illegals at the expense of US citizen children and their education. If we got serious about ferreting out persons who are gaming our education system we would find we had lots of money for our citizen children. Start in San Diego County and you would be amazed at the cover up by the school districts who shield and actively hide the truth of teaching illegals, but will plead for more money for teaching the children.

Isn't it time we took care of our own citizens in California and get real about our financial balance sheet. When will the politicians get to dealing with the spending side of the ledger and realizing we can't be the chumps for others any longer? We taxpaying people are being ground down to the lowest denominator and we simply can't be the good time Charlies where come one come all to the trough is a viable mantra any longer.

So ~ bottom line ~ leave Prop 13 alone or you will be sent home!

( | suggest removal )

Avatar for user 'KingSnake'

KingSnake | February 24, 2010 at 5:30 p.m. ― 4 years, 9 months ago

I think it's clear by some of these comments that generally people do not understand the specifics of Prop 13. For instance, some people think it only applied to properties purchased prior to 1978; others, like drjwtaylor for one don't understand that even though 92% of properties were purchase post-1978, those properties are still protected by Prop 13 in that -- say they bought a house for 150K in 1983 and now it's worth $750K -- they still pay tax based on the $150K. So it has limited funding.
In your show you need to list what Prop 13 does. For instance in this interview the "2/3 majority" is not explained -- just commented on that not many people know about it.
Also I agree with the people that it's important to understand how California spends its money and how it compares to other states and the impact in their education. Regarding the comment above about Belgium -- comparison to other countries is fine as long as it's really relevant. I'd venture to guess that Belgians pay much higher taxes than Californians, so that could have secondary impacts to education.
I'd like to see a chart reflecting California's annual spending per student (corrected for inflation) from 1970 through now -- does it really show a drastic dip in spending post Prop 13, or did the state make up for the spending lost via other measures. On top of that I'd like to see California quality of education (compared to other states) and/or Student scores. How related are the two?
Another interesting chart would be a PROJECTED annual spending per student based on property values had Prop 13 never passed and all the rules of 1977 applied; compared to the actual spending.
Lastly -- what I didn't hear is any discussion of the question on how/if Prop 13 affected California budgets in terms of did it really bring on all the "budget spending by Proposition" that seems to have shackled the state, or is that a fallacy.
Given the climate, no one will repeal any part of Prop 13 that would cause an increase in home OR business property taxes. People in this state never vote to raise their own taxes ... but maybe we could just repeal Prop 13 for smokers, those propositions always pass!

( | suggest removal )

Avatar for user 'nenebird'

nenebird | February 24, 2010 at 9:40 p.m. ― 4 years, 9 months ago

A couple of things need to be addressed before any reconsideration of property taxes can be discussed.

We have such a polarized political process which has produced horrendous budget deficits, a plumetting bond rating and general political gridlock. Would anyone really want to give our legislature access to more tax dollars? They have demonstrated incredibly irresponsibility to date, that I simply don't trust them.

For many, affording a home is a big step. With way to rely on the amount of property taxes, many would be priced out of homes. This is the core issue that made the taxpayers revolt.

Sacramento's callous disregard for what they were spending. CA has 1/7 of the US population but 1/3 of the welfare recipients, a $12 billion illegal issue, and wacked out income tax system. We have legislators who have proved to be capable of only one thing - spending money we don't have.

I would not suppport any recission of Prop 13 till our state politics cleans up.

Frankly I don't see it happening till we bite the bullet the move to public funded elections. The legislature didn't get it when we passed prop 13, term limits...We don't want career politicians. We want solution to state problems.

( | suggest removal )

Avatar for user 'ssteamer'

ssteamer | February 25, 2010 at 7:38 a.m. ― 4 years, 9 months ago

I recall that the key message of Prop 13 supporters during the 1978 campaign was that Prop 13 would help seniors stay in their homes; protect them from large annual increased in property taxes each year. I don't recall hearing about businesses benefiting from Prop 13. In fact, I learned just a few years ago that Prop 13 applies to businesses. I've since heard that when businesses are sold, lots of paperwork is is often created to assure that the current Prop 13 basis stays with the property; i.e. that the transaction is not recorded as a new owner in the county's property roles. If so, this type of transaction should be stopped.

( | suggest removal )

Avatar for user 'philosopher3000'

philosopher3000 | February 28, 2010 at 5:03 a.m. ― 4 years, 9 months ago

We had a STATE BUGET SURPLUS before Prop. 13, we had the best schools in the nation before Prop 13, we had libraries before Prop. 13, we had a working state political system before Prop 13.

We need to close the Tax Loophole for the rich. Close the loopholes, why don't people who own property pay the same rate? When the value of your property doubles or triples in a decade, you just won the lottery! Why shouldn't you be taxed at 1% on that win-fall!

People who owned their home in 1976 and passed it on to their children and grandchildren, who will pass it on to their kids are now LORDS of the LAND, who don't pay their fair share of the cost of public schools, libraries, and hospitals.

Corporations are set up as HOLDING COMPANIES, Shells that avoid their fair share of property tax.

http://obamaed.blogspot.com/2009/01/prop-13-after-31-years.html
http://www.lifeguardadventures.com/mer/documents/Prop13brief.pdf

( | suggest removal )

Avatar for user 'sbourg'

sbourg | March 2, 2010 at 3:55 a.m. ― 4 years, 9 months ago

Gee, what a surprise -- a professor in the UC system doesn't think the state govt spending has run amok the past 10 years! What inquiring minds want to know about this "sociology" prof, is this: How much do the taxpayers pay you, how much pension are you earning each year payable at what age, and how's your health insurance coverage? Any other unsustainable pay and benefits you get? And you all have the nerve to think that the problem is the state doesn't receive enough taxes from its private sector citizens. Jeezus. It is real difficult listening to logic like yours. I'm glad I moved out of the state. By the way how's that excess $2B/month by the state coming along? Answer: Not well......think of Greece. The only solution for sustainability in Calif is for state workers, (yes, including non-essential 'ees like Sociology profs) to take a 20% pay cut and freeze the Defined Benefit pension accruals, and revert to a 3% 'er match like the private sector gets. But of course Sacramento and the state 'ee unions will resist this until Armageddon hits. Which isn't too far off. See patrick.net postings this week.

( | suggest removal )

Avatar for user 'sbourg'

sbourg | March 2, 2010 at 4:04 a.m. ― 4 years, 9 months ago

I meant, above, obviously,.....California's excess $2B/month SPENDING. And you all should get out of your liberal fiscal mentality and see what fiscal insanity is wrought by more and more govt spending and more and more tax burden on private sector including our children's future working careers.
Oh, www.patrick.net had an article yesterday (3/1) from the UK Telegraph describing an analyst's opinion that California is in trouble like Greece. Too bad it takes UK newspapers to tell the truth.
Hey folks......wait til more baby boomers retire (like me when I'm 60). We'll be moving to the LOWEST tax states, and guess where that WON'T be? Right..won't be Calif, NY, NJ, Md, etc. Which will cause more problems for prolific spenders like Sacramento, Albany, etc.

( | suggest removal )

Avatar for user 'aakno'

aakno | March 2, 2010 at 7:15 a.m. ― 4 years, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

( )

Avatar for user 'aakno'

aakno | March 2, 2010 at 7:20 a.m. ― 4 years, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

( )

Avatar for user 'JimR76'

JimR76 | March 2, 2010 at 7:47 a.m. ― 4 years, 9 months ago

In the 10 years between 1999 and 2009, inflation raised prices 39%. Over the same period, California's budget increased by 145%. Only PBS would have the stupidity to bring repealing Prop 13 is a solution. Only PBS is so out of touch with people who actually pay taxes that they think this is a conversation worth having. I am completely outraged and disappointed.

No serious person could think we should raise property taxes on new home owners. California real estate has always been expensive, even before prop 13, and limiting property taxes to 1% only begins to make them reasonable.

The argument then seems to be that we should raise taxes on widows who have been living in their homes for 35 years. Sure, let's fund schools by taxing the hell out of 80-year-old women.

What a complete joke.

( | suggest removal )

Avatar for user 'JimR76'

JimR76 | March 2, 2010 at 7:51 a.m. ― 4 years, 9 months ago

BTW, I love it when reporters interview themselves and pretend its news. I think you two should try having this conversation with someone who didn't decide to work in public television.

( | suggest removal )

Avatar for user 'jrlongwell'

jrlongwell | March 2, 2010 at 8:34 a.m. ― 4 years, 9 months ago

It seems that several commenters here assume the Prop. 13 benefits the homeowner.

I have been dissuaded from purchasing a home in CA, and Prop. 13 is one of the reasons--as one of the callers mentioned, new homeowners subsidize those that have owned their homes for longer.

Can any of the proponents of Prop. 13 here state why this is a good thing?

( | suggest removal )

Avatar for user 'jws'

jws | March 2, 2010 at 8:50 a.m. ― 4 years, 9 months ago

Government just wants to spend, spend ,spend. If prop 13 goes away, all hell will break lose. There is no way it will be repealed. Here's an idea for the California government...QUIT SPENDING MONEY ON STUPID PROJECTS and WELFARE...also...QUIT GIVING OUT HUGE PENSIONS! 1% of the home value is plenty for these thieves!

( | suggest removal )

Avatar for user 'JoeG9100'

JoeG9100 | March 2, 2010 at 11:07 a.m. ― 4 years, 9 months ago

I don't think removing Prop 13 is a good answer to California's problems. House evaluations are just too High. Sure you may pay only one and a quarter percent But that is a Lot! As an example I have a house in Austin TX we pay about 3%. However it's an old house (1970) On a 1/3 acre in 36 hole golf course area inside city limits so it is rural bur still in a city. So what would a similar neighborhood cost in say Rancho Bernardo or Saratoga or Los Altos? I bet you will be paying more than 8 K a year on a similar 2700 sq. ft house. So taxes are high. That's if you coming in of course,if you have been there 30 years that's where Prop13 is unfair. No one said Prop 13 is all that good for the residents. To remove it some folks Tax bills may go from 11K to 30K. If they are still making a house payment you could end up in foreclosure. Not to mention the effect of increased taxes will have on property values. Ca. Government is huge so huge it could almost function as it's own country. They need to cut back the government itself. To the bone if they have to.

( | suggest removal )

Avatar for user 'storhund'

storhund | March 2, 2010 at 12:35 p.m. ― 4 years, 9 months ago

What drives me crazy is seeing wealthy old people living in multimillion dollar properties and paying $1,000 in property tax. I grew up in southern California and then spent 10 years outside the USA and 6 years in Texas so I've seen a few tax systems out there. What CA does with low property tax and high income tax is discourage work and encourage high property values. So we get unemployment and high housing prices which is where we are. Taxes should be fair and there are ways to modify prop 13 without forcing people out of their homes. How about increasing the rate of increase per year above 2% and making exceptions for people below a $75k income level? We should also do away with the loophole where we let parents transfer the low tax level to their children.

( | suggest removal )

Avatar for user 'grconrad'

grconrad | March 2, 2010 at 4:31 p.m. ― 4 years, 9 months ago

While it's true that CA needs to reign in its excessive spending, it is also true that Prop 13 is ridiculous and should be overturned.

There's more than one way to do this, and no one is talking about taxing the heck out of 80 year old women like JimR76 implied. Bringing property taxes for all homes in line with a reasonable rate is a no-brainer because it's the right, fair thing to do, period. There should be no exceptions for people depending on when they bought a home, or whether they inherited it. If you're living in a home, you're getting the benefit, and you should pay the same as anyone else who is getting the benefit.

What people don't realize is that if property taxes go up, it does not necessarily result in people losing their homes. Mortgages and property taxes are paid out of the same pocket (the homeowner's pocket). If property tax is increased, the mortgage you can afford will drop. That means home values will drop. You have to take a longer view with these things than just "oh my god, someone is going to lose their home today if we change something". Big deal, if you lose your home you can rent. Welcome to reality.

This article does exaggerate the importance of Prop 13 in today's CA budgetary woes, but while we're on the subject, let's treat Prop 13 for what it is - an unsustainable policy that should be eliminated (not just for homes but also for corporations).

( | suggest removal )

Avatar for user 'ThreeBays'

ThreeBays | March 2, 2010 at 7:35 p.m. ― 4 years, 9 months ago

Without Prop 13 people were getting priced out of their homes because taxes were linked to property values. An alternative to Prop 13 would have been to just take property values out of the equation altogether. That would prevent the case of people getting suddenly priced out of their homes because of booming house prices, and it would prevent the counties budgets suddenly going upside down when home prices dipped.

For example if the property tax was linked to sq. footage of a home, then there would not be such volatility in the assessed tax. Tax increases could be more in line with inflation, with credits for fixed or lower incomes. This kind of tax would also be an incentive to empty nesters to downsize, whereas Prop 13 is more likely to prevent them from being able to move.

( | suggest removal )

Avatar for user 'centauri'

centauri | March 3, 2010 at 12:37 a.m. ― 4 years, 9 months ago

I agree that taxes should have no link to "value" which is an arbitrary and capricious measurement. The cost of the property has no direct relationship to the services that it is provided with by the local government.

The only fair tax is an occupancy tax or flat tax that in some manner establishes a baseline level of services that are tied to occupancy. For example, if you had a housing unit that is an SFR, you would have a zoning restriction that only allows for one family to occupy it, and the services extended to the occupants would be based on the level appropriate for only one family, for example public school education available to only two children (more you have to pay for), things such as that, are fair.

Property in most cases is not for profit. People live there. So the idea of collecting an ad valorem tax, which was appropriate back in medieval times because it taxed the productivity of an estate (like a gross receipts tax), makes no sense to us moderns - we dont derive income from our homes that we live in.

Also, dwellers in MFRs get a huge subsidy. Those structures should be taxed based on their SFR equivalent. So if you have a family of 4 on the lease, it needs to be taxed like any other baseline SFR. And that could all be tied into things like school records and assessments for services.

( | suggest removal )

Avatar for user 'sbourg'

sbourg | March 3, 2010 at 3:54 a.m. ― 4 years, 9 months ago

MEMO TO FISCAL LIBERALS: Workers who don't work for the govt, should not be thought of as the 'cash cow' for govt. Taxes and govt services and pay/bfts for remaining govt workers should be slashed. And in a perfect country, the land/property/house we own, should be OURS. It should NOT be taxed. The Constitution gives rights to landowners to be secure in their ownership from unreasonable search and seizure. Ergo, it could easily be Contstutionally argued, that property taxes violate the Constitution. We should not basically have to pay rent to the govt to keep our property. For proof of that statement.......what if govt doubled the prop tax and it became unaffordable for the owner? Guess what......that happens.......many counties in NJ. Prop taxes are a travesty. Period.

( | suggest removal )

Avatar for user 'mickrussom'

mickrussom | March 3, 2010 at 11:39 a.m. ― 4 years, 9 months ago

Prop 13 isnt killing CA. Communist profligate spenders in the state assembly/senate and idiot governors that allow spending beyond revenues and idiot pensions for fire, police teachers and state/county employees are 100% of the reason CA is dead.

It has nothing to do with prop 13. It has everything to do with criminals in the assembly and senate spending more than revenue. Simple. Simple. Simple. The people who have voted to spend more than revenue should be jailed once freedom and liberty are restored.

( | suggest removal )

Avatar for user 'frankmas'

frankmas | March 3, 2010 at 5:11 p.m. ― 4 years, 9 months ago

This is a perfect example of Bussiness ripping off the People. Prop 13 should have only applied to homestead exemption properties, not income property.

It should have been set up similar to a reverse mortgage, the heirs should not be getting a free ride and get rich off of the hard working tax payers.

If I own an apartment building for 40 years, I use the same services fire, street etc. as you the new owner of the apartment building next door. Why should I be able to charge a lot less for my apartments then you.
This is pure WELFARE for the commercial sector.
SURPRISE SURPRISE SURPRISE

( | suggest removal )

Avatar for user 'panchoberumen'

panchoberumen | March 29, 2010 at 10:20 a.m. ― 4 years, 8 months ago

Why is KPBS's focusing on Prop. 13? Clearly you want to change it. Why not feature the way schools spend money on issues other than the basice of reading, writing and math? One caller to "These Days" also has asked you to look at how the school districts over pay the upper echelons. You seem to blame Prop. 13 for all the budgetary ailments of CA. Why not look into the way CA spends money on social engineering projects, incl., e.g., abortion? The multi-million dollar abortion industry lists abortion under other titles in order to get paid by CA. Are schools really the appropriate place to help the poor feed their children? Indeed, questioning Prop. 13 is, as one caller said, opening Pandora's Box, but if KPBS follows all the leads, a great service indeed can be provided to the public. I doubt, however, that the biases of KPBS will allow you to do that in fearless breadth.

( | suggest removal )

Avatar for user 'enuffnews'

enuffnews | March 29, 2010 at 11:48 p.m. ― 4 years, 8 months ago

It is clear that those who at the time as well as those who still support Prop 13 live with a southern philosophy. Does anyone even realize Jarvis put the state of California on the same path as Orange Country for which he lived. The very county that filed for bankruptcy and it would seem the state of California is on the same path.

I myself was born in a state that prides itself on low taxes while it citizens are rated 50th in every category of Economics, Education and Jobs. I've also lived in 3rd world countries were the majority of the people do not pay taxes, a great majority are forced to leave their families behind for years and its military is unable to defend the nation.

I agree accountability is a must for politicians but for the people to dumb themselves down to the level of the southern states is tantamount to self destruction. An ignorant populace is a populace with no freedom, like the lady side in the segment, you have the you on your own and we're in this together. A people united can kick the bums out of office and a divide people will have a legislature like what exists today in California.

The retired bunch froze California and is basically allowing it to die with them. States like Texas is soaking up lots the California Industries without Prop 13 and its seen as one of the must favorable tax states in the nation. I bet most Californian didn't know Texans pay as high as 3+% in property Taxes like myself.

Cost of living in California is hindered by Home prices, its the core and there needs to be a balance. For example Senior should be given a Tax exemption based on age, homestead and eventually grandfathered out of paying property taxes based on income. For all of you who think home prices can rise forever, wake up, the current economics are your wake up call.

( | suggest removal )

Avatar for user 'randolphslinky'

randolphslinky | March 31, 2010 at 9:13 a.m. ― 4 years, 8 months ago

Interesting comments here, and obviously a lot of strong feelings on the subject. CA along with a few other states has a huge number of people who are here illegally and therefore are flying under the tax radar while their children go to school here, among other things. I constantly hear about how the schools are over crowded, and we need more money for more teachers, and so on, and so on. That's typically also when you hear about some attempt to create a new tax or increase a tax to meet the demand. As a person who grew up in a small town with far fewer resources and money in the community, I have been amazed by how much this state can't even provide the kind of basic things that I took for granted growing up. And now look at CA's Universities. It's an inevitable chain reaction. Is altering Prop 13 the solution? I think we need to dig a little deeper, it requires more work, and it's messy, but the problems of this state aren't going to get better if we keep walking around this elephant in the room. It's obviously a whole pie of problems, and a huge slice is the illegal immigration problem. Either you change the status of people who are here illegally (someone else work this one out), or you have to stop allowing people to pour in and suck on the teat of the rest of those paying taxes for infrastructure, schools, medical, prisons, and everything that keeps CA running and civil.

( | suggest removal )