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Prop 13: The Battle Between Taxpayer and Taxes

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Aired 4/1/10

For the second year in a row, the County Assessor is predicting San Diego will collect less in property taxes because of the housing crash. It’s a win for taxpayers who will pay less – but a loss for the county which relies on property taxes to fund schools and other services.

— For the second year in a row, the County Assessor is predicting San Diego will collect less in property taxes because of the housing crash. It’s a win for taxpayers who will pay less – but a loss for the county which relies on property taxes to fund schools and other services. This battle between taxpayer and taxes has been long fought in California. It began 32 years ago with a ballot initiative called Proposition 13.

The Legacy of Prop 13 on KPBS TV

The Project Envision documentary, "The Legacy of Prop 13," airs Monday, March 29th, at 9 p.m. on KPBS TV

“I hauled all these rocks from the mountain over there when I came home from work every night and every weekend,” 82-year-old Frank Taylor says as he points to the retaining wall that surrounds his yard and describes how he built it rock by rock.

In fact, nearly everything in this yard – the wooden tulips, bird house, and giant butterflies – was built by Frank, a retired Sears repairman. He and his wife Cathy bought this house in 1962 for $13,000.

“Of course I was only making $75 to $80 a week, so even then you wonder how you’re going to pay for it,” Taylor says.

In the past four decades, the Taylors’ house has increased by more than 30 times in value.

“I’ve heard that these houses around here go for $400,000. Can you imagine a house selling for $400,000,” Taylor says.

Despite the value of the Taylors’ home increasing so dramatically over the decades, their property tax bill has not. They pay $400 a year. And that’s because of Proposition 13, a ballot initiative passed in 1978.

David Butler is San Diego’s County Assessor.

“The only time we can reappraise property is when there is a change in ownership or when there is new construction,” Butler says.

Prop 13 locked in property assessments at 1 percent of the purchase price, and limited yearly increases to 2 percent. The result: California has among the lowest property tax rates in the country. In fact, more then half of all the homes in San Diego County are assessed below market value.

That may be good for the taxpayer – but it's bad for schools, firefighters and police departments. They rely on property taxes for funding.

Howard Jarvis led the campaign against rising property taxes in 1978. He sold Prop 13 as a way for taxpayers, especially seniors, to stay in their homes.

”We have a new revolution against the arrogant politicians and insensitive bureaucrats whose philosophy of tax, tax, tax, spend, spend, spend, elect and elect and elect is bankrupting we the American people,” Jarvis said.

But more than 30 years later, experts agree, Prop 13 is one of the reasons California is in a fiscal crisis.

Isaac Martin is a sociologist at UC San Diego and the author of two books on Prop 13.

“In the long run it really did have the effect of limiting local governments' ability to tax property, and that has resulted in limited resources for things like school districts, libraries, and local government services,” Martin says.

The shortfall is most acute in education funding.

Julian Betts is an economics professor at UCSD. He says Prop 13 is one of the reasons California schools are under-funded relative to the rest of the country.

“In absolute terms there was a mushrooming in the pupil-teacher ratio in California in the years immediately after Prop 13,” Betts says.

California has a 21-to-1 student teacher ratio, one of the highest in the country. Compare that to a state like New Jersey that can raise property taxes when it needs more money for schools. The student teacher ratio there is 12-to-1. But New Jersey homeowners pay more then double per capita in property taxes then in California.

Back at the Taylors’, Frank and Cathy’s kitchen door is freckled with notches – the heights and names of their kids and grandkids carefully recorded by each hand-carved mark.

For the Taylors, the dilemma between taxpayer and taxes comes down to this: “We wouldn’t have a roof over our heads if we had to pay the property taxes they have now,” Cathy Taylor says, “if it wasn’t for Prop 13.”

Comments

Avatar for user 'maxthor'

maxthor | March 30, 2010 at 10:03 a.m. ― 4 years, 6 months ago

Repealing Prop 13 is not the answer. California taypayers need to stop paying for the education of Illegal Mexicans and stop paying for their health care. This would save Calif billions a year. The pension benefits of Teachers, Prison guards is the highest in the country, put an end to this as well. Californians are the highest taxed in the country. It is time to start throwing out all of the Democrates in Sac town and start over with people who have Calif taxpayers in mind.

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Avatar for user 'InTheMiddle'

InTheMiddle | March 30, 2010 at 10:53 a.m. ― 4 years, 6 months ago

Taxed to death? Not hardly. I was in California when 13 passed and the logic of most voters was something like 'Geez - if I pay less taxes, I'll be able to buy more....' No one I talked to seemed able to think beyond their own nose. Taxes were indeed a problem, but 13 was not the right solution.

No we can't fund the schools to the level needed. Even in my kids fairly wealthy district, the parents are kicking in a grand or more per kid per year to pay for science and music classes. The UC system is a shadow of its former self and doesn't have to capacity to meet its mission - educating our kids. Forget research, which was a huge contributor to our economy.

Want fire services with out brownouts? You have to pay for them. Same for police, libraries, streets, water, you name it. NONE OF IT IS FREE.

Throw out the Dems? Repubs are as bad or worse. And no, its not those evil mexicans either. Stop using them as a whipping boy and look in the mirror. Stop screaming that you are taxed to death, you aren't.

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