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Original post made
on Mar 16, 2012
TO: Assembly member Sally Lieber: You can forget asking for more peoperty taxes money ala Prop.13 to pay for your left wing pet projects as it will be dead before arrival. Quit politics and work for a living.
What Gary said. Lieber, please just go away.
Note that it is the owner of the property that Trader Joes leases that is paying less than the owner of the small residential property cited in the article. Prop 13 has many flaws and the lack of commercial property reassessment is just one of them.
You are grossly naive if you think commercial property is the only thing she will try to go after under Prop 13. She'll hit parent-child exemptions as well. She's angling for all the newly arrived that don't like paying the high property taxes that they agreed to when they bought their homes. After all, she's the one that tried to outlaw spanking a few years back. She wants to get involved in every aspect of your life and wealth.
How about also shining a light on tax 'cuts' that aren't? The worst thing about Prop 13 was that it put local property tax revenues into the hands of non-local politicians. For example, there was the so-called Vehicle License Fee reduction, that has been paid for out of educational funding. You won't find VLF on a line item anywhere, but it means that, for example, Los Angeles County backfills its VLF "reduction" from its Educational Revenue Allocation Fund, then goes to Sacto (= our income and sales tax $$) for $.72 of school funding for every $1 of property tax it raises in LA County. Those of us in San Mateo and Santa Clara Counties pay enough local property taxes to fund our basic-aid schools as well as our so-called revenue-limit schools -- and get just $.10-.16 per local $$ from Sacto to backfill the VLF swap and categoricals. It seems like Republicans will never 'fess up to the cost of tax cuts, while Democrats will never address spending. Is Lieber signing up to do both?
Observer, if you want to really look at those who "... don't like paying the high property taxes that they agreed to when they bought their homes" and commercial property -- then look at the 1975 base year taxpayers.
They bought 3+ years before Prop 13, when taxes were going up 5-10% a year. That was what they agreed to -- then they voted themselves a big exemption.
Most of us agree, some reluctantly, to subsidizing retirees who are in their homes -- that's who social welfare is for -- but subsidizing commercial property owners who're paying a pittance while charging full market rate? Get real.
New property owners (50% or more in Santa Clara County are currently assessed at market) provide a nice umbrella for real-estate holding companies to shelter under. Why do we give the least dynamic 1%ers an edge over the most dynamic parts of our economy?
And, since you mention parent-child exemptions, please explain why someone who inherits a house is more deserving of a subsidy than someone who buys one? Especially since, a large portion of the time, they turn around and rent it out?
Sally should be ashamed of herself for making such a gross gender-biased statement stereotyping women for their apparent lack of fund raising ability. Maybe she just isn't offering anything of worth to us.
Gary, Ned and KD got it right. Sally is is a wholly owned subsidiary of the unions, bought and paid for. In her budget cut world, you will never see one penny taken away from her union supporters.
As far as prop 13 is concerned, any tinkering with that law will not be in our best interest. Commercial properties are an easy target as they don't turn over as often as private homes, and once the camel's nose is under the tent with commercial properties, they will start looking for more revenue and that would be us.
Our state is upside down financially, and feeding the hungry monster in Sacramento is not going to solve the question. Sally, just go away!
Go Sally! I'm a homeowner and I would love to get rid of prop 13. It's time for the rich to pay their share and stop hiding behind the skirts of the elderly. There is no reason for struggling new homeowners in their 30s to be paying three times the property taxes of someone in their comfortable 50s. Shame on the boomer generation for taxing the younger generation so unfairly.
Connie who owes you? Make your own way in life. Don't you think those people in their comfortable 50's earned where they are and paid way more than the generation before "them" in housing and taxes? Back in 78 when I bought my first house in Mountain View the interest rate was 13.75 percent. What is yours? Maybe 6 percent? The world owes you a living but you have to work to get it.
By any standard, most of our neighbors are living extremely comfortably. I will gladly pay more in taxes to support our public schools, infrastructure, and invest in the future: our young people. You don't know me, but my parents lived just above the poverty line and through sheer hard work and the help of public education, I was able to go to Stanford and find very rewarding work. I believe in investing in the public sphere because it invested in me, invested in most of us. If CA is to succeed, we need to keep investing in the future of our communities, but it will require wisdom and shared sacrifice.
Ditto for everyone I know when we were young and now. None of us started out extremely comfortable.
You should be answering your own question.
There is no legitimate or logical reason why neighbors should see such a disparity in their property tax bills just because they bought their homes at different times. "I got here first, too bad for you..." is not an acceptable reason. And I use the term "home" loosely, because many homes now owned under Prop 13 are being rented out as opposed to sold by their owners, because of the tax shelter Prop 13 provides. The fact that no other state in the Union has such a draconian cap on property taxes is more proof of its folly.
I don't advocate drastic changes to the existing proposition, only because making anything other than gradual changes would send a shockwave thru an already fragile economy, plagued with an ailing budget. An argument could also be made that among other factors, Prop 13 has contributed to the budget mess we are currently in.
Small changes are the way to proceed, and focusing on re-evaluation of commercial properties is the right place to start. For reasons why this would be a good idea, see this past article in the MV Voice.
And yes, I am a homeowner, that benefits from Prop 13. But the benefits I receive personally from this law, do not outweigh the collective damage it does to our State's economy, infrastructure, and educational system.
In a perverse sense Prop 13 is robbing the future potential of California, to subsidize the past.
Kudos to Sally to taking on the prison-industrial complex. It's because she's not beholden to anyone, not the developers, not the unions, not the corporations, that they won't pump money into her campaign. I sure hope she becomes my next state senator, because it would prove that money isn't everything in politics. We need Sally's independence and creative solutions (like her budget cut contest) to break through the entrenched interests in Sacramento.
I agree that Prop 13 needs to be re-evaluated. It has become a huge benefit to some property owners at the expense of others. Some provisions need to be made for homeowners to not get taxed out of their homes, but, as usual, it has been gamed by some of those who have the most wealth as a way to avoid paying their fair share.
I also agree that Prop 13 needs revision. I voted for it because I believed the worst feature, the 2% cap on inflation, was so draconian and so unfair that the State Supreme Court would rule it unconstitutional. Unfortunately, they did not and we're stuck with it. In retrospect, I wish I had voted against it.
Hardin is right that changes must be slow and gradual to have any chance of success. Considering that it has been several years since actual inflation exceeded 2%, merely eliminating the cap might be a good way to start. (In Prop 13, inflation is not inflation in the cost of housing but inflation in the cost of living; during the housing bubble, Prop 13 inflation, even without the cap, was much less than the rate of inflation of housing prices.)
You are all dreaming if you think Prop 13 will ever be changed just because Lieber declares she's against it. It's easy to talk about it here in Silicon Valley, but the vast majority of Californians depend on it.
Here's some dumb questions: To all those homeowners complaining about their high property taxes, why did you buy then? Did you plan them in your budgets? (It seems that you must have since you ended up buying your homes) Aren't you really more upset at all the other home buyers you've had to compete who have driven up the price of homes instead of just the property taxes? If you bought your expensive homes with high taxes, you must have been pleased with your purchases. Or are you just upset now because you think your older neighbors must be paying less than you? When I bought my home 18 years ago, I thought it was too expensive and the taxes were too high but I decided it was a good investment and it was.
"Here's some dumb questions: To all those homeowners complaining about their high property taxes, why did you buy then?"
Your premise that people are complaining of high property taxes is completely off-base. The posts here are consistent in stating what the problem is: artificially low property taxes for SOME due to Prop 13, at the expense of everyone else. It is the disparity between the property taxes assessed on similar homes, based solely on length of ownership, that is ridiculous and unsustainable.
Every homeowner benefits from rising home values, which have risen unabated due to market forces. This is not the case with property taxes, because of Prop 13.
You can't expect to have laissez faire home values but suppress your property taxes and expect people to think that's a reasonable setup for society as a whole. The benefits received by a few with Prop 13 reverberate as a drain on others.
"You are all dreaming if you think Prop 13 will ever be changed just because Lieber declares she's against it."
I don't think Prop 13 will change because a politician decides to make it a campaign slogan.
Prop 13 will be changed when a critical mass of enlightened homeowners question its value, and conclude that its long term effects on California are worse than the short term benefit gleaned from it.
And from what I've witnessed over the years, the list of people questioning it is growing.
I have to take exception to the Prop. 13 bashing that seems to be taking place. Many of us would not still be in our home, or would not have been able to purchase one in the first place, if not for Prop. 13. My husband scrimped and saved for 5 years to accumulate enough for a down-payment on our home, then was treated to an interest rate over 10%. His income just made the house payment plus living expenses. He wanted the American Dream and he did everything in his power to attain it. Flash forward almost 30 years. Our kids are grown. We will not be able to retire for many, many years because we put our children through college so that they could have their American Dream as well. We will be on a very fixed income when we finally can retire, and the lower taxes that we pay on our home due to Prop. 13 will go a long way to realizing that goal. We are not part of the "greedy 1%". We, as is the case with many couples trying to retire, just want the opportunity to do so. We have done our part in voting for all of the bond issues that came down the pike for our future generations of kids, even though ours have been out of the school system for years. We support many worthwhile charities, in spite of my poor health and inability to work. Lumping Californians like us into a group of people that are in some way "shirking" our civic responsibility is thoughtless and not grounded in any kind of fact. We were able to purchase a home because we knew that Prop. 13 would be there for us in our "golden years", just as it will be in place for the families who are able to purchase million dollar plus homes now. Not all cities are like the ones in the Bay Area. Living here with the ridiculously high-tech salaries means that housing - as well as gas, food, clothing, etc. - will also be ridiculously high. We have family in the midwest. No high-tech cities to speak of, but you can also purchase a 3000 sq. ft. home on a 1/4 to 1/2 an acre for somewhere far south of half a mil. What does that buy here? A townhouse with no land. So, if you want to live and work here, there is a price to pay today, as well as years ago when we purchased. We made sacrifices to live here and give our children what we never had. I, and many Californians, are extremely grateful for Prop. 13 - and I will not apologize for my feelings. Oh, and almost everyone who I know here are home owners and living in their own homes. They are not living elsewhere and renting, nor are they renting from someone else. And, no, I don't run with a "rich" crowd. Our friends are struggling to retire just as we are.
And for the comments that the disparity between neighbors who purchased at different times is unfair, that is, in and of itself, a very unfair label to place on us. Just as it's unfair of us to place labels on you because you drive the latest cars, maybe send your kids to private school, and are able to qualify for a million dollar home on your salary.
And one last question I have to ask all of you - who would you like to have living next door to you? A lot of brand new home-owners who don't know the first thing about our city and it's services, schools, neighborhood history, restaurants, doctors, hospitals, and both the good and the bad of living here? Or someone who does know about all of the above and would love to get to know you and tell you all about it? Don't assume that we are greedy SOB's who are only looking to milk the system and get richer off of the newcomers. We are just like you and struggled just as much to make ends meet - we just started a bit earlier than you did.
"You can't expect to have laissez faire home values but suppress your property taxes and expect people to think that's a reasonable setup for society as a whole. The benefits received by a few with Prop 13 reverberate as a drain on others."
Huh? Are you suggesting that today's buyers are surprised when the get their first property tax bill? These taxes are built into the home's price tag and these buyers knew exactly what they were getting into! And miracuously they still sell like hot cakes around here at ridicuously high prices to people who, guess what...wait for it... can afford the house and the taxes... most likely because their salaries and compensation are calculated to do so. Theses same people also probably pay high income tax as well, until they figure out a way to deduct more and more and more so they pay very little.
"Huh? Are you suggesting that today's buyers are surprised when the get their first property tax bill?"
Nope, read my posts again. None of the posts in this thread are complaints that their property tax is too high. In fact, I agree with you and others that once you purchase a home, you are responsible for all the taxes and responsibilities that come along with home ownership.
The problem with Prop 13 is not that it makes property taxes high for buyers now (though there may be a correlation), its that it has artificially suppressed property taxes for those who've bought in the past, and that the divergence becomes ever greater, the longer you've owned your home.
"Many of us would not still be in our home, or would not have been able to purchase one in the first place, if not for Prop. 13."
If Prop 13 was and is fundamentally about keeping people in their homes, then the following provision should have been included in its statues:
Implement a cap on home appreciation, identical to that on property taxes.
Somehow, I don't think Prop 13 would have been approved if this provision had been included.
I see little difference between Prop 13, and the Greek peoples' penchant for tax evasion.
In both cases, we have an institutionalized entitlement that has persisted long enough to corrupt people into dependence on a freebee, at the expense of public coffers and sustainability, while rendering their populations to be uncompetitive in the global arena.
And those who take offense at this are really missing the point. The point is not that people who voted for Prop 13 or who benefit from it should be labeled as bad people. Its not about the voters, its about the legislation.
With the passage of time, its quite clear now that the consequences of Prop 13, whether intentional or unintentional, are hugely detrimental to the welfare of all Californians, and that it sacrifices long term prosperity for short term gains.
We accuse Wall Street of focusing to much on short term profits and not enough on long term growth; of prioritizing individual gain, over the well being of the market.
Prop 13 does exactly the same thing.
The problem with Prop 13 is that CA is not receiving enough revenue and it will get worse over time. Berkeley is arguably the best public college in the world, but will it be able to hold on to their standards with these huge budget cuts and a freeze on hiring? My friend is doing her post-doc in UCSF and is shocked by how a prestigious medical program is in shambles from lack of funding. She feels ashamed about the quality of care some of the patients are receiving.
Other states handle property taxes in a much more sustainable way. They have better funded infrastructure but their retirees who can't pay their property taxes plan ahead and move into homes they can afford. They don't expect to hold on to their large homes after their kids move out. A worthwhile tradeoff that I'm looking forward to making when prop 13 is dead when I retire.
"They have a better funded infrastructure but their retirees who can't pay their property taxes plan ahead and move into homes they can afford. They don't expect to hold on to their large homes after their kids move out"
Wow. Have you been to our neighborhood? The homes are very small on very small lots. We DID plan for our retirement and chose a very small home that we COULD afford. We never "moved up" to a large home, so we aren't trying to hold on to our "large home", even after our kids have moved out. Even back almost 30 years ago, homes that we were looking at, and scrimping to buy, were north of $150,000.00. Our salaries were shockingly low. We still managed to buy a very modest home and make adjustments. And, yes, we could have moved to a "large house", but we chose to send our children to college instead and give them a leg up in this difficult time. So don't preach to me about holding on to something. Our home is so tiny that when we have more than one or two relatives visit, they have to stay at a local hotel. Sure, we would love a big, rambling home to allow the grandkids and relatives to ramble around in, but we knew that we had to make sacrifices in order to live in silicon valley, and that's exactly what we did. There is a big old world out there that anyone can live in. If we choose to live here, we deal with the good and the bad. Don't penalize those of us that made a well thought-out decision almost thirty years ago and have stuck by it in spite of wishing for more space (and visiting our friends who have that space), so that all of you can feel better about your decisions. There are so very many things that California can do to bring more money into their coffers, and areas where we definitely spend too much money, but this is not the forum for that conversation. However, I'm sure that you all are very informed, intelligent people and already have those areas figured out. Whether or not you will fight for changes in those areas is yet to be seen.
I'm just trying to give you all a different perspective than the one that hits you between the eyes every day. There are those of us who made the decision to live in a tiny home, and stay in that home for 30 years, so that our children could have the things that maybe we were unable to attain for whatever reason. We are not all money-grubbing retirees who are sitting in our basements counting our gold. We are struggling every day to put money away so that we can someday have some time with our spouse after working for 40+ years. The insensitivity shown here is staggering. Why would you put a label on people that you don't even know? Not all retirees, or wanna-be retirees, are loaded. The sooner that you accept that FACT, the sooner a constructive conversation can be started.
Nice that you could go to Stanford and your friend could go to Berkely. Who helped you and your friend pay for that? Since your parents were at poverty level. Mine were below that. As were most of ours. My daughter could only afford to go to Foothill.
And,by the way I do not have Prop 13 taxes.
Really? I am surprised that everyone is complaining about a few thousand dollars a year when you should be complaining about a funky small 1600 square foot 70 year old house costing over a million dollars to buy in Mountain View. Also, drive down California street, stop a person on the street and ask them if they would like to have your "problem".
Reading the various justifications and defenses for Prop 13, there appears to be another current issue that closely mirrors this one:
Prop 13 is to homeowners like pension plans are to public employees.
Nice try, Hardin. Apples and oranges. But if that comment works for you, you stand by it.
I agree with Hardin on that one. Start with public pension reform to restore the public's trust. Then reform the unions' influence over the governor.
"Nice try, Hardin. Apples and oranges."
Really? Let's go down the list, shall we?
1. Both issues were borne from special interest groups advocating exclusive considerations for themselves, whether that's a public union adding language to a labor contract to increase benefits, or voters giving themselves a tax cut, the motive is the same.
2. Both issues draw from public coffers to fund their benefits. And more importantly, the draw from public coffers is projected to get progressively worse over time and affect the public as a whole. This issue isn't going to go away. On the contrary, its going to get worse, for everyone.
3. Both violate free market principles, and thereby distort the relative markets they engage in. Whether its compensation for public vs. non public workers, or home values and property taxes, the result is the same: disparities that cannot be justified on a performance or competitive basis.
4. Both seek short-term gains, while eschewing long term consequences. There seems to be a distinct lack of concern, or worse, a refusal to acknowledge how these "apples and oranges" are going to impact the state as a whole for years to come, if let unchecked.
5. Both encourage gaming of the system. Whether its spiking overtime hours to increase retirement payouts, or renting out a house instead of putting it back on the market and thereby artificially decreasing the supply stock that leads to increased home selling prices, people have found ways around the existing rules and taken advantage of them for their own gain.
These are just a few of the similarities I've seen. Can you elaborate why you think they are "apples and oranges"?
As a property owner I support repealing of Prop13.
Prop13 is wrong. It is unfair. It violates fundamental principles of economics and common good.
Prop13 is not the major reason for real estate bubble. Stockton or Sacramento are under Prop13 too. They obviously have no bubble to speak of right now.
But Prop13 is the reason for the lack of growth. Hundreds of billions of dollars, and probably a lot more, of economic growth opportunities are lost year over year in California because of Prop13.
Repealing of Prop13 can be revenue-neutral initially. But I believe the unleashed growth will lead to better economy in the state as well as better tax revenue for the government.
Absolutely agree Prop 13 needs a MAJOR overhaul, for a start let's remove transfers to children and grandchildren. Agree with Hardin on all points.
So Kathy must be against families passing their wealth from one generation to the next. Best let the government spend it wisely.
To Ned, someone has to pay for police, school, fire, road repair, etc.
If your grandchildren get a good deal and don't pay, someone else will be paying for them. That's just not fair.
The accumulation of wealth has never been fair in the eyes of those who are not wealthy. For some, maybe wealth is achieved by saving on property taxes, for others maybe it's through hard work or a combination of both. For others, maybe it's ripping off the public trust by claiming they are worth above average salaries with golden pensions, for some lawyer types its through winning frivolous lawsuits. So please do preach. But include all, and have Lieber talk about how she's going to solve those problems as well rather than picking on the little people.
"To Ned, someone has to pay for police, school, fire, road repair, etc.
If your grandchildren get a good deal and don't pay, someone else will be paying for them. That's just not fair."
To further James' point, Prop 13 can't be classified as a progressive tax, nor a flat tax; if anything, its anti-progressive. In every meaningful way, Prop 13 rewards those who voted for it the most, at the expense of everyone else, for generations to come.
In a classic sense, it is the epitome of what we would normally call a special interest group, developed solely to further the goals of a select few, at the expense of many.
This is not a class war, its not a race war, nor is it a generational war. It is simply a question of fairness and common sense, and what makes the most sense for California.
Oh, so you are talking about the bloated public sector and their unions in California then?
"Oh, so you are talking about the bloated public sector and their unions in California then?"
Sort of, read my post on March 17 for more details.
And on March 18, for even more details.
The problem here regarding taxes to pay for public services is that so many wealthy people avoid paying taxes through shelters and deductions with a whole industry of lawyers and accountants eager to step up to the plate to provide more and more protections. Prop 13 is one of the few instances whereby the little guy wins and gets to keep his wealth in his property without being bled dry by the government. And if Lieber goes after businesses taking advantage of Prop 13, the only thing that will happen is that costs will be passed on to the little people, many of whom may lose their jobs. Reform should not begin with Prop 13, it should come at the end.
Repealing Prop13 is not about raising taxes. It is about the fair distribution of tax burdens.
Yeah, sure and that's why a guy like Warren Buffet or Mit Romney pay a lower percentage of taxes than more most people. Address that one why don't you Mr. Hoosac. Because that's been going on for much longer.
So let me see if I understand this then: The basis of your argument is that:
"2 wrongs make a right."
In other words, if those "rich people" get to fleece the public, I should get to fleece the public too...
I'm against anyone not paying their fair share of taxes, rich people and normal people alike. In fact, I lean towards a progressive tax. But Prop 13 doesn't even the score when it comes to taxes for the rich or middle class. Its distinguishing factor is only when you've purchased your property, not what your net worth is, not how much you earn.
The only way to justify your line of thought is if you focus on Prop 13's benefits to your bottom line only, and ignore the rest of the facts on how Prop 13 affects others, including us normal folks that subsidize your artificially capped property tax bill.
Okay, I'm going to say what no one else is - let's stop all this bickering about Prop. 13 and place the focus where it should be. We are spending so much of our state's money on the illegal aliens who have and are crossing our borders unchecked. The amounts are astronomical. Everyone knows this is our main problem - it makes Prop. 13 look like play money. Yet we put on our kid gloves when talking about it. Why? If we were to put a halt to all the freebies that we give to them, we would have so much extra money that Prop. 13 would stop being such an issue to so many people. Please just stop and think about this issue before skewering those of us on fixed incomes who can stay in our homes because of Prop. 13.
Been there, done that.
As you can see, changing the subject to one that is even more contentious, and especially one that involves the Federal government is the same thing as jumping from the frying pan and into the fire.
Regardless, its clear both these issues need resolution, not one or the other.
So you can take away your straw man now.
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