From Richard Rider, a local pot-stirrer – HT to DOB:
When it comes to gathering sufficient property taxes, Prop 13 is no problem at all – except for profligate spenders.
Look at the history of my San Diego County – a history which pretty much reflects the history of property taxes in the urban/suburban counties that hold over 85% of California’s population.
According to the SD County Tax Assessor, in 1977 – the year BEFORE Prop 13 took effect (when everything was working great, according to Prop 13 critics) – our countywide property tax revenue was about $639 million.
In the 2011-2012 fiscal year, our county assessor reported real estate property tax revenues of $4.550 BILLION.
For every property tax dollar collected in 1977, the county in 2011-12 collected $7.12.
And BTW, according to the County Assessor, since Prop 13 passed, 97% of the pre-Prop 13 county owner-occupied homes has changed hands (and been reassessed) at least once.
During that time frame, our county population has grown about 85%, and inflation has gone up about 253%. Hence property tax revenues today are substantially higher than the bloated PRE-Prop 13 year, even after adjusting for inflation and population growth.
Read more here:
Yet its never enough to fund school, parks, and basic services?
You forgot to add the increase in the number of public employees and their salaries/benefits. That would probably eat up whatever remains and more…
Whatever your feelings about the appropriate level of taxation we wish to impose upon ourselves to pay for public services, projects, and investments – prop 13 makes for awful policy.
Prop 13 distorts the housing market by incentivizing folks to hang on to their property even when it no longer suits their lifestyle, leading to market inefficiencies that artificially inflate housing costs by limiting supply. It is also generational theft – the young and the new subsidize the old and established.
Prop 13 leads to a less efficient and less dynamic marketplace and damages the entire California economy. Ironically, the pro-prop 13 dogma is in actuality anti-capitalist and reflects a lack of faith in the unfettered operation of the free market.
Hopefully they will shrink prop 13 down to a size that we can drown it in the bathtub.
$639 million * 1.85 population * 3.53 for inflation = $4.173 billion. That’s within 10% of current revenue, hardly a “substantial” difference.
Let’s break down their analysis.
They assume that property taxes (which presumably go toward the cost of building & maintaining infrastructure) scales linearly as:
(1) times goes on
(2) population increases
and is independent of the type of development (urban/high density vs sprawl vs suburban).
That is, they assume you can just take the old property tax, adjust for inflation (by the consumer price index, which is a dubious measure of inflation), then multiply by population increase.
Pretty sure at least one of those is false. You don’t just adjust for population by multiplying by the population increase. That depends on the type of development and the population increase together.
Maybe you multiply by the population increase squared? Or some other function? For urban developments maybe it’s the square root of population increase…
Prop 13 distorts the housing market by incentivizing folks to hang on to their property even when it no longer suits their lifestyle
IOWs, they aren’t kicked out of their homes when the home prices appreciate by the much higher taxes they have to pay. Somehow that isn’t convincing me to get rid of prop 13.
Ironically, the pro-prop 13 dogma is in actuality anti-capitalist and reflects a lack of faith in the unfettered operation of the free market.
Like most things today in the era of voracious big gov, California housing is not a “free market” by any stretch of the imagination. Land use is highly restricted by zoning, ecological concerns, income inequality concerns, out of control immigration and crony capitalist big land developers. Subsequently, when the state is impacted by out of control immigration and high population density price appreciation is inevitable.
The state government has shown that it will charge whatever the market will bare when it comes to taxes and then add some on top of that. IF you don’t think you are being treated fairly because you recently bought, then I have news for you – it’s unlikely you’ll be paying less if prop 13 is killed. Since you mentioned “fairness”, I assume you’ll at least get some schadenfreude out of it because all those other people who haven’t moved will pay more. An interesting motive but not an honorable one.