Beer Baron said:
In reply to 67LS1 :
I'm also looking at the effect that has had on municipal revenue. Property taxes are a major source of revenue for cities and counties. Whether people are still selling houses, it definitely cuts the revenue local government needs for things like surface roads, schools, police, fire departments, etc... (And I still think Prop 13 disincentivizes selling. Doesn't mean people don't sell. Just that they are less *likely* to.)
My grandfather was a city councilman for West Covina when Prop 13 was passed, and they immediately had a dark room secret meeting about what that was going to do to the city. They moved around funds to build a mall in a way they didn't really have authority too because they knew the city was going to need the increased sales tax revenue to make up for a loss in property tax.
The intent of Prop 13 was to protect homeowners from being forced out of their homes in retirement as a result of not being able to afford their property tax.
Although a noble objective, as you know, it has had a lot of unintended consequences. For instance, I live in Ventura and have commuted 42 miles to Los Angeles for the last 16 years...how much less traffic, green house emissions, and time wasted would there be if people weren't penalized with a property tax reset if they move?
You've been out of the state for a while so you may not know about Prop 19 that was passed in 2020. Essentially, it allows everyone (not just those 55 or older) to take their property tax base with them anywhere within the state (not just between the few counties that have an agreement).
I realize this doesn't resolve the problem of the services property taxes support being underfunded but Californians pay exceptionally high taxes on the whole.
To me, this suggests an overall tax revenue allocation problem rather than a homeowners aren't paying enough property tax problem.
I gamed the berk out of Prop 13 by purchasing my grandmother's home when she passed away (a bunch legal maneuvering was required but it was all completely legit).
Her home was worth 25% more than my home but my property tax was reduced by 45% as a 2% annual property tax increase applied to 1979 prices (when she bought her home) was far less than the 2% annual property tax increase applied to 1998 prices (when I bought my home).
Bottom line, my cumulative taxes would be significantly lower in almost any other state even if I continued to make as much money which is doubtful. I totally agree that Prop 13 is having damaging effects but I don't think the solution is to kill it, we're already taxed too much, reallocation of state income, sales, etc. taxes seems to be the right solution to me.
I hope this isn't getting too close to the political line...I'll happily delete my post if it is.
