LA Times: Shortfall in Car Tax to Hit Home

[zimv20]

link (http://www.latimes.com/news/local/politics/cal/la-me-backfill9dec09,1,3822058.story?coll=la-news-politics-california)


Local governments this week will receive two-thirds less from the state than anticipated. Officials may resort to higher taxes, lawsuits.
By Evan Halper and Sue Fox
Times Staff Writers

December 9, 2003

SACRAMENTO — Gov. Arnold Schwarzenegger's promise to protect local governments from losing money as a result of the reduction of the state's car tax is set to fail its first test Wednesday.

Administration officials have notified cities and counties that the state will be $254 million short on the December car-tax payment to local governments, which originally was scheduled to be $381 million and is due midweek.

Moreover, local officials learned Monday that the pain will get worse next month, when payments to the locals go from a third of what they expected to nothing at all. From January through March, state officials plan to divert all remaining car-tax money away from local governments to pay $600 million in refunds owed to drivers who paid the higher car tax this fall.

As a consequence, local governments across the state likely will have to begin cutting programs ranging from fire coverage to libraries, government officials say. Some local governments and the California League of Cities are threatening to sue the state for the money. Other cities already have concluded that they are unlikely to get paid and are considering tax increases.

(more)


oops. too bad _this_ was hard to predict.

[pseudobrit]

Sounds like California's about to go from bad to worse.

[3rdpath]

i read this article today and just had to laugh...not a happy laugh but an " i told you so...he's a freakin actor" kinda laugh.

so between this and the grope investigation he's broken two campaign promises in his first month of office.

whataguy...:rolleyes:

[IJ Reilly]

Yup, it looks like we've been gang groped. The Gov bet it all on his ability to talk the legislature into $15 billion in long-term debt, and lost the gamble. But even if they'd approved sending this proposal along to the voters, and the voters approved, it wouldn't have covered the $4 billion shortfall in local government financing from the vehicle license fee. This is all just so impossibly stupid.

[Sun Baked]

A lot of state have been nailing people with drastic increases in their vehicle and home taxes recently.

Submit the forms for a building permit to add a room or make changes to your home and get a nice $ tax surprise in the mail (ie, your homes valuation just shot up 50/100/150/X00 thousands dollars).

Since there has been alot of remodeling going on, it's big bucks.

Too bad CA doesn't do that... and like the vehicle tax any politician that pushed through allowing property valuations to change when a remodel increases a properties value will get lynched.

Do it to business, and increase the freaquency of the valuation change there -- but homes and vehicles will bring out the pitchforks.

[IJ Reilly]

California's tax system is a complete donnybrook. Nearly all local control over taxation was lost in 1978, with the passage of Proposition 13 (and several subsequent bad government initiatives). Property tax assessments do rise when an owner improves a property, but only by the additional value added, and all increases thereafter are limited to a maximum annual inflation rate of 2%. Tax rates are also fixed at 1.25% of assessed value. Reappraisals don't occur until property ownership is transferred, but even that provision features a great many exemptions and loopholes. Consequently a lot of California's property owners are currently paying taxes based on the value of their properties during the Jerry Brown and Pete Wilson administrations. Their services are heavily subsidized by local government. But the biggest problem with the post Prop 13 tax system is the lack of local control over taxation. This is the cornerstone of the mess we find ourselves in today.

Anyway, on the political side, this week the Gov blamed his inability to fulfill his campaign pledges on the legislature. He and his staff are now reduced to awkwardly playing with words in an effort to make it look like he never promised not to hurt local government with the rescinding of the vehicle license fee, or to cut education, which he's also proposing now.

[3rdpath]

Originally posted by Sun Baked

Submit the forms for a building permit to add a room or make changes to your home and get a nice $ tax surprise in the mail (ie, your homes valuation just shot up 50/100/150/X00 thousands dollars).

Since there has been alot of remodeling going on, it's big bucks.

Too bad CA doesn't do that...

maybe i'm misreading what you're saying but i can say with 100% accuracy that cali will increase you home taxes when you add on to your existing home...and i have the supplemental tax bills to prove it.

[mactastic]

Time to "terminate" the legislature huh? Well Arnold can't say he wasn't warned. California is harder to govern than it looks.

[IJ Reilly]

Schwarzenegger Retreats on Key Campaign Vows

The governor backs off promises to spare education funds and to cover local governments' loss of car-tax revenue. He says legislators deserve the blame.

By Peter Nicholas, Evan Halper and Joe Mathews, Times Staff Writers

SACRAMENTO — Retreating from two central campaign promises that helped make him governor, Arnold Schwarzenegger on Tuesday dropped his personal "guarantee" that cities and counties would be compensated for billions in lost car-tax revenue and reversed his pledge to safeguard spending for public schools.

In a wide-ranging interview with CNN, Schwarzenegger offered no commitment that his administration would restore to local governments the money they lost when he repealed a vehicle registration fee increase on his first day in office. Rather, he said that mayors and county supervisors who are worried that some $4 billion in lost revenue won't be replaced should look to the Legislature, which is considering a bill to make that happen.

And he suggested that if local government coffers are not replenished, it is not his fault.

"They [local officials] should put pressure on their state legislators because they've spent their money," Schwarzenegger said on the network's "Inside Politics" show. "It's not me taking anything away from them, it's they've spent their money."

Schwarzenegger also broached the prospect of suspending an education spending formula mandated by the state Constitution. During the campaign he had said that schools would be cut "over my dead body."

"We are working with the education community to see how we can work together with them to help us with this budget crisis," the governor said.

Local officials and educators were startled by the statements, made on the same day a major Wall Street rating agency downgraded California's credit status, and as he and state lawmakers continued haggling over a proposed spending cap and $15-billion bond measure aimed at shoring up the state's finances.

As a candidate, Schwarzenegger shared few details of how he would close the state's yawning budget gap. Now in office, his policies are being revealed in the day-to-day press of running a government.

Before he was sworn in, Schwarzenegger offered personal guarantees that local governments would not be deprived of money from a rollback of the car-tax increase. Across the state, cities and counties use up to 75% of that revenue to pay for public safety, according to the California State Assn. of Counties.

"They should have enough funds and I will make sure of that," Schwarzenegger told reporters in October. He also said on the subject, "I can guarantee you that we will not take money away from them. They need the money."

During the campaign, when Schwarzenegger was pressed on the loss of local revenues wrought by wiping out the increase, he said he would make up the difference the same day he cut the car tax.

Communities that rely on the tax fear that state government, facing a whopping shortfall of its own, will leave them shortchanged. The state's monthly transfer of car-tax revenue to local governments — set for today — will be $254 million less than what would have been the case under the higher fees.

"Everything local government does is being put on the line by this drastic, drastic reduction," said Chris McKenzie, executive director of the League of California Cities.

Los Angeles Mayor James K. Hahn and various City Council members held a news conference Tuesday to warn that the up to $19 million that the city will lose each month because of state cuts pays for the equivalent of 190 police officers or firefighters.

"We are extremely apprehensive that the nearly $4 billion in local revenues that cities in California are owed are at risk," Hahn said. "Most of that funding pays for police and fire services. In an emergency, this funding could mean the difference between life and death."
More... (http://www.latimes.com/news/local/la-me-budget10dec10,1,5862572.story?)

[Sayhey]

What with Arnie's new talk of education cuts and his plan to make our kids pay our bills, it is looking like a second recall might just be in order. I know - it's not going to happen, but it sure would make one believe in karma.

[zimv20]

schwarzenegger:

And he suggested that if local government coffers are not replenished, it is not his fault.

"They [local officials] should put pressure on their state legislators because they've spent their money," Schwarzenegger said on the network's "Inside Politics" show. "It's not me taking anything away from them, it's they've spent their money."


what a short-sighted idiot he turned out to be. and how are the short-sighted idiots who voted for him feeling right about now?

[Ugg]

The county I live in, Humboldt, has over the last 2 years, reduced its budget by 30 % and has 17 % fewer employees. If arnie fails to come through with the money, there will be an immediate shutdown of non-essential services, like libraries, parks, etc., with the other services being in grave danger of collapse.

The biggest failure of prop 13 is that it treats business and personal property the same. Many companies have extremely low tax burdens because they continue to occupy the same property and have not seen a tax increase since 13 came into effect. Talk about a massive subsidy to business.

arnie is playing with fire and with jeb's hatchet lady at his side, wants nothing more than to destroy social services in CA and to increase the governor's power to such a degree that the legislature is powerless to stop him. He won't get re elected but the damage he will cause will take years to fix. Is it the way the system is set up or is CA just intent on rushing into the pacific like lemmings.

[Frohickey]

Governor should have just looked at the budget from prior years and just rolled them back to those budgets. If a program didn't exist a few years ago, then it is temporarilly unfunded until the budget gap is fixed. Easy and equitable solution, IMO.

As to Schwarzenegger's $15 billion bond measure, it sure sounds like more of Davis' scheme of mortgaging the house to pay for today's groceries. Hate to say it but 'I told you so'. The best way to fix the budget is what Tom McClintock was saying all along.

As to fixing the local tax structure, it should be pre-1978, where local municipalities have control over their own tax rates. I still think that Prop 13 is a good idea. The story was of grandma's tax bill was going through the roof even though there was no improvements or reappraisals or transfer of the property. I think thats a good idea. It allows you to plan your life around a fixed set of taxes, instead of worrying that you will be out on the street when you are old.

[Sun Baked]

Originally posted by 3rdpath
maybe i'm misreading what you're saying but i can say with 100% accuracy that cali will increase you home taxes when you add on to your existing home...and i have the supplemental tax bills to prove it. Some states are reassessing the value of the property to current "market value" much quicker, when remodels and additions are triggering reassessments.

Not simply value added of an addition.

And they're not simply just increasing valation, some of them are doing double digit tax rate increases. With some of the line item rates seeing 50% rate increases.

---

In other words they're looking to property owners to make up shortfalls, CA can't -- yet.

The local county assessors are under quite a bit of pressure to find money to keep things running.

[mactastic]

So let's keep "grandma's" tax rate low so she can plan her life around it, but not allow businesses to take advantage of the same tax breaks. I agree, the idea of your tax bill going through the roof just because you picked a nice place to live sucks. But I don't feel the same level of sympathy for a business who's taxes go up because of their locale.

Perhaps some cooperation between builders and environmentalists would help ease the cost of real estate here. More willingness to build the not-as-profitable multi family starter homes, coupled with a reduced threat of lawsuits over environmental issues would go a long way towards providing us with a mix of housing that would take some of the pressure off the real estate market.

[Sun Baked]

Originally posted by mactastic
So let's keep "grandma's" tax rate low so she can plan her life around it, but not allow businesses to take advantage of the same tax breaks. I agree, the idea of your tax bill going through the roof just because you picked a nice place to live sucks. But I don't feel the same level of sympathy for a business who's taxes go up because of their locale.Not only has the tax stayed stable as the business property is "facelifted" several times throughout the years to increase the market value.

While the corporate "ownership" vehicle remained the same, the vehicle owners may have changed hands several times -- while claiming huge asset values on their balance sheets.

Of course several proposals will hurt the "small businessman" who may have recently found that it's less expensive to buy the building they are in, than rent.

And the small warehouse/office condo/business sites have been a hot market as the big leased space market was crashing in CA.

So the "mom & pop" business is going to get shafted if the business properties are backed out of Prop 13.

[mactastic]

Yeah I was thinking about that. Maybe we could extend the exemption to businesses that are sole proprieterships who's owners live in the community their business is in.

[Frohickey]

Originally posted by mactastic
So let's keep "grandma's" tax rate low so she can plan her life around it, but not allow businesses to take advantage of the same tax breaks. I agree, the idea of your tax bill going through the roof just because you picked a nice place to live sucks. But I don't feel the same level of sympathy for a business who's taxes go up because of their locale.

Perhaps some cooperation between builders and environmentalists would help ease the cost of real estate here. More willingness to build the not-as-profitable multi family starter homes, coupled with a reduced threat of lawsuits over environmental issues would go a long way towards providing us with a mix of housing that would take some of the pressure off the real estate market.

I don't see why a business should be penalized just because they are doing business. If they comply with the same tax rules as grandma, then it should be the same tax rate. There should be no specialized rates, equal protection, equal treatment.

I think that environmentalists should only be able to file lawsuits if they are the private owner or plaintiff, and not just an interested third party doing so for the 'diversity of the species' or other stuff like that. Make it between the developer and the land owner.

As to not-as-profitable multi-family starter homes... you need to ask yourself. Why are they profitable? Isn't it because that people would rather live in a single family home than in a multi-family dwelling? Sounds like a market preference to me. Why should a developer, who is in business to make a profit for themselves and their shareholders intentionally minimize their profit potential? To forestall the threat of litigation from environmentalists? How is that different from blackmail?

I'm as environmentally conscious as the next guy, but Environmental, Inc with its cadre of lawyers ready to pounce on developers and get horrendous amounts of taxpayer dollars for litigations costs are not my idea of protecting the environment.

[mactastic]

Originally posted by Frohickey
I don't see why a business should be penalized just because they are doing business. If they comply with the same tax rules as grandma, then it should be the same tax rate. There should be no specialized rates, equal protection, equal treatment.

Because its better than saying ******* grandma.

I think that environmentalists should only be able to file lawsuits if they are the private owner or plaintiff, and not just an interested third party doing so for the 'diversity of the species' or other stuff like that. Make it between the developer and the land owner.

I know you have a radical, out-of-the-mainstream view of property rights, but what you just said means if the developer buys the property they can do whatever they want with it. Neighbors have no say under your proposed sceme, even if the developer wants to put a prison, or an ammunition plant, or a pig farm in the neighborhood. Sorry, that's just not reality.

As to not-as-profitable multi-family starter homes... you need to ask yourself. Why are they profitable? Isn't it because that people would rather live in a single family home than in a multi-family dwelling? Sounds like a market preference to me. Why should a developer, who is in business to make a profit for themselves and their shareholders intentionally minimize their profit potential? To forestall the threat of litigation from environmentalists? How is that different from blackmail?

Sorry, I meant less than profitable for the city. Developers can make just as much, if not more, on multi family housing. And the market is most defiinetly there for cheaper housing when it's done right, not just tossing up apartment blocks. Higher density development means developers can use bulk item discounts like Walmart does, and when you build condos or apartments with common walls you are reducing the overall costs of construction. Cities, however, don't like multi-family stuff because the tax revenue from the permit fees and annual taxes on the smaller, cheaper property don't cover the cost of services the city has to provide in terms of fire and police protection, sewer services, etc. etc. So the city has no incentive to put housing rather than say, an auto mall which provides the same tiny property tax revenue, but generates huge amounts of sales tax revenue that the city can collect. Until we reform Prop 13 and other anti-housing laws we are stuck with a biased approach from cities.

I'm as environmentally conscious as the next guy, but Environmental, Inc with its cadre of lawyers ready to pounce on developers and get horrendous amounts of taxpayer dollars for litigations costs are not my idea of protecting the environment.

And I'm as business-friendly as the next guy, but Big Business Inc. can't come in and suck the life out of a town from it's headquarters in a tax-haven state, or even an offshore island.

[Frohickey]

Originally posted by mactastic
I know you have a radical, out-of-the-mainstream view of property rights, but what you just said means if the developer buys the property they can do whatever they want with it. Neighbors have no say under your proposed sceme, even if the developer wants to put a prison, or an ammunition plant, or a pig farm in the neighborhood. Sorry, that's just not reality.

And I'm as business-friendly as the next guy, but Big Business Inc. can't come in and suck the life out of a town from it's headquarters in a tax-haven state, or even an offshore island.

I don't think my property rights philosophy is radical at all. If I buy a property, then rights come along with that property. Don't give me the illusion that I have certain rights to do with the property (and its reflected in the price). If zoning and neighborhood compacts say that there are limitations to what I can do with a piece of property, then those should be spelled out prior to price negotiation, and not discovered after the sale was finalized. Now, if my existing land was really unlimited in what I could do, and I find out when I try to sell it that the new owners would be prevented from doing certain things with it, and it subtracts from my selling price, someone, either the zoning authority or the neighborhood would need to compensate me for the lost revenue. Its fair if the circumstances were reversed.


If the tax rates in a town or state is set, then why shouldn't a business not be able to come in and enjoy the same tax rate that was previously set? I know, there are cases where businesses have been lured by cities by giving them tax breaks and such. Thats why I'm against special rates for special constituents. Hence my earlier point about equal treatment and equal protection.

[Sun Baked]

Originally posted by Frohickey
I don't see why a business should be penalized just because they are doing business. If they comply with the same tax rules as grandma, then it should be the same tax rate. There should be no specialized rates, equal protection, equal treatment. Businesses and grandma are treated differently, we're NOT allowed to sell grandma to new owners and keep her locked in the basement, just so some rich yuppie can get a smoking deal on the house and keep that 30 yr old property valuation.

[Ugg]

Originally posted by Frohickey
I don't think my property rights philosophy is radical at all. If I buy a property, then rights come along with that property. Don't give me the illusion that I have certain rights to do with the property (and its reflected in the price). If zoning and neighborhood compacts say that there are limitations to what I can do with a piece of property, then those should be spelled out prior to price negotiation, and not discovered after the sale was finalized. Now, if my existing land was really unlimited in what I could do, and I find out when I try to sell it that the new owners would be prevented from doing certain things with it, and it subtracts from my selling price, someone, either the zoning authority or the neighborhood would need to compensate me for the lost revenue. Its fair if the circumstances were reversed.


If the tax rates in a town or state is set, then why shouldn't a business not be able to come in and enjoy the same tax rate that was previously set? I know, there are cases where businesses have been lured by cities by giving them tax breaks and such. Thats why I'm against special rates for special constituents. Hence my earlier point about equal treatment and equal protection.

Property has no rights. Only humans have rights.

Real estate law has become much more stringent as of late in regards to non-disclosure of existing conditions/laws, etc. BUT, the important fact here that you are so willing to ignore is that as the population expands and such things as water and air and noise are impacted by human activity then our "rights" to profit from land will be impacted as well. For every action there is an opposite and equal reaction and this law has never been proven wrong.

The "rights" of colonists to rape and pillage the land ignored the rights of native Americans and we are continuing to pay the price. If limits aren't placed on our activities, there will soon be nothing left. By refusing to acknowledge this fact you are stating that your rights supercede all others. That is not, nor ever has been legally viable. It's like saying that you own a small business in a small town and wal mart comes in and your customers go elsewhere even though your prices are competitive. The government nor wal mare is responsible for the failure of your business and nobody has guaranteed that your business will succeed. The rules are constantly changing and adaptation has always been the key to success, not trumpeting some age-old saw that was never true in the first place.

[IJ Reilly]

Originally posted by Frohickey
As to fixing the local tax structure, it should be pre-1978, where local municipalities have control over their own tax rates. I still think that Prop 13 is a good idea. The story was of grandma's tax bill was going through the roof even though there was no improvements or reappraisals or transfer of the property. I think thats a good idea. It allows you to plan your life around a fixed set of taxes, instead of worrying that you will be out on the street when you are old.

This is an internally contradictory argument. Local control over property tax rates can't be returned while at the same time guaranteeing perpetually low taxes to grandma, or anybody else. If you think that local control over property tax rates is the way to go, then it makes so sense whatsoever to say that "Prop 13 is a good idea," because the ending of local control was is the single most fundamental change introduced by Prop 13 .

[Frohickey]

Originally posted by IJ Reilly
This is an internally contradictory argument. Local control over property tax rates can't be returned while at the same time guaranteeing perpetually low taxes to grandma, or anybody else. If you think that local control over property tax rates is the way to go, then it makes so sense whatsoever to say that "Prop 13 is a good idea," because the ending of local control was is the single most fundamental change introduced by Prop 13 .

If Prop 13 is mutually exclusive of local control over property tax rates, then maybe Prop 13 ought to be repealed... and replaced with individual municipal measures voted on by the residents saying that property tax rates cannot suddenly increase or decrease. Then, the residents can either vote them up or down, and let grandma move to whereever she wants to move to after the vote.

How's that?

[Frohickey]

Originally posted by Ugg
By refusing to acknowledge this fact you are stating that your rights supercede all others. That is not, nor ever has been legally viable. It's like saying that you own a small business in a small town and wal mart comes in and your customers go elsewhere even though your prices are competitive. The government nor wal mare is responsible for the failure of your business and nobody has guaranteed that your business will succeed.

My rights supercede all others, if it has to do with my property. Conversely, I do not have any rights on property that I do not own.

The logical conclusion of your argument is that you have a right to my living room sofa and big screen television.

If I own a small business in a small town, and Walmart comes in and my customers go elsewhere even though my prices are competitive, then the reason for the failure is my own. In order to retain my customers, I would need to offer them a better value than they receive from my competition, be it with service, price, or both.

There is no guarantee that a business will succeed.

[IJ Reilly]

Originally posted by Sun Baked
Some states are reassessing the value of the property to current "market value" much quicker, when remodels and additions are triggering reassessments.

Not simply value added of an addition.

This is the traditional method of setting property taxes, based on assessed valuation. The tax basis of the property changes whenever it is improved or periodically when the assessor reappraises it based on a change in market value. This is how property taxation works in most of the nation, and also how it worked in California before 1978.

The problem Prop 13 was supposed to address was the severe inflation in property tax bills seen in California during the 1970s, when property values were skyrocketing 20% a year or more. Unfortunately the legislature sat on its hands while public furor over property taxes grew. They could have fixed the problem sensibly, and pulled the plug right out of that old gas bag, Howard Jarvis. They failed, miserably -- and we're still paying the price.

At the time, hardly anyone believed the dire predictions made by the opponents of Prop 13 -- though it seems to me that every one of them came true.

[Frohickey]

Also, lots of environmentalist instinctively go and invoke the American Indian when people start talking about property rights.

But these same environmentalists would recoil at the some of the practices done by the American Indian.

Here is a quote from the Lewis&Clark Rediscovery Project (http://www.l3-lewisandclark.com/ShowOneObject.asp?SiteID=77&ObjectID=819)
The Indians would gather the bulbs in spring or early summer while the flowers were in bloom. They probably did this to avoid digging up the bulb of the deadly death camas by mistake. The natives even went so far as to dig up and destroy the death camas bulbs that grew around the fields of quamash or camas.

:eek: Is that the native indians intentionally eradicating the important death camas plant? How is this good for the biodiversity of the planet? How many new cures for diseases could have been found were the deadly camas plant not been destroyed by the native American indians?!!! If the Sierra Club had a time machine, we'd send an army of lawyers to these indian tribes and serve them a cease-and-desist court order. If they continue, we will send in some forest rangers and get them to stop their Earth-destructive practices!!! DO IT FOR GAIA!!!!

[IJ Reilly]

Originally posted by Frohickey
If Prop 13 is mutually exclusive of local control over property tax rates, then maybe Prop 13 ought to be repealed... and replaced with individual municipal measures voted on by the residents saying that property tax rates cannot suddenly increase or decrease. Then, the residents can either vote them up or down, and let grandma move to whereever she wants to move to after the vote.

How's that?

Um, maybe. I certainly believe that control over property taxation should be returned to local governments, though I'm not opposed to some state rules governing rate-setting to prevent runaway property taxation like we saw in the 1970s. As far as "grandma" is concerned, I like the idea of allowing people over certain age to create a lien against their property for some portion of their property taxes, which would then be owed by the estate when they died.

[IJ Reilly]

Originally posted by Frohickey
Also, lots of environmentalist instinctively go and invoke the American Indian when people start talking about property rights.

I'm not sure how Indians were "instinctively" invoked in this discussion of property rights, but when I invoke them in a discussion of property rights, it has nothing at all to do with native practices, for better or worse.

The point of invoking Indians in this context is to ask the question "How did we get these precious property rights?"

[Frohickey]

Originally posted by IJ Reilly
This is the traditional method of setting property taxes, based on assessed valuation. The tax basis of the property changes whenever it is improved or periodically when the assessor reappraises it based on a change in market value. This is how property taxation works in most of the nation, and also how it worked in California before 1978.

The problem Prop 13 was supposed to address was the severe inflation in property tax bills seen in California during the 1970s, when property values were skyrocketing 20% a year or more. Unfortunately the legislature sat on its hands while public furor over property taxes grew. They could have fixed the problem sensibly, and pulled the plug right out of that old gas bag, Howard Jarvis. They failed, miserably -- and we're still paying the price.

At the time, hardly anyone believed the dire predictions made by the opponents of Prop 13 -- though it seems to me that every one of them came true.

I do not see the problem with not adjusting the property tax rates for property that is not offered for sale. Market value of a property should be what it was when it was last assessed, and the owner should be the only one that triggers a reassessment of the property, when it is offered for sale.

If you bought an object, be a it a car or a computer, and let us say the item in question is never discontinued by the manufacturer, when you bought it, the seller assessed a value to the item, and the buyer agreed to the value of the item when it is bought. Time passes, new cars/computers are made with improvements, but the model that you bought is never discontinued, lets say you lose it, but you have it insured, should you be compensated by a brand new car/computer with new features when you have only insured your particular model for replacement?

I think what is really the problem here is inflation, or central bank monetary policy. An assessed value on property of $100k might be fine 30 years ago, but with inflation taking a chunk of tax revenues each and every year, the original tax rate on that $100k might not be enough to cover current services such as police services or education. Maybe police services and education should be assessed per capita, instead of by property taxes. Maybe police services should be $10 for each person with a birth certificate but without a death certificate, and education should be funded by parents with children that are enrolled in the schools.

Then, property taxes can be levied, and that goes towards recordkeeping of the title, as well as ongoing maintenance of water, sewer, electrical, gas, as well as firefighting services.

But you will not see this type of tax policy change, because right now, the consumers of the tax revenue (education, police, etc) are not paying for the services rendered commensurate to their rate of use. Why would people volunteer to pay for what they use when we can have the 'rich guy' with the house to pay for it?

[Dros]

Originally posted by Frohickey
I do not see the problem with not adjusting the property tax rates for property that is not offered for sale. Market value of a property should be what it was when it was last assessed, and the owner should be the only one that triggers a reassessment of the property, when it is offered for sale.

If you bought an object, be a it a car or a computer, and let us say the item in question is never discontinued by the manufacturer, when you bought it, the seller assessed a value to the item, and the buyer agreed to the value of the item when it is bought. Time passes, new cars/computers are made with improvements, but the model that you bought is never discontinued, lets say you lose it, but you have it insured, should you be compensated by a brand new car/computer with new features when you have only insured your particular model for replacement?


I think aspects of your idea are good, or at least interesting, but your mention of insurance did bring up some questions for me. People can choose their level of insurance, and they don't choose to insure their house for the $30,000 they spent to buy it in 1960 but for a "replacement cost" of current value, undoubtably much higher. So your house is not a computer that loses value over time as newer houses come on the market, but something that gains value as time goes on. So why should I pay 10x as much taxes for services compared to a neighbor who has been living there for 40 years. If the house was taxed once to create a trust fund for services over the rest of time of ownership, then I would agree with you... but who wants to pay all that at once?

[IJ Reilly]

If it were up to me, I'd abolish property taxes -- but probably for the opposite reason you might. I'd abolish them because they're regressive. But I didn't think we were talking about radical overhauls of the tax system, but about how to return property taxes to some modest kind of equity, and local control, of the kind that's been lost in California for the last 25 years. I know how to do that, and it's not by freezing appraisals to purchase prices, because that automatically favors commercial and industrial property over residential, because the latter turns over more frequently. In fact one of the predicted impacts of Prop 13 was a shift of the property tax burden from commercial and industrial property owners to residential property owners. And within a few years, that's precisely what happened in California. I wonder how many home owners would have voted for Prop 13 had they believed this was going to occur.