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Yeah but if it hadn't been for Prop 13, many people (quite possibly your parents) potentially could be driven out of their homes due to escalating property taxe

by keltex 16y ago

Yeah but if it hadn't been for Prop 13, many people (quite possibly your parents) potentially could be driven out of their homes due to escalating property taxes had taxes scaled with the "market value" of their homes. Actually the biggest expense for the state is K-12 education (over 43% of the budget).

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usaar333 16y ago
K-12 education: For any state, this is among the highest expenses. Nonetheless, CA is actually below the US average. (http://www.edsource.org/iss_fin_FAQ_cacompares.html http://www.edsource.org/iss_fin_FAQ_cacompares.html). It certainly doesn't explain why CA has one of the highest state deficits (even per capita) in the country. As for Prop 13, I fully agree that many people (perhaps even my parents) may have had to move to smaller homes or even out of the Bay Area due to property taxes. So yes, my family has benefited. But that doesn't make the proposition "right". I find it much more unfair that new or non home owners are subsidizing the older ones though a highly regressive tax system. This only feels more absurd when you consider that part of the reason housing is so damn pricey in the bay area is because of zoning restrictions (both green lining and density restrictions) passed by the baby boomer generation.
- anigbrowl 16y ago
  The equities of where the burden should fall are debatable, but the fact that different people on the same street or city block end up paying vastly different amounts of tax for the local same services is not. Something else to bear in mind is that when commercial property is owned by a corporation which is a wholly owned subsidiary of another (eg BigCorp owns Big Property LLC, whose sole asset is the Big Tower building), the corporation can be sold without triggering the tax reassessment (ie BiggerCorp buys Big Property LLC, which remains the titleholder of Big Tower). This hurts new companies just as much as new homebuyers; here's a 2003 press release from Shoerenstein co. grumbling about how they pay $16/sqft in downtown San Francisco while most of Disneyland is taxed at 5c/sqft although the land is worth about 7x more than that figure suggests. Property taxes are reassessed periodically, but prop 13 limits increases in tax to 2%/year, so for those who hold real estate it takes 36 years for the tax to double in value even if the price of the land goes up much faster or inflation is high. Back in 79 stagflation was a pressing economic problem, so the net effect of Prop 13 was to reduce property taxes for existing homeowners - inflation was ~8% then, so a 2% tax increase cap meant your property tax was going down by 6% in real terms.

by keltex 16y ago

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usaar333 16y ago

K-12 education: For any state, this is among the highest expenses. Nonetheless, CA is actually below the US average. (http://www.edsource.org/iss_fin_FAQ_cacompares.html http://www.edsource.org/iss_fin_FAQ_cacompares.html). It certainly doesn't explain why CA has one of the highest state deficits (even per capita) in the country. As for Prop 13, I fully agree that many people (perhaps even my parents) may have had to move to smaller homes or even out of the Bay Area due to property taxes. So yes, my family has benefited. But that doesn't make the proposition "right". I find it much more unfair that new or non home owners are subsidizing the older ones though a highly regressive tax system. This only feels more absurd when you consider that part of the reason housing is so damn pricey in the bay area is because of zoning restrictions (both green lining and density restrictions) passed by the baby boomer generation.

anigbrowl 16y ago
The equities of where the burden should fall are debatable, but the fact that different people on the same street or city block end up paying vastly different amounts of tax for the local same services is not. Something else to bear in mind is that when commercial property is owned by a corporation which is a wholly owned subsidiary of another (eg BigCorp owns Big Property LLC, whose sole asset is the Big Tower building), the corporation can be sold without triggering the tax reassessment (ie BiggerCorp buys Big Property LLC, which remains the titleholder of Big Tower). This hurts new companies just as much as new homebuyers; here's a 2003 press release from Shoerenstein co. grumbling about how they pay $16/sqft in downtown San Francisco while most of Disneyland is taxed at 5c/sqft although the land is worth about 7x more than that figure suggests. Property taxes are reassessed periodically, but prop 13 limits increases in tax to 2%/year, so for those who hold real estate it takes 36 years for the tax to double in value even if the price of the land goes up much faster or inflation is high. Back in 79 stagflation was a pressing economic problem, so the net effect of Prop 13 was to reduce property taxes for existing homeowners - inflation was ~8% then, so a 2% tax increase cap meant your property tax was going down by 6% in real terms.