3 ms·
> Property taxes on owned property only rise 2% a year. (very low, consider that my parent's Bay Area home has risen by about 5.7% yearly since the 1980s) What
by anamax 16y ago
> Property taxes on owned property only rise 2% a year. (very low, consider that my parent's Bay Area home has risen by about 5.7% yearly since the 1980s) What that leaves you with is entrenched residential and commercial property owners paying relatively very little in taxes.
You're forgetting that their property taxes are continuing to go up even though property values have gone down significantly. Why? Because their assessed value is below market value and as long as that's true, their taxes go up.
That factor makes property tax revenues far less volatile than they would be otherwise.
We know what counties and cities do when property tax revenues boom without a cap - they ramp up their spending. When property values crash, as they do every decade or so, that tanks their revenue, so cities and counties jack up the rates.
> If you are a new resident though, you get no immediate benefit - your taxes are assessed at the purchased value.
You get the benefit of knowing how your property taxes will behave. (If you buy right before a crash, you do get a respite until values recover.)
> that's $17.6 billion a year - pretty much the budget deficit of the state.
It's also significantly less than state spending has increased in the last few years. Note that the state isn't supposed to get property tax revenues - they're collected by cities and counties.
- usaar333 16y ago1) I agree volatility is cut which may be favorable. However, 2% is a very low maximum. The overall effect is to reduce taxes, especially on those who held houses long. 2) cities overspending: The better answer is to require neutral-cyclical spending. e.g. if revenues greatly rise, a large % must be placed into a fund. 3) Ignoring federal funds (which tend to be associated with mandates out of the state's hands), the state's expenditures have risen by $18B since 2005 and $25B since 2000. The $20B number represents a 20% rise, which might seem high. But then again inflation accounts for 25% and population growth another 9% - in a sense California is spending less than it was in 2000.
- anamax 16y ago> The overall effect is to reduce taxes, especially on those who held houses long. You say that like it's a bad thing. You're also ignoring the fact that CA's property tax rates tend to be among the highest in the country, even ignoring the various surcharges and so on. (Almost every jurisdiction is at the statutory max. The surcharges in San Jose are almost equal to my base tax.) > 2) cities overspending: The better answer is to require neutral-cyclical spending. e.g. if revenues greatly rise, a large % must be placed into a fund. And then they'll spend the fund.... That's why I mentioned that we have experience with this. After you demonstrate that actually working, we'll talk. In other words, we've heard that story. Excuse us for insisting that you demonstrate that things will be different this time. CA spends far more per person than most other states. What are we getting for it? > But then again inflation accounts for 25% Median wages haven't gone up by 25% since 2000, so why would govt expenses, which are wage-dominated, have gone up significantly? Oh yes, more govt employees, higher govt wages, and better govt pensions.