Prop 13, 33 years later, good or bad? (California)

[radcen]

Prop 13, 33 years later, good or bad?

 

[haymarket]

I am against a majority of people being able to change a states laws so that a supermajority of people are necessary to do anything - in this the legislature and tax hikes - in the future. It allows a tyranny of the minority where 34% defeat the wishes of 66%. As such, I favor repeal of Prop 13 although I do not live in the state of California.

 

[Kal'Stang]

Prop 13, 33 years later, good or bad?

No idea as I have no idea what prop 13 is.

 

[rathi]

Prop 13 is a disaster. It creates an imbalanced system in which spending is much easier than generating the revenue to pay for it. You only need 50% majority to pay money out, but need 66% to take money in. It is one of the prime drivers behind the California "we like government services but don't want to pay for them" attitude that pervades the state.

 

[DrunkenAsparagus]

I think it would be fantastic if it imposed the same restrictions on spending increases that it puts on tax increases. The result of the policy has been a massive budget imbalance. California's policy makers should have known that they could not afford the increased spending. Now that it's there, each special interest group is going to fight with all of hell's fury to keep their particular program, no matter how wasteful and harmful it is to the state as a whole. This is the most frightening thing about the "starve the beast" theory of government. Imposing restrictions on future spending is not really all that effective. Politicians will defy the law, economics, or common sense if it helps them in the next election. Past attempts be damned.

 

[radcen]

Prop 13 is a disaster. It creates an imbalanced system in which spending is much easier than generating the revenue to pay for it. You only need 50% majority to pay money out, but need 66% to take money in. It is one of the prime drivers behind the California "we like government services but don't want to pay for them" attitude that pervades the state.

Excellent points. Prop 13 was an emotional response to a very real problem. Being an emotional response, it wasn't fully thought out, especially by the voters. It only addressed half the problem.

 

[DiAnna]

I voted for Prop 13 and I'd do it again. People were losing their homes because municipalities and the state were using property tax revenue as their own personal wallets. Budget come up short? Raise property taxes, up the assessments. Voila. More money to spend!

It got to the point where people who'd lived in homes they'd bought 30 years earlier for $5,000, homes that were paid in full, were losing those homes because the annual property tax was twice-to-three times what they'd paid for the homes. Sure, the value of the homes increased, but the percentage of annual property tax increases was more than the percentage of the value increase. These people could not afford to buy their own homes at the inflated, construction-bubble value, and they sure as hell couldn't afford the gigantic property tax increases that were anywhere from 15% to even 30% per year. Why the hell else do you think enough people voted for the damned thing to actually amend the state's constitution?

Now when someone buys a home, they are assessed at 1% of the value of the home upon purchase, and their tax rate cannot be raised more than 2% per year.

It's worked fine until the real estate bubble burst in 2008, and suddenly home values are decreasing, not increasing... so Californians are lining up for reassessment with homes that are being taxed far beyond what they are worth. This isn't the citizen's fault. It's not the voters' fault. It's the California legislature's fault for using property tax as a budget-balancing cash cow until their victims were mad as hell and not going to take it any more.

Even now, legislatures are not cutting spending. Unions won't accept a cut in pay or perks, and most union contracts forbid layoffs or job reductions. California public workers are the highest paid in the nation because the state legislature didn't give a fat rat's ass how much taxpayer money they laid out. They still don't. Hell, they gave themselves a raise last year and gave their personal staff's raises in the 10%-15% range. How many of you got raises like that? Every single measure that both the former and current governor have offered to cut spending has been soundly rejected by the legislature. So now they want to go back to taxing people out of their homes again? No way, baby, and if they try there will be revolts in the street that make the OWS clowns look like choir boys.

 

[Aunt Spiker]

So really: nothing's changed?

They were in the **** before they were in the **** - and Prop 13 didn't fix the problem (that they can't manage money) it just changed the nature of it.

 

[radcen]

I voted for Prop 13 and I'd do it again. People were losing their homes because municipalities and the state were using property tax revenue as their own personal wallets. Budget come up short? Raise property taxes, up the assessments. Voila. More money to spend!

It got to the point where people who'd lived in homes they'd bought 30 years earlier for $5,000, homes that were paid in full, were losing those homes because the annual property tax was twice-to-three times what they'd paid for the homes. Sure, the value of the homes increased, but the percentage of annual property tax increases was more than the percentage of the value increase. These people could not afford to buy their own homes at the inflated, construction-bubble value, and they sure as hell couldn't afford the gigantic property tax increases that were anywhere from 15% to even 30% per year. Why the hell else do you think enough people voted for the damned thing to actually amend the state's constitution?

Now when someone buys a home, they are assessed at 1% of the value of the home upon purchase, and their tax rate cannot be raised more than 2% per year.

It's worked fine until the real estate bubble burst in 2008, and suddenly home values are decreasing, not increasing... so Californians are lining up for reassessment with homes that are being taxed far beyond what they are worth. This isn't the citizen's fault. It's not the voters' fault. It's the California legislature's fault for using property tax as a budget-balancing cash cow until their victims were mad as hell and not going to take it any more.

Even now, legislatures are not cutting spending. Unions won't accept a cut in pay or perks, and most union contracts forbid layoffs or job reductions. California public workers are the highest paid in the nation because the state legislature didn't give a fat rat's ass how much taxpayer money they laid out. They still don't. Hell, they gave themselves a raise last year and gave their personal staff's raises in the 10%-15% range. How many of you got raises like that? Every single measure that both the former and current governor have offered to cut spending has been soundly rejected by the legislature. So now they want to go back to taxing people out of their homes again? No way, baby, and if they try there will be revolts in the street that make the OWS clowns look like choir boys.

For the most part I agree with your history. One quibble, and it's minor, is that the shortcomings of Prop 13 were well evident many years before the 2008 housing bubble burst. Your words about the real problems that spurred Prop 13 are spot on.

I was a couple years too young to vote on it in 1978, but was politically aware even as a teenager, and I probably would have voted for it. But, my attitudes have changed since then, and I consider myself more thoughtful about long term consequences than I used to be. If faced with similar issues today I think I would still vote for it, but I would probably prefer something a little less shortsighted and a little more fully thought out that addresses both tax collecting and spending.

 

[DiAnna]

For the most part I agree with your history. One quibble, and it's minor, is that the shortcomings of Prop 13 were well evident many years before the 2008 housing bubble burst. Your words about the real problems that spurred Prop 13 are spot on.

I was a couple years too young to vote on it in 1978, but was politically aware even as a teenager, and I probably would have voted for it. But, my attitudes have changed since then, and I consider myself more thoughtful about long term consequences than I used to be. If faced with similar issues today I think I would still vote for it, but I would probably prefer something a little less shortsighted and a little more fully thought out that addresses both tax collecting and spending.

The only shortcoming of Prop 13 was that it forced the legislature to either curb its spending, or look for a new source of revenue. It looked for a new source of revenue and a few years later, the California lottery came to be. Originally it was earmarked specifically for educational purposes. It still is. However, the state took all the money it used to spend on education, and spent it on themselves instead!

Prop 13 is not now and never has been the problem. Out of control spending is the problem, and has been for decades. What exactly are these Prop 13 "long-term consequences" of which you speak?

 

[DrunkenAsparagus]

I voted for Prop 13 and I'd do it again. People were losing their homes because municipalities and the state were using property tax revenue as their own personal wallets. Budget come up short? Raise property taxes, up the assessments. Voila. More money to spend!

It got to the point where people who'd lived in homes they'd bought 30 years earlier for $5,000, homes that were paid in full, were losing those homes because the annual property tax was twice-to-three times what they'd paid for the homes. Sure, the value of the homes increased, but the percentage of annual property tax increases was more than the percentage of the value increase. These people could not afford to buy their own homes at the inflated, construction-bubble value, and they sure as hell couldn't afford the gigantic property tax increases that were anywhere from 15% to even 30% per year. Why the hell else do you think enough people voted for the damned thing to actually amend the state's constitution?

Now when someone buys a home, they are assessed at 1% of the value of the home upon purchase, and their tax rate cannot be raised more than 2% per year.

It's worked fine until the real estate bubble burst in 2008, and suddenly home values are decreasing, not increasing... so Californians are lining up for reassessment with homes that are being taxed far beyond what they are worth. This isn't the citizen's fault. It's not the voters' fault. It's the California legislature's fault for using property tax as a budget-balancing cash cow until their victims were mad as hell and not going to take it any more.

Even now, legislatures are not cutting spending. Unions won't accept a cut in pay or perks, and most union contracts forbid layoffs or job reductions. California public workers are the highest paid in the nation because the state legislature didn't give a fat rat's ass how much taxpayer money they laid out. They still don't. Hell, they gave themselves a raise last year and gave their personal staff's raises in the 10%-15% range. How many of you got raises like that? Every single measure that both the former and current governor have offered to cut spending has been soundly rejected by the legislature. So now they want to go back to taxing people out of their homes again? No way, baby, and if they try there will be revolts in the street that make the OWS clowns look like choir boys.

These are all fantastic reasons to make it harder to raise taxes. The only problem is that they didn't do the same thing with spending. Politicians don't care about cutting spending even in defiance of all good sense, simply because there is enough political will to spend a lot of money but not enough to raise taxes to pay for them.

 

[radcen]

The only shortcoming of Prop 13 was that it forced the legislature to either curb its spending, or look for a new source of revenue. It looked for a new source of revenue and a few years later, the California lottery came to be. Originally it was earmarked specifically for educational purposes. It still is. However, the state took all the money it used to spend on education, and spent it on themselves instead!

Prop 13 is not now and never has been the problem. Out of control spending is the problem, and has been for decades. What exactly are these Prop 13 "long-term consequences" of which you speak?

You answered your own question without even realizing it. The problem with Prop 13 is precisely that it only cut property tax collections, and did nothing to either find another source of revenue or cut spending. The over-taxing and over-spending go hand in hand. You can't solve only one, and not solve the other, and somehow expect both to be solved.

 

[radcen]

These are all fantastic reasons to make it harder to raise taxes. The only problem is that they didn't do the same thing with spending. Politicians don't care about cutting spending even in defiance of all good sense, simply because there is enough political will to spend a lot of money but not enough to raise taxes to pay for them.

Spending money gets votes.

 

[jamesrage]

Prop 13 is a disaster. It creates an imbalanced system in which spending is much easier than generating the revenue to pay for it. You only need 50% majority to pay money out, but need 66% to take money in. It is one of the prime drivers behind the California "we like government services but don't want to pay for them" attitude that pervades the state.

I do not want to sound like captain obvious here but why not create a law that any new programs that require funding must have means of funding before being enacted or that anything requiring funding must be included in the ballot question or bill?

 

[haymarket]

I would like to see a political ad on this issue in which a father and son are leaving a sporting event.
BOY: We sure whipped them Dad. Great win for our team.
DAD: Sorry son, but while we did score more points than the other team, we only won 64 to 36 and to triumph in this league you have to at least double the score. Otherwise its really not a win.
BOY: That is sure stupid. No kid in America plays with dumb rules like that.
DAD: Well son, that explains it because it was adults that came up with it.
As they walk away a disgusted ten year old throws his team pennant in the trash container.

 

[lpast]

I voted for Prop 13 and I'd do it again. People were losing their homes because municipalities and the state were using property tax revenue as their own personal wallets. Budget come up short? Raise property taxes, up the assessments. Voila. More money to spend!

It got to the point where people who'd lived in homes they'd bought 30 years earlier for $5,000, homes that were paid in full, were losing those homes because the annual property tax was twice-to-three times what they'd paid for the homes. Sure, the value of the homes increased, but the percentage of annual property tax increases was more than the percentage of the value increase. These people could not afford to buy their own homes at the inflated, construction-bubble value, and they sure as hell couldn't afford the gigantic property tax increases that were anywhere from 15% to even 30% per year. Why the hell else do you think enough people voted for the damned thing to actually amend the state's constitution?

Now when someone buys a home, they are assessed at 1% of the value of the home upon purchase, and their tax rate cannot be raised more than 2% per year.

It's worked fine until the real estate bubble burst in 2008, and suddenly home values are decreasing, not increasing... so Californians are lining up for reassessment with homes that are being taxed far beyond what they are worth. This isn't the citizen's fault. It's not the voters' fault. It's the California legislature's fault for using property tax as a budget-balancing cash cow until their victims were mad as hell and not going to take it any more.

Even now, legislatures are not cutting spending. Unions won't accept a cut in pay or perks, and most union contracts forbid layoffs or job reductions. California public workers are the highest paid in the nation because the state legislature didn't give a fat rat's ass how much taxpayer money they laid out. They still don't. Hell, they gave themselves a raise last year and gave their personal staff's raises in the 10%-15% range. How many of you got raises like that? Every single measure that both the former and current governor have offered to cut spending has been soundly rejected by the legislature. So now they want to go back to taxing people out of their homes again? No way, baby, and if they try there will be revolts in the street that make the OWS clowns look like choir boys.

Thats exactly how New Jersey operates...property taxs are Unbelievable and the highest in the country and that has everything to do with local misuse...in NJ they have this insane and expensive home rule thing going...in NJ there are 613 school districts all with superintendents making around 200,000 salary plus perks and cadillac benefits...plus secretaries making 80k plus and benes.
Each little town one right after another has its own local govt and structure...and the local politicians love it cuz its a gravy train for them....those 613 school districts should be dismantled and made into ONE for every county and all these little 6k or less resident towns need to combine and that alone would end New Jerseys fiscal problems...

 

[Gimmesometruth]

The only shortcoming of Prop 13 was that it forced the legislature to either curb its spending, or look for a new source of revenue. It looked for a new source of revenue and a few years later, the California lottery came to be. Originally it was earmarked specifically for educational purposes. It still is. However, the state took all the money it used to spend on education, and spent it on themselves instead!

Prop 13 is not now and never has been the problem. Out of control spending is the problem, and has been for decades. What exactly are these Prop 13 "long-term consequences" of which you speak?

It has produced lots of shortcomings.

The tax burden has been shifted to "new" residential buyers. New buyers pay 1% of purchase price. My neighbor, who inherited her house, pays her parents rates which are 1/4 of ours. She works for the city, has children in the schools, we do not.
Over 25% of residential still is grandfathered into the the old rates, this causes an inequity of taxation.

Corporations transfer title to shells, avoiding reassessment. Over 50% of commercial properties are still grandfathered into the old rates, again causing inequity and placing a greater burden upon new buyers.

Overall, prop 13 caused a shift to reliance upon income taxation for state revenues. This has created a boom-bust cycle in revenue (good time are good, bad times are very bad), this is exasperated by the 2/3 budget vote requirement.

It has shifted the control of funding from local govt to state control.

I'm not sure where you are going with the "out of control spending", prop 13 did wipe out huge chunks of municipal employment. We now rank in the middle of the nation on per student spending, the K-12 schools are in reality underfunded, the roads here in San Diego are really, really bad, our water/sewer system is on the brink of collapse.

 

[Jerry]

Prop 13, 33 years later, good or bad?

I have no idea what prop13 is. Maybe next time linking to a law you want to talk about would be a good idea.

 

[monty]

Well said. You can tell some people again and again and it just doesn't seem to sink in. Money is power. The more money the government takes from us the more dependent we become.

 

[jamesrage]

Prop 13, 33 years later, good or bad?

If only they created a law in 1978 that would limit spending to 90% of the previous year's revenue to go along with prop 13. Restricting the amount of taxes the government may collect doesn't do any good if you don't restrict the spending the government can do.