WatchI'm looking at my most recent tax bill and see the following:
- Mosquito Abatement
- CSA Paramedic
- CSA Vector Control
- City Emergency Medical
- City Paramedic SRV
- School Measure G
- Oak Fire Prev Dist
- BART/AC Transit (public transportation)
- City library service
- EBMUD (water)
- East Bay trail
- Flood benefit
- Park safety
- City landscape
- Underground utility
- Land & Improvements
Comes out to a total of 1.4112% in Alameda County (I know, unbelievable!).
Anyway, buyers typically just accept that 1.X% of the home price will be going towards property tax. It's just the way it is, right? Well wait a minute. When it comes to mosquitos, schools, paramedics, public transportation, land, park safety, fire, etc, wtf difference does it make if I've lived in my house for 15 years or 1 year? Why does the old retired couple who bought 30yrs ago pay less in property tax than their young neighbors who just moved in and are starting a new family? Is one less likely to need the fire department? Is one less likely to experience flood? Is one less likely to need a city paramedic? You can probably argue that the young couple may benefit from the schools more so than the older couple, but I don't see anything else on the list above that clearly favors one over the other.
When it comes to land value, if both parties above have the same amount of land in the same location, the valuation of that land should be identical.
I can understand price being locked. Whatever you paid for your house is what you paid. But conceptually why are we all using the items listed above yet paying so differently for them?
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B.A.C.A.H. says
That seems to be the norm. Charles Munger , son of Munger -next in line to Warren Buffett gave 10 million dollars to back Prop 32 in CA.
Oh the irony -somebody donating 10 million dollars to limit another group's campaign contributions. LOL!!
Modern politics has become a charade.
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lostand confused says
Charles and Molly Munger are sister and brother and could not be further apart ideologically. I asked Tom Del Beccaro if she was dropped on her head or taken off the hootie too soon or maybe all the kids made fun of her in school and she's' compensating. Funny stuff.
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Oakland, CA
B.A.C.A.H. says
You are correct in that I knew the rules when I bought. At the same time there is nothing wrong with revisiting those rules and having a friendly discussion on their reasoning. For the record, I have posted questions/opinions in the past and been swayed in an opposite direction than I originally started with. I'm open minded and eager to be convinced that prop-13 is right for America and we should all be paying different property tax amounts for the same thing.
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bmwman91's website
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Prop 13 would be a lot less of an issue if if actually did what the campaigners said it was going to do. "Keep grandma in her home." If it was a rule that allowed property taxes to be fixed upon an owner's retirement, then I would not have much issue with it. What we got instead was a giant abomination that applied to commercial RE along with residential, and that paved the way for messing up the school funding system.
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BayArea says
So what are you saying, that poor folk don't exist? That seniors on fixed income don't exist? That old folks were not economically exiled out of the state and kicked to the curb through high taxation prior to Prop 13?
You increase taxes on everyone and you'll see millions of people thrown overboard. And, and there is NOTHING wrong with someone being a wealthy long term owner. We shouldn't tax the life out of someone just because they are succesful. Equalizing poverty is not a way to make a country great. If you disagree, try living in Cuba with your fellow socialist in poverty together.
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rootvg says
I am not certified, but I can.
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San Jose, CA
Sorry to break it to you. Prop 13 only protects the property tax. You are complaining about Special Assessments. Your old neighbor's special assessments are identical to yours.
Have a nice day.
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my sister bought a house for 89k in St Louis few months ago....property tax is $2,400. Nearly 2.7%!! I suggested she go to the Assessor's Office. They told her she would have to wait til 2014 to file an appeal....Anyone know if she has some recourse?
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Kenmore, WA
Meh, I pay quite a bit in property taxes up here in Washington, but I see the good roads, the police presence, my neighbors talking about crime have only two known crimes in 25 years to report, the air is clear, the nights are quiet, the utilities work smoothly, the schools are good...
If you're smart voters, you get what you pay for. Unfortunately for those living in California, Prop 13 didn't just protect grandma from getting kicked out of her house, it locked in property taxes for everyone, and unique among these sorts of property tax freezes, it also locked in property taxes for corporate real estate.
Property taxes are also interesting in that assessments have reliable revenue streams. If the assessment is for $4M, there's a good chance that the city/county/state will actually get $4M at the end of the year. Income taxes are much more chaotic in that they decline when the economy is rough and rise up when the economy is strong. So by pushing the state of California away from property taxes and to income taxes, Prop 13 basically guaranteed budget chaos during any severe downturn. The state spends the full budget during the boom times, then the economy tips and public assistance costs go up while revenues are declining. Take a look at states that don't have an income tax (but which have higher property taxes). They're also having trouble balancing the books, but not nearly as badly as California.
Prop 13 was good for the corporate vote buyers who weren't looking long term, but bad for everyone else. Those who are still in California will be bearing the burden of the terrible decision making process behind Prop 13 for a very long time.
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Arlington, TX
In Texas, the avg property tax is 2.2%.
Luckily, the insurance is tops in the nation as well.
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Redwood City, CA
All those extra taxes are charged to everyone. The base rate is what prop13 protects.
A house follows standard inflation for an area, what prop13 was designed to protect is people who bought long ago, and then cities enveloped them, including a change in local inflation they weren't prepared for.
prop13 is of course a great boon to those living in cities, because it's based off a nominal amount of inflation, where cities have far greater inflation rates. Decent idea, but too simple.
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Fontana, CA
Not as bad as Simcity (the game) ... where I charge residents 7%.
Of course, that pays for EVERYTHING ...
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1% is 'fine' compared to most rates. But isn't property tax proof you ultimately don't own your home?
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And here's the punchline... last year the CA Francise Tax Board was going to enforce the fact that technically, you can only deduct the ad valorem (percent based on prop. values) property taxes, not the special assessments based on square footage. They ended up backing off on this position as EVERYONE deducts everything.
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rfsanders says
Reticulating Splines...
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Oakland, CA
Here is another question.
Take a look at the list above in my original post. Note things like public transportation, paramedic, fire, fire, flood, schools, library, etc...
Now tell me why renters don't pay property tax? Something beyond, "cause they don't own property, duh" would be appreciated.
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FortWayne says
No I am not questioning whether the poor folks exist. I'm questioning whether the young family who just recently bought their house should take the grunt of the property tax bill.
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BayArea says
Renters do pay property tax. It's part of the rent. Who do you thinks pays it, the tooth fairy?
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Oakland, CA
You are right that the rental amount covers property tax, of course.
I suppose in the end it probably would make little difference if this were broken up between renters and owners who occupy other than generating more paperwork... but collecting from the owners is a more reliable way for the gov to get their annual dough.
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BayArea says
One reason is intrinsic: pricing and taxing can never exactly match the utility conferred. We pay differently for identical airline seats, we pay the same for public schools and movie tickets even though we get different benefits.
Two more specific reasons are a mix of cynical and practical. The cynical reason is because fundamentally the process is about constituencies and provider lobbyists organizing to collect as much $ (which is a metaphor for labor) and power for themselves as possible. All government spending involves a mix of legitimate needs and waste, and all $ is fungible. The stated purposes are mere verbiage, whatever the voters will approve, although as a practical matter legitimate necessities must be paid somehow.
Conceptually, limiting property taxes to something the taxpayer can control directly (e.g. purchase price) has many advantages. For example, if it allays the fear of confiscatory tax increases, it can encourage investment: if you are considering building a house or factory, and one town offers a guaranteed tax rate for the life of that investment, while the other says "we'll change your taxes whenever we decide based on factors beyond your control," probably you would prefer to build in the town where you can predict what your tax rate will be. Likewise if a property tax increase forces elderly people on a fixed income to move into a nursing home, it can backfire in all sorts of ways, e.g. the cost of the nursing home may need taxpayer subsidy and the new buyers may put more kids through public school. Some people blame Prop 13 for all of California's troubles since 1978, usually without giving it any credit for California's successes since then, and sometimes without even considering the problems it was intended to address.
On the other hand, Patrick's "Essential reading" page includes a very persuasive argument for a Land Value Tax: http://patrick.net/change.php
There is a lot to be said for reforming Prop 13 to say property tax will reset after a fixed period based on changes in land value. So, if you build a factory, office building, or house, you get the Prop 13 protection for the expected useful life of that asset, then your tax adjusts based on land value. (The useful life of a factory might be 20 years, an office building might be 40 years, and a house might be 60.) There are no perfect tax policies, but the Land Value Tax has better arguments than most, and might cause fewer distortions than the current system.
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BayArea says
because they chose to do so when they chose to buy the house.
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curious you might have some good points but your post is too long to find out.
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BayArea says
If you bought a home in a given area pre-bubble, and someone else pays 3x as much during bubble years.. Is it true your home is now identical to theirs... what happens when it corrects.
Worse yet what if the Govt increases your property tax bill 3-4x higher during the bubble and obligates itself into higher long term debt and contracts ?
Now what ! You gonna get the money back from being overbilled, ripped off due to a bubble...govt going to renegotiate itself from higher "bubble driven" debt ?
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Prop 13 should stay.
Prop 58 should be repealed. There is no reason the basis of the property value should be allowed to transfer from grand parents/parents to children.
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I think you meantE-man says
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E-man says
what is yours and your families is the same. Its a related party transfer and basis can transfer, as is the case with IRS rules.
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OP, Bay Area
Maybe someday someone will begrudge me my Prop 13. It might be your kids who hate me for buying a "house next to nothing" and taking from "young families."
This week I paid my property tax bill. Two parcel taxes for elementary schools, another for the local CCD. A couple mid-2000s bond issues for schools. Plus the 45 percent of the regular property tax that's designated for schools. Then there's that whole Prop-30-something that's on the ballot...for schools and for the children, again. We are all for the children, but we are all struggling.
I bought my house last year. Four fifths of my property tax went to take care of "the future." In the future, I expect the future to take care of me.
I wish I felt better about The Future. The public school a mile down in a poorer neighborhood has an API of 8. That school got Lowellized. The runoff consisting of all those who can't afford Catholic school or lunch went to the school nearest me. That school has an API of 2, a free lunch rate of 70 percent, and spends 30 percent more per year than the 8 API school.
On what The Future owes me shall probably differ. However, let us agree in The Present that it was never to your benefit nor mine to be forced to subsidize people who had children knowing that the those who had them had less hope of paying for their kids than for their 2005 no verification loan. The ones who have been living mortgage-free since 2008.
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thomaswong.1986 says
Are you sure you don't want to give iwog a hard time? After all, he's your favorite pal here. ;)
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Both Prop 18 and 58 should be repealed. They are actually stealing and rubling between neighbours. Why anyone have to pay the service for your neighbours?
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That there are vultures counting on your death to bring them money is disconcerting.
Make your own way without counting on someone dying.
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Bayarea,
The east bay cities tend to be heavy on special add on assessments. Given that property value are generally lower, they rely on what you see on the the property tax bill. A city like Oakland which struggles with Police budget will just have to make up for it above. As a point of comparision, San Francisco is free from all that crap noted above and expanding their police as much as any city in America. There was one assessment for teachers raise and one other assessment for about $250, that's it.
In November, you will see all kinds of local measures like Bonds for library, Safety, and especially schools. Most of these are voted for and most ends up winning. After a decade or so, it adds up. I know, I've opposed every one of them over the last 10 years, but they win about 65% of the time. The school bonds are 80% winners and usually the most costly.
It probably helps to break down the $$ amount to make it more meaningful. Alameda county is huge so if it is Oakland 100K property, the total tax is 1410 @ 1.41% so the laundry list of things is just $200.
Here is how my neighbor sums up her property tax bill. "Look sunny, I have been paying property tax for 40 consecutive years. I already pay enough." She's right. Home ownership is painful in the beginning but awesome in the end. I have no problem carrying the burden when you are young and strong but get protection when you get old and weak.
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SFace says
I agree with you there. Well said.
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San Jose, CA
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033 says
You mean government employees? :)
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San Jose, CA
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BayArea says
:)
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Arlington, TX
E-man says
Yeah, the old 'I paid taxes at a lower rate, but now that I am old I want more services and you young people owe it to me'.
Gotta love the elderly.
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Danville, CA
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C Boy says
That's how it is, worse in Europe.
Old folks are basically royalty in Germany. It's a cultural thing.
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Los Angeles, CA
bob2356 says
Rent *may* pay property taxes, but that is not what ultimately determines the rate of rent. Our rent works out to $2000/mo cheaper than a comparable mortgage, part of which would be property taxes.
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C Boy says
And they're laughing all the way to the nursing home, since they vote in large numbers and the youth do not.
How do you think we got socialized medicine...oops...I mean Medicare D under a Republican president?
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E-man says
That I do agree with. Prop 58 just creates a pyramid scheme. I understand if a spouse would be included, but children... that's just creating an incumbency of wealth.
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I have no problem carrying the burden when you are young and strong but get protection when you get old and weak.
SFace, How many bedrooms does her house have -- and how many people are currently living with her?