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To fix California’s budget crisis two propositions need to pass:
First: a repeal of proposition 13, so that a supermajority is no longer needed for budget changes and so that property taxes can be raised again. Sorry, if you want government, schools and roads, you will have to pay for them.
Second: a proposition which outlaws all future propositions and allow the legislature to nullify any past propositions with a simple majority vote. Californians have repeatedly proved that direct democracy does not work in California. We can debate why, but the results are in.
Until they do, I will continue to maintain that the current budget crisis is the predictable (and predicted) result of Prop 13. Californians voted for it, now they’re getting it. It is not just a result of the economic crisis, California has been having budget crises for years. It would be fundamentally unfair for the rest of America, through the Federal government, to bail out a State whose citizens refuse to be taxed at the level their services require.
Update: Apparently California Dems are going to try and sidestep Republicans and pass tax raises – a gas tax increase, sales tax increase and a 2.5% surcharge on State income tax. Pretty horribly regressive taxes, but at least they realize they can’t just keep borrowing and loading the cost onto the future. Still, as with New York, where Paterson isn’t willing to raise taxes on the rich, this is the wrong sort of tax to put on at this time. (Well, arguably, a gas tax has some benefits, but the pattern is regressiveness, not "disincentivize using too much oil".)
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First
True. Prop 13 is unfair, especially so to recent home buyers.
I’d like to say I saw it coming, and that was why I didn’t vote for Prop 13, but that’s probably an exaggeration. However, I did vote against 13 and for the other prop that was on the ballot that year (7, I think) which would have been not so damaging.
And yeah, most of the props we get are crap and intended to fix stuff that would be handled better by simple legislation (if a fix is needed at all) [and some of them are just someone’s pet project that reads like a jr high idea from somewhere] … if the lege wasn’t gridlocked by fools most of the time.
Fools, most of them; cowardly, all of them.
crap. I pay enough property taxes, no Prop 13 beneficiary here.
that’s for sure. did they set a record for longest gridlock this time? obstinate mules, really.
Prop 13 screwed the quality of life in California. I moved from Louisiana so that my children could have a decent education. By the time they were in junior high the whole systems had gone to hell. Fortunately, they went to Montesorri as young children and have greatly benefited from learning to learn.
When you need 2/3 to pass budgets, it makes things hard.
The others will be along soon when they finish discussing Biblical sex.
Wow, over 500 comments on the Warren thread and still rising…! ;-)
Anyone who knows, doesn’t Prop 13 cause the tax burden to fall disproportionately on newer homeowners? I seem to recall something like that.
That would suggest a repeal format that eventually removed the temporal bias on similar properties.
the thugs have this state by the balls when it comes to taxes. just like the fed we have to have a crisis for the gov’t to get it.
newer as in those who bought after it passed.
Do Bibles have sex?
see twain’s comment. it’s more about the sex than about Warren. You know, it’s like a good joke, if we have to explain it…..
Good Evening Ian and Firedogs,
o/t
forgive me Ian -
does anyone know how to update a published diary ?
Yes, and it’s done by the book.
Third. Repeal the needed two thirds majority to pass a budget
In California is a gas tax earmarked?
Is there a youtube available?
Before prop 13 if your spouse died you had to pay to 50% of thecap. gains on the current value of your home. Many elderly on fixed incomes were losing their homes. Naturally, the wingers created a solution that screwed more than it helped.
Sorry Ian, missed your comment here
Considering the last thread, I wouldn’t be a bit surprised. Every other kind of sex has been discussed.
It all started with California’s Prop 13, it destroyed the state and then they imported that same ballot measure into Oregon as Prop 5 which rolled back property taxes and instituted the super majority vote requirement. Then Sizemore put Prop 49 to fix it which just killed anything left. The state is in debt to it’s eyeballs, schools are falling apart and a new freeway has not been built there since 1985 the year before the passage of Prop 5.
They tried both here in Arizona, the property tax one did not get on the ballot but the super majority one did. Thankfully the voters of AZ were smart enough and the no ad campaign was also very smart to vote that down. The ad… big fat old slob sitting on sofa watching TeeVee being a pig and said that his vote counted as much as yours for all your effort to register and vote. Very effective.
These ballot measures are put up by groups like Club for Growth (or some such thing)….. this is ALL planned like the TABOR measures…..
Any of ‘em say this ain’t that big of a deal? Just checkin’
Oh also with the super majority to increase taxes it means that 2/3 of the voters must show up and vote to even qualify. SO if your election board is not good and keeps the voter rolls clean, keeps on tops of moves, deaths and such you could have a circumstances where the voter rolls say there are a 1,000 voters in a precinct but actually you have 800. Ya never win…..
Being an elderly couple on a fixed income doing away with prop. 13 and raising our property taxes would do us in. And the property values have dropped dramatically in our neighborhood. We would be scr e w ed.
Part of the problem is that it doesn’t affect business properties, which don’t get reassessed every time they’re sold. If it had, this problem would have been fixed years ago.
(Also, I think the lege needs to be adjusted in size: currently 80 assembly and 40 senate, for 35 million people; both houses are by population.)
That was in Prop 13, so repealing prop 13 takes care of that.
Yes, it could be modified to effect only primary residences, and not businesses. That would be an acceptable compromise.
Ah, as I thought. So, there’s a bit of slack in the amount by which taxes would have to rise on the newer owners, even though (how time flies!) the sheltered class of properties gets older and smaller by the year. Assuming of course that part of a repeal would be restoring equity among owners of similar types of properties.
The CA question is much bigger than this though, and involves a much bigger question of equity, as Ian points out.
Many States have credits for elderly and/or veterans.
It probably wouldn’t affect you anyway; there’s rules covering over-65 owners so they don’t get hit.
Actually, isn’t the problem more that commercial properties just aren’t sold that often so they don’t get the adjustment that comes from a sale?
I mean how often are factories owned by corps like Lockheed and such ’sold’ (other than as a bulk sale of the entire company which probably does not trigger the reassessment).?
the professional signature gatherers are a permanent fixture outside my l.a. supermarket. i tell them the day they have a petition to outlaw propositions my signature is theirs.
A sprinkling here and there… I just wonder how many were eaten by the mods…! I hope they took their prilosec or have plenty of Tums handy…! ;-)
In Arizona they have limits on the percent of increase of property taxes that can occur year to year. Also there are special laws for seniors (one good thing about living in a state with a high senior population).
The limit on HOW much the property tax can be increased would be first and then special circumstance laws for seniors or fixed income folks…
A couple gems from the Republicans proposal
The one above will probably be struck down by the courts within days of it’s passing if it’s included in the final budget
More here
It’s getting really silly and ROF funny now. that is, if y’all have nothing else to talk about…like how hosed we Kawlifunyons are.
Oy!
I started to point out that higher prop taxes tend to reduce prop values, though it’s uncertain by how much —almost certainly less than dollar for dollar, but good luck finding a fairly stable set of recent prices to test it out on.
Still, and particularly in the case of CA, it’s a thing to consider, and would mean that you couldn’t just slap a tax increase up on housing, there’d almost surely be some UC you’d rather not have.
and there is the rub
the federalists do NOT want these government services, they want robber baron economics where there is nothing for the individual but what money can buy
I have a great proposition for anyone who wants to put one up for vote;
“any tax reduction has to be payed for with specific spending cuts”
bing, let them pay for their tax reduction with real cut backs before they vote on teh tax deduction
Ian, is it a 2.5% surcharge ON state taxes, or is it an additional 2.5% OF state taxes. I thought it was the latter, which would obviously be a lot more–e.g., going up from five percent to seven and a half percent. Also, while for years I’ve railed against Prop 13, I’m not sure it’s the big issue now that property values have crashed.
Thanks Ian.
digg
Prop 13 rocks and Ian’s thesis sucks eggs. The intent of Prop 13 is to force state Goverment to live within their means, and they haven’t done their job. We are already the most overtaxed state in the union, even with prop 13. You need to find out why we need so much money first and do something about that before you raise taxes even further.
California gets the short end in Fed required spending, and the short end of funds returned back to the state. We get more than our share of immigrants put in jail and requiring services which the Feds don’t pay for. We have do-nothing state commissions out the waz that command extraordinary salaries, essentially a retirement system for termed out legislatures who can’t find real work. Thanks to an out-of-control union system that lies to the people we have a state-workers entitlement system that gets bigger when everybody else is cutting back.
I may be a progressive on most issues but when it comes to state spending I’m just another overburdened taxpayer. Really, why can’t we have a per capita government spending like our neighbor states? Why is the knee-jerk reaction to every crisis to throw more money at it?
And all this time I thought California’s budget crisis was divine punishment for failure to approve gay marriage.
[ducks]
I was around when Prop 13 passed. I know of one couple who had a primary home assessed at $120,000 and they were paying about $10,000 per year in property taxes (true!). Prop 13 was a reaction, admittedly pretty strong, against that kind of situation.
I was not aware businesses had a better deal.
Ian:
I can’t go with you on this Ian.
It might seem unfair but in the context of federal taxes to federal expenditures Cali needs to start getting it’s due
http://www.calinst.org/pubs/balance2003.htm
http://www.taxfoundation.org/r…..w/266.html
We’re supporting the “red states” and I think it’s time we get at least as much back as what we pay in. Which doesn’t mean the legislature should spend like a drunken sailor but it would be only fair to get back what is paid in, or at least close to it
Gotta run …
OT-Rep. Hilda Solis nominated for Labor Sec…
I commented on that at @630 (!!!) in the other thread – still going. Now up to 656.
Start by exempting commercial property from Prop. 13 protection.
I support repeal of the entire thing, but the residential component will be a hard sell until the demographic bubble of ‘protected’ elderly homeowners (who vote) passes on. Even then, the exemption can pass on to heirs I believe. at least the low tax basis can be transfered via in-family real estate sale.
As misguided as we Californians can be, I don’t see the initiative process being given up freely.
There is no ‘exemption’ for business property. It’s just that increases to market value for assessment purposes only kicks in when a property sells. Of course, big corps never sell their mega-million-dollar properties so they are still paying taxes at the rate they were back when Prop 13 passed. (That was the whole idea of the thing) Businesses must have their properties re-assessed at regular intervals to reflect market conditions. This will be the hardest to actually get done since these are the people who have all the money to fight it.
Next – house assessments. The system does create large iniquities in tax valuations in neighborhoods where some homes have been sold since Prop 13 passed. The rationale for this one was that since older folks tend to stay in their homes and not sell, they are protected from huge increases in taxes. However, in the under 65 crowd, statistics show that homes are sold on average about once every seven years. So the intent and plan was that over time, things would even out. Eventually every home will sell, and the tax valuation will be adjusted at that time. Unfortunately there is a teensy problem. If you pay your house off, and then get a new mortgage, the re-assessment kicks in. This needs to be changed to require an actual change in ownership. Otherwise, it’s not really that bad.
Third – all property taxes DO go up every year under Prop 13. However, there is a cap. It is very low, and in most years is less than the rate of inflation. So that needs to be adjusted to reflect the rate of inflation rather than to lag it.
Finally, the 2/3 rule. This rule does not apply to just the state legislature being able to raise taxes – it applies to counties, cities, and special districts as well. In Arcata – there was a referendum for a bond issue to do a major renovation on the very popular community swim facility. It got 65.2% of the vote – and naturally failed. This requirement institutes rule by the minority which I think could be challenged constitutionally. In any case – the Rethugs will fight this one tooth and nail because it is their mission to ’starve’ the government into submission in order to prove their contention that ‘government just doesn’t work’.
Economists (good ones anyway) have been predicting for at least a decade that Prop 13 would result in just what we are seeing right now – for the reasons I detailed above. Because the cap lagged the inflation rate, and because of the never-increased taxes on commercial property – California would at some point be unable to even maintain whatever level of services it was providing, never mind doing anything else. That day came about five years ago – and they have been playing rob Peter to pay Paul ever since and it will not stop until they are either a) bankrupt, or b) they either repeal Prop 13 entirely, or c) they fix it as I have suggested here.
“Californians Voted For Their Budget Crisis”
…Californians voted for it, now they’re getting it.
this is a little misleading. A very specific group of Californians THIRTY YEARS AGO voted for perpetual budget crisis. A good many of those voters are without doubt no longer Californians having either met their demise or moved. Another good many former supporters may have changed their minds.
There is nothing except speculative conjecture to say the current majority of voters in California support this budget hari kari, which only further supports the notion the voters should revisit it.
Sorry, Ian, but I think you’re off base here. I was also around when Prop 13 passed. I voted against the initiative at the time because I couldn’t support the whole package of provisions, but I do recall that at the time the combination of uncapped property tax rates and real estate appreciation was forcing people, especially elders on fixed incomes, to sell their homes.
Now, maybe these stories were hyped, and Jarvis and Gann were definitely selling snake oil; but they were at least offering a remedy. Your comment at this safe remove, that Californians voted for their budget crisis, smacks of uninformed sanctimony, something that is best left to Republicans, who have mastered the art.
Thanks John, and here’s a link I know YOU have, but many others should have before commenting about Prop 13, it’s impacts over the years and where CA is at today with the legislature 2/3 issue, our present budget, and MOFO Ahnald, who refused to sign today’s DEM budget that they got passed using a loophole AROUND the 2/3 issue so the facist Repub’s couldn’t stall them once again.
The ReThugs are out to break unions, eliminate social services safety nets, and break CA just like their counterparts in the GOP are doing at the fed level.
Can you imagine, letting the auto industry go bankrupt, and all those pensions down the toilet for a few million elderly who put in their 30 years on the lines and LIVE off of that?
If yer a GOP Thug, you can.
We are this close to really, really hellish and dark days in CA, and as a nation. The likes we’ve never seen.
If Obama don’t turn it around fast, and BURY the GOP, we’ll be as bad or worse off than USSR during its fall . . .
Bada bing. It’s 1% rule. He who is of the 1%, rules. ;-)
I like your thoughts . . . . and some others who have chimed in on this.
I see in the comments that it sort of depends on what lens you view this whole mess thru as to what one thinks is best for whom. Here’s MY lens:
MY parents benefitted GREATLY from Prop 13 from ‘78 to ‘90. Pops struggled for 10 years to get a retirement package from his work (he ran as a Director a vocational rehab workshop and grew it). Mom did not work. Had not forever. Last of their kind in them times, no doubt.
In ‘90, thanks to SURGING PROPERTY VALUES, and Prop 13 which did NOT tax them to death upon his retirement in ‘84, by ‘90 they sold what was bought as a $27,500 house for $275,00 or so.
With that they left the Bay Area for a home they bought for cash, NEW, in another part of CA, for $12,000. And put the rest away for later days.
Prop 13 THEN enabled them to save on taxes as they lived off of retirement and STILL added to their savings for another ten years.
By the time they become unable to care for themselves in ‘01, the newer house sale, and the money they had put away, provided for their extended living expenses, mom’s Alzheimer’s care, and ultimately my pops Parkinson’s care.
We’re talking 3-5 years of costs at $6,000 a month, each!, aside from healthcare, that Prop 13 bought them, that their offspring didn’t have to pay for, and they got a high level of care to their end.
Fine damned deal it seems to me.
The 2/3 thing has been a bane of wolf and has handcuffed CA ever since.
But given what Reagan did from ‘67-’75 to set the stage to ruin CA, Prop 13 is a fly on the elephant.
CA is all about the 1% rule, as is the USA. If yer the 1%, ya rule.
And we the people, who DON’T have wealth and depend on every paycheck and healthcare coverage thru work, who live as best as we can with what we have, and even used 401k’s to save in the past 20 years have watched them 401k’s and IRA’s go into the toilet, much as many others have watched over the past two decades as THEIR pensions were stolen and destroyed by deregulated big business and busted unions (fuck you Ronald Reagan).
And we in the Golden State, myself and my siblings, my wife, and countless friends thru the years who USED the educational system we were blessed with until Reagan destroyed it, one of the FINEST educational systems from K thru College, have watched as it has all been destroyed, as social services nets are destroyed, have watched as the gold has tarnished, unions busted, jobs disappear for the middle class.
One can’t blame foreign illegal labor in agriculture for ALL of our problems.
And speaking of such, how ABOUT that diminishing ag productivity and bought out family farms forced to sell by big agra? Thru the past 20 years?
In summary, CA is complex, but it’s been no less screwded the pooch than the rest of the country, and it’s a deliberate process by the GOP and the 1%.
It’s class war, simple and pure. It’s sure as shit not all about Prop 13 (although THAT could use a revision or two).
Thanks Pun, for your comment and thanks to others also with a bigger lens to view this all by . . . and folks, by no means should ANY of you, in CA or not, miss the fact that these are incredibly dire times.
Pensions are on the line with the auto industry. People’s parents are gonna be cut off, and out in the streets.
Jobs are going gone, and parents offspring are gonna be cut off, and out in the streets.
This is an out and out class war and these are dire times. No matter WHAT your position is if yer not one of the 1%, yer ass is on the line.
And it don’t matter if yer ass is gay, straight, black, brown, yellow or white, pentacostal, baptist, agnostic, fundamentalist Christian, Muslim, Bhuddist or Hindu, Sikh, etc. If yer not of the 1%, yer ass is on the line, and you’d BEST start looking around and figure out who ya hook up with before we’re ALL slum fodder.
I think the Fundie’s will suffer much worse than the rest of us who want to learn how to play with each other nicely as our asses are on the line for survival. And I wish The Fundie’s What They Asked For. *G*
Harumph.
Good stuff, although I’d say the GOP and ReThugs (1%) goal IS to break it all, so they can funnel the last of the wealth upwards, and more easily control the leftovers comprised of third world class masses we are destined to become.
And they are well on their way to doing it all, in CA and across the US of A . . . there IS a Dire Wolf At Our Door, it’s not an apparition . . .
“Don’t murder me, I beg of you don’t murder me, please, don’t murder me.”
Cue Pedal Steel Solo.
*G*
Ian do you live in California. We have had Prop 13 since 1978 and not only survived but have been the 6th or 7th largest economy on earth for all of these years. The problem is we have lost the real estate tax base due to the rapid decrease in home values and foreclosure. This coupled with Arnold’s refusal to take the DMV registration rates back to what they were pre Grey Davis and the huge surplus that caused Davis to reduce them has raised havoc in CA. So unless you live here and own real estate shut up.
It’s like the Lone Ranger thinking he and Tonto were in this together.
Who wants schools? Not those racist retireds in San Diego and Riverside. They’ve raised their kids, now they see taxes as educating the children of them furriners. And those who fly from LA to San Fran if they go, they have no investment in Interstate 5 or 280 neither. Health care? They pay cash in La Jolla so there’ll be no record.
Somehow there is a mistake often when discussing conflict. We think everyone is on the same team. I mean, who would blame the Greeks because they left Troy in worse shape than they found it? The Republicans are happy to see government fail because that means the agency is weakened which taxes and regulates them, and whatever else they need they live high enough up the hill so the floods won’t touch ‘em.
The trouble with California is the Joads, and the military retireds, and the huge tsunami of refugees else, who come to the golden land and are so dejected to find only themselves once the sun goes down. And the students, gypsies who carry local elections and vote in huge bond and finance initiatives for someone else to pay for. And the sappy politicians, who spatronize the mob like Timon and fiddle like the grasshopper all the summer season and then the cold shock hits.
My wife and I, though, on such dark days, we hear the raven cough in winter sticks.
Kevin Drum has been posting about this recently at his MotherJones.com blog and he’s said there are also limits on how the assembly might CUT spending to avoid the deficits. It’s really screwed up.
Prop 13 is less than perfect but *not* because of lowered tax revenue. California ranked 16th among states in per capita spending on schools in 2005-6.
http://www.ppinys.org/reports/…..ending.htm
So, Ian baby, there is no need to raise property taxes. In fact, as the housing bubble deflates, property taxes on those long-term owners continues to rise the maximum allowed by Prop 13 and the revenue stream receives a welcome buffering.
Shallow, knee-jerk commentary is as bad when it’s liberal as when it’s conservative.
I am a former Californian. I got my secondary and first round of higher education (through my B.Sc.) in California. I have family members who still live in the Golden State.
Folks, the Governator failed you, he was captured by his aides. The one thing that Arnold could have done for the state is to tell you all that it’s time to wake up and smell the coffee. It would go something like this:
“People of California, there is a distasteful fact that you need to understand. Once you understand the distasteful fact, you have to make a choice.
“The fact is this. There are plenty of examples of high-tax, high-service governments: Minnesota, Wisconsin, Massachussetts, etc. There are also plenty of examples of low-tax, low-service governments: Texas, Alabama, Mississippi come to mind. It might be possible to have a high-tax, low-service government, but I can’t think of any examples.
“What you cannot have is a low-tax, high-service government. And yet, this is what the citizens of California profess to want through their votes on ballot initiatives. People of California, there is no Santa Claus, nor is there an Easter Bunny nor Tooth Faerie.
“You must make a choice: you can have low taxes, but it must be accompanied by reduced services. Or you can have the high service level Californians expect, but it must be paid for. You cannot have both, we cannot run State government without a budget, local governments cannot budget without a State budget. You must choose.”
Arnold could have said that, because his political career is over. He can’t run for governator again, he is ineligible to run for President (thank doG for small favors.) He has shown no interest in any other govermental office. But his staff do have to worry about their next job, and apparently they’ve kept him from speaking the truth to California.
As far as tax dollars returning to California go, where is California’s low-level radioactive waste dump? How about a high-level waste dump? Air Force bases? I lived in Riverside when people hated the BUFFs and tankers flying out of March AFB. We’re not on the Federal dole here in NM: we’re providing facilities that Californians NIMBY out of existence there.
As far as what needs to happen, first things have to happen first. You’ve got to dump that ridiculous supermajority requirement to pass a budget. Then, you need to modify your Constitution to limit ballot access for citizen initiatives. Make citizen initiatives get a 60% supermajority for passage, referenda can pass with 50%+1. Why? A referendum has been through the legislative hearing gauntlet, and debated thoroughly on its merits. Citizen initiatives don’t get that sort of vetting, and consequently are notorious for unintended consequences.
Here’s one unintended consequence of Prop 13. At the time 13 passed, most of the property tax burden in the State was carried by commercial properties. That is as it should be: income generating properties are more valuable than residential properties. The last figures I’ve seen indicated that commercial property is much less important than residential property as a source of property tax revenues.
This happened because commercial property turns over at a much lower rate than residential property. It’s obvious in hindsight, but no one forecast it at the time 13 was under consideration.
Leave prop 13 alone. It’s the fairest piece of legislation this state has ever produced.
Every time chicken littles go looking for cash, they think there’s gold in them thar homes. There isn’t.
I just graduated two kids out of California schools. They’re fine. They can read, write and even understand a bit of the calculus. They both made it into the colleges of their choices.
The incentive prop 13 provides to NOT churn homes and businesses keeps us out of the hands of unscrupulous speculators better than most states.
Want more cash? Raise sales tax, but do it PROGRESSIVELY, i.e. a sliding scale like income tax. You buy a fifty dollar bicycle you pay 5% sales tax. You buy a $50,000.00 SUV you pay 20%. No exceptions. No deductions. No loopholes. You buy, you pay. Can’t afford it? Don’t buy it. The budget would balance in three years.
But don’t raise my property tax because the neighbor churned and flipped my street into seven digits when I bought in five decades ago. Sure, tax me when I sell and REALIZE that gain, but not while I’m living on skinny wages.