CA: Prop. 88 could bring $50 tax to your door - Flat fee would affect all property owners

Daily Bulletin ^ | 7/30/06 | Harrison Sheppard

[NormsRevenge]

SACRAMENTO - Every property owner in California, no matter how big or small or valuable the parcel, faces paying a flat $50 tax to fund schools under a measure voters will be asked to approve in November.

Although it's still early in the election season, the move already is generating criticism from taxpayer groups and property owners who say it's a regressive tax and adds to the burden on average citizens who are already overtaxed.

Proponents of Proposition 88 - authored by EdVoice, a coalition that includes backing from such wealthy philanthropists as Netflix CEO Reed Hastings, Silicon Valley investor John Doerr and SunAmerica Chairman Eli Broad - say the state's schools are in dire need.

But critics note the measure places the same tax on a small one-bedroom home in Reseda as it does on a mansion in Bel Air or a massive farm in the Central Valley.

"I think it's going to look foolish to have the two primary proponents, Reed Hastings, the owner of Netflix, and John Doerr, another Silicon Valley billionaire, impose a tax on everyone else that hits their multimillion-dollar mansions the same as a struggling family," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "I'm not sure they have completely thought through how that's going to be perceived."

The measure would generate about $500 million by placing a $50 tax on every property in the state. The funds would go to specific K-12 education purposes, including class-size reduction, textbooks and school safety, plus facilities money for schools that have not received state bond funds.

"Californians want better schools," said Paul Mitchell, political director of EdVoice. "They're very optimistic, they're hopeful, but they also don't want to spend money on things where they think there might be waste. This is written so it ensures dollars go straight to the classroom."

The funds would come on top of a 2006-07 state budget that already calls for spending $55 billion on education, an increase of $3 billion from the previous year. Additionally, the November ballot has a $10.4 billion bond measure for school facilities.

State Superintendent of Public Instruction Jack O'Connell, who supports Proposition 88, said the needs still far outweigh the available funding.

"The needs are critical," he said. "Public education today is still underfunded. In terms of dollars on the per capita basis, we lag behind all but half a dozen states.

"Is it a panacea? No. Will it help, will it make a difference in students' educational opportunities? The answer is definitely yes," O'Connell said. "It's an opportunity to provide additional resources in the classroom."

Mitchell said proponents decided to go with a flat fee rather than one tied to property values because they did not want a tax that increases as values rise. They chose $50 because they felt it was small enough to not cause financial hardship or have a substantial impact on a person's decision to buy a property.

But the measure has another quirk that could place a proportionally higher burden on timeshare owners.

Depending on local county tax laws, every individual owner of a timeshare could have to pay the $50, meaning a single unit could be taxed up to 52 times.

The timeshare provision varies according to an individual county's tax policies, according to officials in the timeshare industry.

If the county sends separate tax bills to each individual owner of a timeshare, those individuals are likely to each have to pay $50.

But if the county sends a single bill to the timeshare association or management company, which typically then sends its own bills to the individual owner, it is more likely they would only have to split a single $50 payment among all the owners.

That means in some counties, if a timeshare is divided among 52 weekly owners, the total new tax bill on that unit would amount to $2,600. In other counties, it would total $50.

"It's very concerning because timeshare is a vital part of the California tourism economy and one that has been continuing to grow in recent years," said Jason Gamel, vice president of the Washington-based American Resort Development Association, which represents the timeshare industry. "It could be detrimental to the timeshare industry and to residents of California."

California has about 12,000 timeshare units, generating at least $3 billion in direct and indirect economic impact, including $418 million in tax revenue, according to an ARDA study.

Most of them are concentrated in San Diego, Riverside County, Anaheim, Big Bear, Mammoth, Carmel and San Francisco. The national median cost of a one-week share of a two-bedroom timeshare is about $17,000.

Mitchell said proponents are still researching the accuracy of the claims about the effect on timeshares, but agreed it is likely to vary by county.

Still, he added, "I don't think timeshare owners are more important than class-size reduction and kids."

[NormsRevenge]

Knock Knock..

Who's there?

50 bucks Please

Get lost!

[BenLurkin]

Money is not the answer to the problems in California schools.

[calcowgirl]

The folks backing this are the Venture Capitalists and their cronies trying to control education through Charter Schools. All their buddies have started businesses in the education field. They consistently pop-up in both education and the Green movement. Of course, they don't want to invest their own money so their first move was to pass Prop 39 making it easier to issue bonds (voiding the prior 2/3 requirement). John Doerr, Brooks Byer, Reed Hastings, Eli Broad, Dick Riordan--even Michael Milken. They've all moved into the Education biz and are looking for a buck.

[umgud]

Hey, it's only $50 bucks, don't be such a skinflint. I'm sure it goes to a good cause.

[NormsRevenge]

I guess that would mean the folks pushing this aren't content just being the Idle Rich anymore. eh? ;-)

[calcowgirl]

The robber barons are just looking for another target. With 50% of
California's $100+ billion budget going to education, they've found fertile ground.
;-)

[Trajan88]

San Fran... what the hell do you do with that 22+% tax on overnight hotel parking?

How about taking care of the militant homeless issues instead of flushing it down some botomless vortex (aka the toilette)?

[NormsRevenge]

and then you have those who have green interests in solar and renewable energy and obtaining subsidies to provide for more of same by triyng to get an oil tax passed, not to mention the stem cell crowd, who await their chunk

California is under attack by all sorts of direct democracy forces it appears. and those in power seem to be OK with it.. actually are involved in one way or other in ensuring they do get passed.

[television is just wrong]

California is TOOO heavily laiden already with taxes. DEMS, you can't have any more...

[goldstategop]

Yep, its a regressive tax even by liberal standards. Every one pays the same rate, regardless of whether they're a millionaire living in a mansion or a retiree living in a bungalow. And it has a "poison pill" clause that allows the parcel tax to be increased $50 every four years without a vote of the people. For our educrats and tax and spend liberal venture capitalists, the fact half of our state budget goes to education isn't enough. Shortfall of funding? There will always be. What was it Eldridge Cleaver said the other day? "Tain't enough!" That's the view of Reed Hastings and Jack O'Connell. You see, as property owners you haven't coughed enough. You need to cough up still more - "all for the children," of course. Now where have we heard that one before? Ler's hope the voters shoot down this Proposition 88 tax increase turkey this November.

(Go Israel, Go! Slap 'Em Down Hezbullies.)

[jocko12]

Here is one no vote on prop 88.

[yankeedame]

Money is not the answer to the problems in California schools.

No, but it is to every problem (real or imagined) a liberal comes up against.

[SFConservative]

So these people want to add $500M on top of $55,000M, increasing the total by less than 1 percent. The same "benefit" could be realized by scrubbing 1 percent of waste and low-value activities out of the $55,000M which I will bet is a piece of cake.

The absurdity of this proposition is in how it promises to so something so proportionately tiny that it could be easily done with a bit of serious management review and money reprogramming. This should include firing the 1 percent of staff that is the lowest performing - they probably do nothing productive anyway and are likely counterproductive.

[calcowgirl]

and then you have those who have green interests in solar and renewable energy and obtaining subsidies to provide for more of same by triyng to get an oil tax passed, not to mention the stem cell crowd, who await their chunk

It's the same crowd--a handful of billionaires who want even more of your money.

California is under attack by all sorts of direct democracy forces it appears...

YUP!

[calcowgirl]

And it has a "poison pill" clause that allows the parcel tax to be increased $50 every four years without a vote of the people.

Thanks for keeping that one in the forefront. There is bound to be an expensive campaign to pass this--the voice of opposition must speak loudly and often.

[goldstategop]

The proponents will do what they did with Prop. 39. They'll mention the money going to schools and how it boosts accountability and they'll never once mention the two little words: tax increase. Sure enough, the parcel tax is deceptively labeled the "Classroom Learning And Accountability Act." The title never so much as even hints it intends to impose a first ever statewide property tax. That's why its imperative to inform voters of the truth: that behind the nice slogans is a bid to raise their tax burden.

(Go Israel, Go! Slap 'Em Down Hezbullies.)

[Tzimisce]

Pay your taxes. Millions of non paying illegals need the money so desperately.

[Troublemaker]

Hey, I thought the lottery was going to take care of this problem? (eyes rolling)