Posted on 01/25/2009 10:59:35 AM PST by NormsRevenge
California could pay the price for the foreclosure crisis for years to come, thanks to Proposition 13, the 1978 voter initiative that caps property taxes.
As banks feverishly dump foreclosed homes at cut-rate prices, and as neighboring homes change hands at similar bargain-basement rates, those amounts are enshrined as the new basis for determining property tax until the homes are sold again.
Under Prop. 13, that basis can rise a maximum of just 2 percent a year, even if the home is worth significantly more. The consequence is likely to be a revenue crunch for the public services funded by property tax revenues.
...
Gus Kramer, Contra Costa assessor, puts it in stark terms.
"It's going to be an absolute economic disaster in Contra Costa County and surrounding areas," he said. "Everyone thinks this is like the last recession with values going down and that when they come back there will be a resurgence - but it's not going to be like that. It will be years before (the tax roll) recovers because all these people are selling (distressed) homes, banks are selling at deep discounts, values are going down from 50 percent to 75 percent. The people buying them will hold onto them for five, six, seven years. The tax base is not going to recover anytime soon."
...
Consider that almost 250,000 homes in California were repossessed by lenders last year, according to ForeclosureRadar.com, and you get a sense of the mega dollars lost to the cities, counties, K-12 schools, community colleges and special districts that rely on property tax revenue.
(Excerpt) Read more at sfgate.com ...
In a few years the Federal gubamint will own everyone's houses and properties anyway.. or a major stake in same.
The state is broke due to illegal aliens, regulations, hogh taxes and endless benefits for state govt workers. People are fleeing CA like it is a war zone. Sadly the people fleeing CA will turn other states into lib toilets. Ex-California stooges have ruined many states. Same thing is happening to North Carolina aka S. NJ.
Said isn’t smart enough to ‘get it’.
Oh golly. THe scum in governemtn just can’t wait to raise those property taxes, can they?
Plus, it doesn't matter what the purchase price is or what it can be sold for. That is not relevant. It is based upon what the house in nearby neighborhoods have sold for in the past 12 to 16 months.
As an example, your house can be appraised at $250,000 even though it might only be worth $175,000 in the current market, if it can be sold at all.
The moral for California and all governments is for them 'to live within their means'.
Remember, "what goes up can and does come down". We are just now being reminded of that which has been conveniently forgotten.
Here in Florida ovver the past 6 years, I've seen the price of property (an acre of land across from my Dad's house went from $7000 to $30,000 and actually sold for that!), with and without houses, jump to the moon with nary a word on what the local governments will do with the sudden flush of cash. Suddenly, it stops, property values drop and now I hear about the poor, cash-strapped local governments having to cut back and drop services.
My question is: what did they do with all the money beforehand?
Funny... no one ever mentions how perhaps lowering spending to the level of taxes collected by the government as being a possible alternative.
Here's a sample from one of our property tax bills...
First you have the GENERAL TAX LEVY which is the big number on the bill. Below that is all of the crap that was added on by voters post prop 13...
VOTER INDEBTNESS
Metro Water Dist
Munic Lighting
Community College
Unified Schools (this was $1,341.00)
General Fund
Below this is the DISTRICT ASSESMENTS that includes Flood Control, Health Lic Fees, Mosquito, Trauma & Emergeny Srv. Sanitation District, etc.
Other voter/district taxes that may be included are library taxes (for a new library), park disticts, community colleges, other bonds, etc.
In short...it's a bunch of crap and an easy scapegoat to blame everything on Prop. 13. Politicians found a way to bypass Prop 13 a long time ago with their collection of fees, assesments, and bonds.
They’re right. Proposition 13 IS evil! Just think of the billions (trillions?) of untaxed value sitting out there just waiting to be ripped off by the legislature and used for various interest groups like the prison guards, school teachers, and other government employees -— not mention several million illegal aliens!
The government already owns your home. Don't pay your property taxes for a year and watch who shows up to claim it. Everyone is renting (taxes) from the government
“Sadly the people fleeing CA will turn other states into lib toilets. “
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As a Californian who may be fleeing the state, I strongly object to this assumption. I’ve seen it repeated on this board a number of times, and believe it to be false.
It is not liberals who will flee California. It’s turning into exactly what they want - a big monolithic high-tax mess. It is conservatives and libertarians, who are leaving.
There was a recent wave of California emmigrants who yes, are liberals, and yes they would tend to try to change where they went to. Those are the liberals who got out at the top of the real estate bubble - and who credit California policies with making them very comfortably wealthy.
That is not a description of the people leaving now. At this point, people are not leaving something which has been good to them. They’re leaving something which appears to be dissolving into chaos.
At least the Californians heading to red states.
We’re escaping. Not trying to take California with us! Most of us are looking for the anti-California at this point.
Relax. We’re friendlies.
You're just being insensative and mean-spirited.
Californians need to ask the not so simple question: what, exactly, is government supposed to do?
Some wit could have a lot of fun with this. Put every piece of California tax revenue and expenditure online, as a voter’s guide *game*. All the text in the game is colored red, showing more money going out than coming in.
Then, individuals can play the game by both raising taxes, if they choose, or cutting expenditures, if they choose. The objective is to get to “zero”, a balanced budget. And if you do so, you are rewarded by having the text turn from red to black in color. If it results in a budget surplus, the text turns green in color.
Certainly it is a popularity poll of government expenditures and taxes. But lots and lots of people might play the game, just to see if they can balance California’s budget.
The game has lots of ins and outs. For example, a player may want to cut salaries of State employees. But is that legally possible? If not, the game will not only have to block that action, but explain why.
This matters, because a lot of what the State spends is mandated either by the law, or by State and federal judges.
It would be a heck of a game, and I bet it might become popular enough to even sell it.
They really HATE Prop 13, but We the People passed it hugely. They are always wanting more money. There is simply NEVER enough.
It's easier to raise your taxes than weather an economic riot from the (ahem) needy.
The state could have kept a surplus and returned the excess property tax revenue during the run up in home values instead of spending it in wasteful new socialist policies, but I guess that would have actually made sense. It would then still have a surplus and a lower budget to deal with in this downturn.
“Relax. We’re friendlies.”
Sorry. I’ve met too many of you in Arizona.
Y’all are conservatives by California standards - but you’ve grown accustomed to parks, sidewalks, free care, etc. You THINK you are conservative because you have a vague idea it must be paid for...but you don’t REALLY believe that. In your heart, you know it is free.
Not you personally, BTW. I met some real conservatives when I lived for 3 years in California. As a rule of thumb - if you voted for McClintock over Arnold, you’re welcome to move. If you voted for Arnold...well, stay put. You deserve your hellhole.
I’m with you, California. We conservatives are fleeing. We’re the ones with jobs who don’t happen to want to pay for free tuition through college for every illegal alien, who don’t happen to want to send our kids to Marxist Propaganda Schools, who think that just MAYBE the idiots up in Sacramento could learn to live within their means— since they represent US.
We sort of want to see how they’ll do things when we leave with our money and our jobs, and only those on the dole are left.
Think of how the immigrants from Communist countries RECOGNIZED Obama’s shenanigans from Day One — so will we ex-Californians be.
LOL.
Thanks for your feedback.
Arizona’s never even been on my list of likely destinations.
Too much like SoCal.
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