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Old 01-31-2011, 06:23 PM   #101
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Originally Posted by Texas Proud View Post
Samclean... it is not a given that the gvmts bring in more income with higher property values... they are supposed to figure out their budget and then establish a tax rate.. I am not in Houston, but IIRC they dropped their rate a few times before the crisis since property values had increased... the problem is with the vast majority that do see the extra income as money that needs spending...

Although this statement is true in most states, it is not in California. California property tax rates generally are fixed at 1% plus any pre-prop 13 special assessment amounts that are usually a small fraction of a %. There may be local voter approved additional assessments that are recalculated each year based on the $ needed to service specific debt. However, there is no annually adjusting rate based on total assessed value on the rolls as is common elsewhere. Mello roos are not strictly property taxes but special arrangements with local government (sometimes they are federally deductible other times not).

In California local governments (ultimately) do bring in extra $ as values rise. If you google local newspapers you can see headlines about public schools cutting back school year length and other services because the school districts assumed that school funding generated by high property values were here to stay...in school districts outside of LAUSD they seemed to manage just fine on pre-bubble revenues but now the reduction is a crisis. It is telling as to whether this is a spending problem or a revenue problem.
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Old 01-31-2011, 06:35 PM   #102
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So why should your neighbor have to pay more than you?

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A valid question. Why should my neighbor pay more than the national average? Also a valid question.
The national average has nothing to do with it. The taxes are levied in the municipality you live and vote in.

I moved to an area with high property taxes. I don't like that in many ways, I think they waste a lot of the money, but I went into it with my eyes open. I can't really complain too much. But I would complain if some residents got a special deal.

I don't think they should cap rates for seniors either. I cringe when I hear "but I'm on a fixed income". BS, SS has COLA and when I retired I took inflation into account as much as one can. I'm OK with the 'reverse mortgage' deals they offer seniors, but I'd prefer the senior get the deal privately and just pay their taxes or sell.

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Old 01-31-2011, 07:03 PM   #103
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Getting rid of prop 13, and raising taxes on property would probably have some unintended consequences like lowering property values and creating a zero net gain for the state.

An early retirement forum is the last place I thought I would find people who want to raise taxes...on anything. You should all be so lucky as to have a prop 13. It limits the amount they can raise your property taxes each year to 2%...very fair I would say. They shouldn't be able to tax you out of your house because the values suddenly rise. Example...Rich foreigners bid up housing prices and drive up taxes, forcing elderly people on fixed incomes out.
But on the other hand, people new to an area or people buying their first home bears an arguably unfair share on the tax burden. It is hard to look at a neighbor paying far less than you for an equivalent home.
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Old 01-31-2011, 08:05 PM   #104
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It is collected by the counties, but all goes to the state, who then redistributes about half back to the counties. ...

The current governor wants to change this to leave more funds in place at the local level, and also move more service related decisions back to the local level. (Smaller state government, more local decision making.)
Wow, I didn't know that. Here in IL (at least my county), 100% of the property tax stays local (no farther than the County), zero goes to the State. By far the biggest % is to the local school district, then some breakdown for library, fire (police are part of the village expense, fire districts have different borders), county, community college, forest preserve and few more - a pretty small list, 16 items.


This sounds like a real large part of the problem, and a larger picture comes to light. Why collect local money, send it to the State to divvy it back to the local areas? Very inefficient, and creates a disconnect between pay-and-spend. It seems more like OPM to be spent - get yours!

Like-wise, why collect State money, send it to the Feds, and have the Feds divvy it up back to the States? Crazy.

Like-wise (to a somewhat lesser extent), why collect people's money, send it to the Feds, and have the Feds divvy it up back to the people? Crazy (except for a few things that the govt can do best).


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Prop 13 is the same as other tax exemptions. Why should renters pay a part of your home interest?
This isn't said to defend the mortgage deduction, just to explain it:

Renters effectively do get a mortgage deduction. The landlords take their mortgage interest as a business expense. This lowers the break-even point on average for renting out a place, so rents in a competitive market are cheaper by that amount (or something close to it). So the mortgage deduction just gets the home owner more even with the renter. In theory.

A simpler explanation is that politicians are buying the vote of homeowners and people who supply homeowners.

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Old 01-31-2011, 08:38 PM   #105
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The LATimes link is a political exercise. On that exercise you can cut EVERYTHING they give an option for and you still have to raise taxes to balance the budget. They don't break out the pensioners and a lot of sub-items, so they make it look like tax increases are inevitable. With the amount of spending that California is doing, I refuse to believe that spending cannot be cut more. It's just that nobody wants to face it. Sort of like Medicare and SS at the Federal level. It's a train wreck not quite happened yet.

I'm not sure I follow this. My understanding is the pension agreements in place are untouchable. Best hope on pensions is to alter the program for new government employees. If that's not the case that's great news.

Also curious what specific sub-items you're referring to.
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Old 01-31-2011, 09:26 PM   #106
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TexasProud,
It happens would happen when there is a mortgage on the home. As I said, I do not believe most mortgage companies will allow you not to pay the taxes. The tax lien is in a first position and places the mortgage in a second position. In a situation with a down market and a large tax lien the mortgage company would be at risk. The deferment has to be requested and many people do not know anything about it. You would hope someone would tell them, but hey who knows.
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Old 01-31-2011, 10:00 PM   #107
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"Jerry Brown pushes tax hikes" here.
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Old 01-31-2011, 11:18 PM   #108
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"Jerry Brown pushes tax hikes" here.
Nice headline. The tax hikes are already in place, but are due to expire this year. The push is to leave them in place, to cover almost half the budget shortfall. Without them, the cutbacks in non-federally mandated spending will be severe. Really severe. Try that LA Times California Budget Balancer with the 9.4 billion from continuing temporary tax hikes turned off.

In my tests, killing Medi-Cal, turning elderly and disabled to the minimum Federal mandate, defunding drug and alcohol treatment, jacking college costs up and shutting down the community college system, killing CalGrants financial aid, handing imprisoned illegals over to the Feds (who will release them), releasing 40,000 prisoners, shutting down prison rehab programs, cutting state payroll by 10%, shutting down funding for state parks, cutting the Legislature's budget in half, killing the California Conservation Corps (firefighters, flood and park maintenance), and cutting 30% from K-12 schools just barely brings the budget into balance.
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Old 02-01-2011, 02:16 AM   #109
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I have not read this entire thread but as a California resident I would throw out a few off-the-cuff remarks:

1. California should return to being a Republic! 17 states receive back less than what they send/pay to the Federal Govt and Cali is one of them..for each dollar sent to D.C. the state gets .78cents back which ranks it 8th worst amongst the Union. Interestingly, only 2 Sun-Belt states receive less than their $1 paid but they get it almost all back: They are Texas (.94c back) and Florida (.97c back). In nominal terms, Cali is easily the top revenue generator for Uncle Sam (30% greater than #2 NY) and if Uncle Sam cut a check to Uncle Cal to make up the difference for a single yrs worth of tax revenue not returned back to the state then that check would be 3-4x greater than the approx $21B state deficit.

2. State of California bondholders rank higher than all creditors except schools. Populist angst against teacher union pensions, prison guard pensions, etc. are fun political footballs to toss around amongst the political geeks in this day and age but basically nobody gets paid a cent until the bondholder is first paid in full. Now, if California were to divorce Uncle Sam none of the political footballs would be worth discussing much as the credit ratings would immediately increase to the highest levels and the spreads would tighten drastically.

3. California state politics is undoubtedly a disaster and frustrating to behold as a state resident. Democratic redlining and California's Constitution are now Sylla and Charybdis...the welfare state ain't going away but it can't grow at the speed it needs to grow at to fulfill it's desires. As a retired state citizen, I figure the best thing to do is to simply enjoy the political battles for the intrinsic comedic value when nothing else is on TV.

4. Prop 13...as a libertarian I wonder why we have a property tax in the USA to begin with. A property tax is basically the Number 1 plank in Karl Marx's famous 10 planks...the Founding Fathers started with the Freedom of Speech while Karl started with the Abolition of Private Property! Anyway, it's clear to me that the aforementioned Sylla and Charybdis political deadlock in California would be irreparably split to the Democratic side if they were to be able to siphon that teat...let's keep Prop 13 to make sure we have great political theater within California.

5. Finally, I'm not sure if I'll live here forever but I will state emphatically that Cali is one hellavu region on Earth...it really is blessed with amazing diversity in natural and environmental treasures.
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Old 02-01-2011, 07:46 AM   #110
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If CA. had all the money back they send to the feds the politicians would just spend it, and in x years they would be in the same boat they are in. Not until the people of a state/country realize you can't give away the farm to non productive people and systems will this be corrected. The rich will move out, the poor will move in and the middle class will pay for it all.
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Old 02-01-2011, 08:32 AM   #111
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1. California should return to being a Republic! 17 states receive back less than what they send/pay to the Federal Govt and Cali is one of them..for each dollar sent to D.C. the state gets .78cents back which ranks it 8th worst amongst the Union.
Here's the problem with that argument: "California" sends almost no money to the federal government. That money is sent in by US citizens and corporations that happen to be in California. If money is to be returned, to which entity would it be fairest to return it?
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Old 02-01-2011, 10:42 AM   #112
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I have not read this entire thread but as a California resident I would throw out a few off-the-cuff remarks:

1. California should return to being a Republic! 17 states receive back less than what they send/pay to the Federal Govt and Cali is one of them..for each dollar sent to D.C. the state gets .78cents back which ranks it 8th worst amongst the Union. Interestingly, only 2 Sun-Belt states receive less than their $1 paid but they get it almost all back: They are Texas (.94c back) and Florida (.97c back). In nominal terms, Cali is easily the top revenue generator for Uncle Sam (30% greater than #2 NY) and if Uncle Sam cut a check to Uncle Cal to make up the difference for a single yrs worth of tax revenue not returned back to the state then that check would be 3-4x greater than the approx $21B state deficit.

2. State of California bondholders rank higher than all creditors except schools. Populist angst against teacher union pensions, prison guard pensions, etc. are fun political footballs to toss around amongst the political geeks in this day and age but basically nobody gets paid a cent until the bondholder is first paid in full. Now, if California were to divorce Uncle Sam none of the political footballs would be worth discussing much as the credit ratings would immediately increase to the highest levels and the spreads would tighten drastically.

3. California state politics is undoubtedly a disaster and frustrating to behold as a state resident. Democratic redlining and California's Constitution are now Sylla and Charybdis...the welfare state ain't going away but it can't grow at the speed it needs to grow at to fulfill it's desires. As a retired state citizen, I figure the best thing to do is to simply enjoy the political battles for the intrinsic comedic value when nothing else is on TV.

4. Prop 13...as a libertarian I wonder why we have a property tax in the USA to begin with. A property tax is basically the Number 1 plank in Karl Marx's famous 10 planks...the Founding Fathers started with the Freedom of Speech while Karl started with the Abolition of Private Property! Anyway, it's clear to me that the aforementioned Sylla and Charybdis political deadlock in California would be irreparably split to the Democratic side if they were to be able to siphon that teat...let's keep Prop 13 to make sure we have great political theater within California.

5. Finally, I'm not sure if I'll live here forever but I will state emphatically that Cali is one hellavu region on Earth...it really is blessed with amazing diversity in natural and environmental treasures.

First, was California a Republic Decided to look it up.... the answer is NO..

"The California Republic, also called the Bear Flag Republic, is the name used for a revolt against Mexico proclaimed by California settlers on June 14, 1846, in Sonoma in the then-Mexican province of California. Declared during the Mexican–American War, the "republic" was a popular revolt; the participants never formed a government, and the republic was never recognized by any nation. The revolt lasted 26 days, at the end of which the U.S. Army took control of the area. It is most notable for creating the "Bear Flag", with insignia that appear on the modern state flag."

To bad you can't do it anyhow... there is no process for leaving the US... there are a few Texans who think that Texas can, because we were not annexed like all other states... we became a state by treaty... that is why our state flag can be the same size and displayed along side the US flag... part of the treaty.. other states this is not true... BUT, some say that because the US broke the treaty, Texas can become a Republic again... I do not think it is true after reading parts of the treaty... but some do..


Also, I would suggest you get some of you Cali political people in power more often... Texas used to be down where Cali is now on the 'money sent back' ranking... but a few Presidents and top politicians changed that... I guess Regean (back when) and Polosi did not do a good job...
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Old 02-01-2011, 06:58 PM   #113
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... I will state emphatically that Cali is one hellavu region on Earth...it really is blessed with amazing diversity in natural and environmental treasures.
Amen Brotha
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Old 02-01-2011, 07:55 PM   #114
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... I will state emphatically that Cali is one hellavu region on Earth...it really is blessed with amazing diversity in natural and environmental treasures.
Amen Brotha
And yet, you want others to pay for it.

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Old 02-01-2011, 08:13 PM   #115
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And yet, you want others to pay for it.
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Old 02-01-2011, 08:16 PM   #116
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The best beer is free beer.
Understood, but a bad analogy for me - I'll pay for a well crafted beer before accepting a 'free' macro-swill anyday.

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Old 02-03-2011, 03:37 PM   #117
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I am not sure this is the place for this, but this thread got me thinking about the state of Gov. Pensions. I found the article that give the 11 states that are in trouble, and I found the following:

http://www.slge.org/vertical/Sites/%...4BABC41%7D.PDF

I thought it was a good article and if you look at the chart at the end you get a pretty good idea where the different pension funds are at. DC funds are at 100%, while the top three states in trouble are down in the 40% range.
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Old 02-04-2011, 08:59 AM   #118
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I'm sorry there is just no logic to charging me more in property tax because someone is willing to pay more for the house nextdoor to me...period.

I made an agreement with the state long ago...they were able to raise my taxes 2% per year...very fair.

If my neighbor can afford to spend more, put in a pool, add on a room, move, or whatever he does to raise the value of his home...it has nothing to do with my taxes.

If wealthy REITS come in and buy homes around me at inflated prices for investment...that has nothing to do with my taxes.

If the Fed lowers interest rates causing housing prices to rise...that has nothing to do with my taxes.

If banks keep foreclosures off the market to keep prices high...that has nothing to do with my taxes.

If a certain church moves into the area causing increased demand for local housing, raising prices...that has nothing to do with my taxes.

I could go on and on.
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Old 02-04-2011, 12:08 PM   #119
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I'm sorry there is just no logic to charging me more in property tax because someone is willing to pay more for the house nextdoor to me...period.

I made an agreement with the state long ago...they were able to raise my taxes 2% per year...very fair.

If my neighbor can afford to spend more, put in a pool, add on a room, move, or whatever he does to raise the value of his home...it has nothing to do with my taxes.

If wealthy REITS come in and buy homes around me at inflated prices for investment...that has nothing to do with my taxes.

If the Fed lowers interest rates causing housing prices to rise...that has nothing to do with my taxes.

If banks keep foreclosures off the market to keep prices high...that has nothing to do with my taxes.

If a certain church moves into the area causing increased demand for local housing, raising prices...that has nothing to do with my taxes.

I could go on and on.
Let's take you attitude to the extreme.... because 2% is very low IMO... (here we have 10%)....


Say NOBODY moved.. and there was nobody coming into the state... (this is my hypothetical).... and now inflation starts up and is 10% for 5 years... but the state can only increase your taxes (and everybody else as there is not movement)... even if they do not increase services etc.... the state will not have enough money to pay for the services you need...


If you are going to spread the taxes around by property tax (you can argue if this is right or not... but we are talking about this kind of tax)... then taxing at the current value is the fairest that I can think of... you can add exceptions etc. if you wish for special cases...

Your gvmt is providing services that were voted on by your reps... you should have to pay for them...

I know you will disagree.. that's fine with me... but I would hate to be living around a lot of people that thought like you (not trying to be negative... just saying)...
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Old 02-04-2011, 12:22 PM   #120
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I'm sorry there is just no logic to charging me more in property tax because someone is willing to pay more for the house nextdoor to me...period.
More rationalizing?

If your house has the same market value as the house next door, why shouldn't you pay the same in property taxes? Don't you receive the same police protection, fire protection, roads, etc?

Let's see - my neighbor's houses are ~ the same value as mine, one has lived there ~ 20 years, the other ~ 2 years. Why should one pay more or less than the other for common services? I just don't see how time is a factor in this.

You seem bent on justifying that it is OK for you to pay less for these things than your neighbor.

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I made an agreement with the state long ago...they were able to raise my taxes 2% per year...very fair.
How is it fair, since people who move get this reset and then pay a higher amount? Now, if the State agreed not to increase spending by more than 2% each year, I could see that. But then that 2% would be shared fairly by everyone.

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