Measure A has been an eye-opening experience, perhaps, for a number of people in this community. In an educated community like Davis, one would think we would understand that the reason the school district was pushing for a ridiculously regressive tax is that it had no other choice.
But sadly, a lot of people have made public comments that belie their basic ignorance of the law or California’s tax structure.
We have also known for some time that, while Proposition 13 was passed to protect current homeowners from being taxed out of their homes, there were huge problems with the law which was far too radical in its fix (with taxes limited to 1% of a home’s value at time of purchase, with a cap on annual increases of 2%).
This has led to huge inequities between tax rates for people who live in identical homes but are paying hugely varying taxes on them. While it may have protected some seniors, it has hammered young people.
Wrote Steve Lopez in an LA Times column aptly titled, “It’s time to tinker with ‘untouchable’ Prop. 13,” “We’re still paying for Proposition 13’s failings in countless ways, with local governments and school districts endlessly hammered. And, in order to make up for our lower property taxes, California has high income and sales taxes compared with other states. But that has made for a revenue stream that rises and falls with the economy, crippling the state when the economy is in the dumps.”
And while Proposition 13 has helped one class of people, it has made it extremely difficult for most local school districts to raise local money. The result is that the state has taken over funding education and when the economy is down and the budget is in the red, education gets hammered.
But it is worse than that, and Proposition 13 is not the only culprit.
One point of controversy that has arisen is why should seniors, regardless of income, get exemptions. The result of that is a number of wealthy seniors have taken full advantage of the law.
This is part of Proposition 13. As we reported earlier this week, “Proposition 13 prohibits parcel taxes from being based on a property’s value or on an individual’s income.”
We can add, “State law does not permit parcel taxes to be waived or reduced based on property owners’ income or financial resources, but it does permit school districts to provide an optional parcel tax exemption for senior citizens (age 65 or older).”
Moreover, by its nature, a parcel tax is a flat rate tax which means that a property owner who owns a million dollar home will pay the same $200, if Measure A passes, as that paid by an owner of a more modest property.
The parcel tax, thus, is a horribly regressive tax, but there is no alternative for the school district.
California Government Code section 50079, subsection B defines special taxes: ” ‘Qualified special taxes’ means special taxes that apply uniformly to all taxpayers or all real property within the school district, except that ‘qualified special taxes’ may include taxes that provide for an exemption from those taxes for taxpayers 65 years of age or older or for persons receiving Supplemental Security Income for a disability, regardless of age.”
State law does not permit school districts to raise money in any other way locally. Under Article XIII-C of the California Constitution, “All taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes.” Thus, a school district cannot impose an income tax.
Property owners have, of course, other advantages as well. It takes a two-thirds vote to pass the tax by a vote of the people. That means for every person in opposition it takes two people in support.
Despite this huge advantage, people have made the argument that people who are exempt from the tax or people who are not home owners should not get to vote to impose a tax on people who will be paying the $200.
By that logic, they want their two-thirds voting advantage and to exclude people from voting. They seem to forget the entire purpose of the two-thirds vote was to address this very issue.
The school district is pushing for the only tax they can get, and allowing the only exemption they are allowed to make. If people do not like it, they ought to reform the tax code.
As Mr. Lopez notes however, “Proposition 13 is untouchable because it’s political dynamite.”
At the same time, he adds, “But Gov. Jerry Brown is old enough that he doesn’t have to worry about his political future, only his political legacy.”
There is one commonsense reform that would fix at least some of the problems. As you recall, one of the reasons for Prop 13 was that if taxes were assessed based on current assessed value, people whose income was not keeping up with the rise in property values could be taxed out of their homes, due to roaring real estate costs.
By capping those taxes, it fixed the problem, but created a lot of new problems. One of them is that it was growth-inducing. One way California was able to generate new revenue was to build more and more housing. New houses are, of course, assessed at higher levels, theoretically producing more revenue, but at the same time, creating greater need for services.
A lot of communities paid for that strategy with the collapse of the real estate market, which forced them into the red.
As California growth flattens and real estate prices either drop or level out, this strategy appears to be on its last legs.
There are a couple of suggestions floating around as to how to increase the revenue, while not putting seniors out on the streets.
One idea that Mr. Lopez cites comes from Alan Auerbach, director of UC Berkeley’s Burch Center on Tax Policy and Public Finance.
Mr. Lopez writes, ” ‘You could do a gradual phase-in’ of a new system, Auerbach said, but everyone over a certain age would get a pass. For younger homeowners, a gradual property tax increase would take place over several years, based on market value rather than on when a home was purchased.”
However a bigger factor comes from Davis resident Lenny Goldberg, who heads the California Tax Reform Association.
He recommends a policy that would stop the windfall tax breaks for commercial property owners.
“In virtually every county in California,” Mr. Goldberg said, “commercial property owners are paying a much smaller portion of the total property tax burden since Proposition 13.”
Writes Mr. Lopez, “One reason is that commercial property doesn’t change hands as often as residential property, so it doesn’t get reassessed as frequently. The other reason, Goldberg said, is that commercial property owners have exploited “huge loopholes” by transferring properties to various partnerships and affiliates and avoiding reassessment.”
Lenny Goldberg estimates merely eliminating the inequities and abuses would produce an additional $8 billion to $10 billion in property taxes.
“When I suggested that the business lobby would surely crush any such attempt, he argued that the current system is so inequitable, it saddles new businesses with onerous taxes and stifles economic development,” Steve Lopez reports.
Obviously, that would require the legislature to fix that problem, but that would reduce or eliminate about one-third the current deficit and eliminate most of the cuts to education that we will see in this budget.
The bottom line from this discussion is that the district, facing a $6 million shortfall, has limited options. The only alternative I have seen proposed was to simply cut teacher positions to bridge that gap.
The problem with that suggestion is it would be devastating to the district.
The district has 350 general education classroom teachers. A reduction of $6 million is about 90 teachers. This would be a 25% reduction in classroom teachers.
This would put class sizes 35-40 across the all grades.
It would mean the elimination of all course offerings at secondary level that cannot load 40+ students.
It would mean elementary classrooms without open space for reading. It would be little or no attention to individual student needs.
Is that the district that we want? Those are the facts, and it is the choice of the voters which way they want to go.
—David M. Greenwald reporting
Or maybe the system could be changed to where renters pay their fair share?
“Property owners have of course other advantages as well. It takes a two-thirds vote to pass the tax by a vote of the people. That means for every person in opposition it takes two people in support.
Despite this huge advantage people have made the argument that people who are exempt from the tax or people who are not home owners should not get to vote to impose a tax on people who will be paying the $200.”
So instead of only one it takes two yes voters who have no monetary stake in a measure to impose a tax on someone else in order to cancel out their no vote. That’s so fair.
CA is in fiscal trouble, IMHO, bc it has created a labryntine system of services that most other states do not provide. Let’s just take our local gov’t as a for instance. Where I used to live, we did not have fancy garbage pickup w three different trucks, one for regular trash, one for recylables, one for yard clippings. In my day it was one truck once a week, period. Nor were we provided with 3 trash containers for each type of refuse – we were expected to purchase our own trash cans. Nor did we have street sweeping either. Nor did we have “open spaces” between houses that needed the gov’t to take care of. Everyone had their own yard which they maintained themselves.
CA as a state has become overburdened and too reliant on gov’t to provide all sorts of Cadillac services. I got a real eyeful as to how gov’t services have profilerated to a ridiculous degree when I went to budget hearings at the county level, and I’m sure it would be monumentally worse at the state level. And we have gov’t officials sitting around doing nothing but planning for ways in which they can spend MORE taxpayer money above and beyond the ridiculous services we pay for now – like the high speed rail system. LOL
And I have to say, we are not the only state that engages in this kind of ridiculous spending. MA was engaged in the gov’t boondoggle of the century – “the BIG DIG” – thanks to Sen. Ted Kennedy. It was one of the biggest gov’t ripoffs in this century. What started out as funding for a better highway system through parts of the city of Boston, ended up funneling money to art museums, and other completely unrelated entities. In consequence the cost overruns were enormous, and so were the overrun of the number of years to complete the project. It was a standing joke that most of the money found its way into the pockets of the Boston Mafia.
We need to streamline gov’t and make it more accountable to the taxpayers. Something, by the way, that Senator Wolk has been pushing for. What has happened is that gov’t is more about CREATING NEW SERVICES that it convinces taxpayers they just cannot live without, and the gov’t makes sure to carry out those services in the most expensive way possible. And on and on it goes, until gov’t becomes so large it implodes upon itself as not sustainable, which is what is happening now.
And the cost of providing these services is mostly done on borrowed money, which makes the entire thing one big Ponzi scheme – a house of cards just waiting to tumble. What a mess. But to simplistically blame Prop 13 or the 2/3 majority vote needed to pass impose tax increases for all CA’s fiscal problems misses the mark by a mile. There are so many more problems that have contributed to CA’s fiscal crisis…
[quote][b]The school district[/b] [b]is[/b] pushing for the only tax they can get, and [b]allowing[/b] the only [b]exemption[/b] they are allowed to make. If people do not like it, they ought to reform the tax code.
[/quote][quote]Or maybe [b]the system could be changed to[/b] where renters [i][or, rental property owners][/i]pay their fair share? [/quote]The District has full control of whether to exempt seniors. The District has full control over whether the 10-1 differential in living unit ‘prices’ is appropriate or not. Ending the senior exemption and making the rental unit rate, say 25% of the SF rate, is something that I would demand of the District if they want a future affirmative vote from me. The tax code is not in play in order to accomplish this.
Elaine, you nailed it in the post above. There are two other related problems as I see it: lack of tax and spend transparency, and too few that share the pain and the goals for relieving the pain.
On the first problem, we need a completely revamped and simplified taxation scheme at all levels of government. We also need a consistent and simplified disclosure for what money is being spent for each of a discrete list of services. Lastly, we need all citizens to be paying taxes so they feel the pain.
To share the pain, no group should be excluded from paying taxes that others must pay.
To develop shared goals promoting fiscal prudence, all of us should be able to easily connect the dots for where the taxes we pay are spent.
Lastly, we should be honest in admitting that the existence of public employee unions corrupts the process of governance by the people and for the people, and is largely responsible for the mess we are in today. We need a constitutional amendment outlawing the formation of public employee unions. They are unnecessary and destructive.
We are stuck in a dialog of what do to about the present, without looking to solve the root causes. This is what I expected with Brown elected.
[i]”… making the rental unit rate, say 25% of the SF rate, is something that I would demand …”[/i]
The strangest thing to me is how duplexes are treated. Where a modes SFH owes $200 under Measure A, a twin house owes just $40. A friend of mine owns a duplex in the neighborhood between Grande Ave and Northstar Park. He and his wife live in one of the 3/2 units; he has a family renting the 3/2 unit which is attached. Together the duplex has 6 bedrooms, 4 baths, spacious parking and a large yard. Yet for all that he owes just $40, when much smaller, cheaper SFH’s have to pay 5 times as much? It doesn’t make sense.
hpierce: [i]The District has full control of whether to exempt seniors. The District has full control over whether the 10-1 differential in living unit ‘prices’ is appropriate or not. Ending the senior exemption and making the rental unit rate, say 25% of the SF rate, is something that I would demand of the District if they want a future affirmative vote from me. The tax code is not in play in order to accomplish this.[/i]
If Measure A passes, the total apartment unit price would be $170 and the SF would be $520. Even if Measure A charged nothing to multi-unit dwellings, the apartment price wouldn’t come under 25%, but you might be even more outraged that apartments weren’t charged anything under that situation.
No matter how the tax is were structured, someone would complain that it’s unfair. But I think inaction is far worse than proposing something.
Rifkin: I live in one unit of a duplex and am charged the full rate of a SF unit.
WDF1:
Let me quote directly from Measure A ([url]http://www.yoloelections.org/election_central/voter_guide/20041102/AL1285032283/measure a full text a.pdf[/url]):
[i]”By this new parcel tax measure, the District seeks voter approval to initiate a new parcel tax that will impose the parcel tax rates set forth above, which rates include $200 per parcel and [b]$20 per dwelling unit in multifamily dwellings.[/b][/i]
Is that clear enough?
Here is how Measure A defines a multifamily dwelling:
[i]”A “Multi-Dwelling Unit Parcel” is a Parcel of Taxable Real Property that contains more than one dwelling unit, including, without limitation, a duplex.”[/i]
WDF1: the only thing I can figure in your case, if you are telling the truth, is that your duplex is on two parcels, so that you own one side and someone else owns the other side? If that is the case, then your duplex is treated as two distinct single family homes. However, I was told by my friend (years ago) that he pays much less for parcel taxes, and (though we have not discussed Measure A specifically) Measure A is written the same as previous parcel tax measures in that regard.
ERM
This brings us to one of those pesky things about living in a democracy. We have different values and are encouraged to support and promote our own. Every item you mentioned about our local government, the means of trash collection which promotes recycling, street sweeping, maintenance of open spaces, are services which I value and feel contribute to the desirability of our community, and for which I am happy to pay.
JB
We have a rare moment of agreement ; )
I completely agree that there should be complete transparency about where our tax dollars are being spent.
Having said that, I do not think that it is dishonest to disagree with you that “the existence of public employee unions corrupts the process of governance”. While some union leaders may be corrupt, and some politicians may be corrupt, this can equally be said about lobbyists and heads of corporations. I doubt you would agree with me if I were to generalize and state that there should be no private companies and no lobbying because some are “corrupt”.
As for your idea that ” everyone should be taxed” in order to “share the pain”, I fail to see how imposing more pain on those who are truly vulnerable, such as children of those who have been forced from their homes and who are managing to feed their families on two minimum wage jobs and the help of food banks in any way enhances our society. I sincerely doubt that the millionaires and billionaires in our society would be caused any ” pain ” by having to kick in a bit more to help those in real trouble.
Rifkin: I think you are probably right in the latter case (11:14 AM). I have seen parcel maps of our neighborhood, and my half is shown on a separate parcel from my neighbor’s.
[img]http://www.localpropertyindex.com:81/lpi-images/39/19598/lpiimg9799118.jpg[/img]
So, again, WDF1, does it not seem odd to you that my friend who owns his complete duplex in North Davis owes $40 (or $20 + $20) for Measure A while you and your attached next door neighbor must pay $400 (or $200 + $200) for your combined houses? I just don’t understand why a duplex owned by one owner is not treated as two single family homes?
It also strikes me as strange that an 8-unit apartment complex would owe less than a small SFH. Given the limitations of the law, I would think a fairer approach would be to treat all apartment units as 75% of a house. So a complex with 10 units would owe $150 x 10 = $1,500 (as opposed to $20 x 10 = $200). If we did that and landlords really passed on some of this expense to their tenants, their might be a lot more debate over this tax measure. At the very least, I would hope renters would become concerned with a district which lays off good young teachers in order to retain lousy older teachers.
Correction: “… this expense to their tenants, [s]their[/s] [b]there[/b] might be …”
Rifkin: [i]So, again, WDF1, does it not seem odd to you…[/i]
I am curious why the difference. I looked at my parcel tax bill this morning, and it definitely shows the full SF assessments with the other parcel taxes.
I’m not particularly outraged, though, because in this one case at least I have some clue where my money is going, and it’s to something I happen to believe in. I pay other taxes — state & federal income, sales tax, etc. — with much less idea where it’s all going, and with some low-level irritation over that fact.
[i]”I pay other taxes — state & federal income, sales tax, etc. — with much less idea where it’s all going, and with some low-level irritation over that fact.”[/i]
Check out this Washington Post story ([url]http://www.washingtonpost.com/opinions/with-a-taxpayer-receipt-wed-see-what-the-government-is-doing-with-our-money/2011/03/08/ABgSawQ_story.html[/url]): [quote]The federal government should explain exactly where each person’s tax money goes. We need a taxpayer receipt.
A receipt would be easy to create, simple to read and — here’s a word you don’t often associate with the Internal Revenue Service — fun. The document we imagine wouldn’t give taxpayers a way to get their money back. But it would show how much you personally spend each year on government programs such as the FBI, NASA and foreign aid, based on their percentage of the federal budget. By breaking out your contributions, it would make abstract government programs concrete.
Here’s how it should work. After filing your taxes, you would receive an itemized receipt, by e-mail if you file electronically or by regular mail if you send in paper forms. The one-page document would cover major items such as defense, Social Security and interest on the debt. It would also include the address of a Web site that would offer more information on all federal spending, from salaries for members of Congress to Pell grants for higher education to the upkeep of national parks.
The cost of producing this receipt would be a relative bargain. We estimate that the IRS would have to spend about $15 million to mail the receipts to taxpayers. (Two of three households file electronically, so their e-receipts wouldn’t cost much to send.) There would be some costs associated with maintaining the Web site, but that’s a small investment for a very worthy goal: clearing up confusion about the federal budget. [/quote] You might also be interested in this ([url]http://www.thirdway.org/publications/335[/url]). It shows you, based on how much you pay in income tax and FICA taxes, just what you are getting for your money.
If I could reasonably believe that this special tax would actually expire anytime in the future both my wife and I would have voted yes. As it is we all know that if the school board had their way the $520/yr would be made permanent. I fully expect to see another special “emergency” school tax this time next year peddled as a necessary emergency capitol improvement tax to fund replacement or repairs in the DHS MPR room and repairs at Emerson Jr High.
ERM: [i]Where I used to live, we did not have fancy garbage pickup w three different trucks, one for regular trash, one for recylables, one for yard clippings. In my day it was one truck once a week, period.[/i]
I, too, grew up with that last century lifestyle. Do you suggest we think about going back to those simpler times and throw it all into one can and into the landfill?
What I think you might be missing is that in the last century, all of that was trash. In the 21st century, the recyclables and clippings are a resource that can have subsequent value again in the marketplace.
Until recently, I owned and lived in a townhouse. Each building unit was made up of about 10 separate family units. Intuitively one would think this multifamily living, but each one was charged the full fees and taxes as a single family home.
By the way, the senior exemption is not the only exemption the school board could have provided. They could have also provided an exemption for those living on supplemental social security income. They did not.
One might consider multiple trucks to pick up waste as a last century inefficiency. Much of the sorting, recycling, and waste diversion is mandated, but the means of how its done is not. But this is way off topic.
To those of you who favor three separate trash pick-ups w 3 separate trucks – that is 3 times the cost of trash pick-up than is necessary; 3 times the amount of GHG emissions. Yet the money saved by having only one trash pick-up could be used to fill some of those basic potholes people are complaining about. When you require Cadillac services, there is a misguided assumption that the money tree to pay for those services is endless. It is not. THe gov’t is robbing Peter to pay Paul. What the gov’t is doing is creating Cadillac services and convincing taxpayers these services are somehow “essential”, then cannot pay for basic services. The next step if for gov’t to then insist taxes must be raised to pay for basic services or there will be dire consequences. And of course by now the Cadillac services have become part of the basic services. In this way gov’t gets everything paid for by the taxpayers – both essential and Cadillac services. But guess what – the money tree does not exist and never did. THe money to pay for gov’t services comes from taxpayers’ collective pockets, and that collective pocket is tapped out. There is no more money to pay for either the Cadillac services or the basic services. How’s that system workin’ for ya’ now?
Sorry for sounding a bit “snarky”, but this sort of “gaming the system” by gov’t has got to stop. Funding frills so basics go unattended, then impose tax increases to pay for basics that include the frills, is nothing but a scam run by the gov’t to fund all sorts of unnecessary services. CA has become completely clueless about its excesses and will go bankrupt if it doesn’t wise up…
ERM ”To those of you who favor three separate trash pick-ups w 3 separate trucks – that is 3 times the cost of trash pick-up than is necessary; 3 times the amount of GHG emissions.”
I highly respect your contributions here, but I think you’re way off base on this particular topic.
As wdf1 said, much of this waste is now seen as having value and I find it a bit ironic that you cite an environmental effect (i.e. a perceived increase in GHG) when the very cause for this situation is an attempt to prevent GHG through recycling and composting.
I think there’s one more flaw in your approach worth noting; simply because there are 3 different trucks in the current scheme doesn’t mean you’d have 2 fewer trucks if everything were lumped together. The amount of material to be dealt with wouldn’t change, so it’s conceivable that while you might require only 1 /type/ of truck you would need just as many trucks (or 1/3 of the vehicles taking two more trips a piece) to gather the same amount of material.
I realize I’m picking a specific nit here, but I think it’s illustrative of the types of arguments that are all too prevalent; opinion vs. opinion is simply an argument without recourse. In this instance the point attempting to be made is that recycling is a “Cadillac” service, while many others would contend that attempting to preserve our planet for future generations is a basic responsibility. Furthermore, the arguments being presented to get rid of something are often nearly identical to the reasons they were implemented in the first place.
I know this is a bit off topic, but I thought it was worth commenting on, apologies if others disagree.
AeroDeo
A bit off topic but entirely appropriate in my opinion.
What virtually all of the discussions about taxes boil down to is values. It is clear that not all of us value the same services equally and not all of us approve of various actions taken by our elected reps. One person’s Cadillac service is another’s basic service ( and no I don’t believe that I have been brainwashed). I happen to have lived in many different communities and value the services that we have in Davis as compared with those of other communities. And that applies equally to our schools which remain relatively strong because of the willingness of the community to support them.
Like I said, gov’t has convinced the public that Cadillac services are necessary and basic… and this is why CA is in so much financial trouble… 3 garbage trucks instead of 1, stadiums instead of MPRs, wine institutes instead of… you catch my drift…
Your “drift” in this case seems to be nothing more than a repitition that your values are the “correct ones”. You are clearly entitled to your opinion, but it would be nice if you were not quite so demeaning of the opinions and values of others.
In case any Vanguard readers are interested in the subject, Judge David Rosenberg has written an op-ed ([url]http://www.davisenterprise.com/opinion/new-yolo-courthouse-will-benefit-residents/[/url]) in The Davis Enterprise attacking my column of April 13 ([url]http://www.davisenterprise.com/opinion/courtroom-construction-shouldnt-be-a-priority/[/url]), in which I questioned the wisdom of California spending $5 billion on 41 courthouse projects at this time, when our state is still $15 billion in the red.
Shocked at his op-ed, which I found to be poorly written and full of deceptive claims and some downright untruths, I penned a point-by-point response to the judge, which you can read here ([url]http://lexicondaily.blogspot.com/2011/04/judge-rosenberg-claims-my-column-was.html[/url]).
The statement in the above published article:
“The parcel tax, thus, is a horribly regressive tax, but there is no alternative for the school district”.
Is false…
Because, the School Board had the option not to place Measure A on the ballot to start with and call a special election that is a ridiculous waste of taxpayers money and the voters time.
And with the current two (2) special taxes to support instructional programs of Measures Q and W which assess $200. and $120. per year on single family unit non-exempt parcel tax owners it makes no sense for the School Board to place this additional parcel tax proposal on the ballot.
Also, in doing so they could have included the Social Security Disability Income (SSDI) parcel owners as an option in the language of Measure A for an additional exemption but chose not to according to California Government Code Section 50079.
And even a lower proposed rate than the maximum $200. rate that is proposed.
Yes, the Davis School Board was not left without options but had many in this case and chose not to pursue them and falsely blaming the law as not providing them with these options is just an excuse for poor decision making.
For more information, there is a “No on Measure A” website that can be viewed at the following website address (see below):
http://www.yvm.net/vme/no-on-a
Mr. Randall: The district had two options in this case. They could have cut $6 million from their budget or they could have put a parcel tax on the ballot. I think few would fault them for choosing the latter even if ultimately you end up voting against it.