property tax prop 13 type reform in Idaho? (Sandpoint: renters, homes)
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When I am a Idaho resident with local voting privileges and if given the opportunity to vote for a Prop 13 type tax structure in Idaho, I would vote a big NO!
My current California property taxes are a few hundred dollars over $4,000 per year. According to MLS listings on houses I'm considering purchasing on the Rathdrum Prairie, the average property tax is in the neighborhood of $1,000 to $1,200. This is for a house of similar vintage and a listing/selling price about half of what my current CA house would list/sell for. This is to say that Idaho property taxes are not unreasonable at this time.
The primary reason that I would vote no is because of the unintended consequence of the CA Prop 13 law. Pre-Prop 13, California used to have the absolute best schools in the nation, bar none. Now, several decades after Prop 13, they are among the worst. There are other factors in play, but the primary reason for the decline of CA schools has been traced back to the drop in property tax revenue collected by the state.
I don't think Idaho should look at California in ANY way about tax structure. Idaho and California are apples-and-oranges. A lot of states (including California) don't have a revenue problem, they have a spending problem. So IMO we in Idaho may look at other small government/low income/rural states and look at what tax revenue policies are (and are not) working for them.
It's not just CA, many states have adopted the same idea, but in some states, it only affects existing tax structures. If the populace votes for a school bond issue or increase, it is not included in the structure. So taxes can go up, but only on a vote of the people. I find that idea great...VOTE OF THE PEOPLE! Of course liberals hate that idea.
And was Prop 13 really the primary cause of the failure of CA schools, or was it the fact that on estimate it takes 7.7 billion a year to educate children and parents (ESL) in the CA schools? Or, was it both? Property taxes frozen, but the influx of illegals caused the problem. (Rhetorical question, since I already know the standard liberal response.)
It's not just CA, many states have adopted the same idea, but in some states, it only affects existing tax structures. If the populace votes for a school bond issue or increase, it is not included in the structure. So taxes can go up, but only on a vote of the people. I find that idea great...VOTE OF THE PEOPLE! Of course liberals hate that idea.
And was Prop 13 really the primary cause of the failure of CA schools, or was it the fact that on estimate it takes 7.7 billion a year to educate children and parents (ESL) in the CA schools? Or, was it both? Property taxes frozen, but the influx of illegals caused the problem. (Rhetorical question, since I already know the standard liberal response.)
This is true. When i Joined the Navy in 1982, and left California, after Prop 13 was passed. It was down hill from that point on to today. Have not returned other than to visit my family members who still live there.
Last edited by ScottStielow; 05-31-2015 at 11:59 PM..
There are other factors in play, but the primary reason for the decline of CA schools has been traced back to the drop in property tax revenue collected by the state.
This is a myth. See below for the real history of what happened to property tax revenue collections post-Prop 13. They are up well above both the rate of inflation and the population growth.
Quote:
Originally Posted by Cnynrat
Some California tax history:
In 1980-81, 2 years after Prop 13 was passed, there was a total of $6.36B in property taxes collected in the state.
In 2006-07 they collected $43.16B in property taxes, so property tax collections were up 579% in that time.
In that same time the population grew by 58%, and inflation increased prices by 133%.
So while most anyone who has lived in CA for a long period of time will tell you that Prop 13 has been a very good thing, it hasn't stopped the growth of property tax collections, or even held them to something close to the rate of population growth or the rate of inflation.
Dave
CA does lag the nation in spending per student, but the problem isn't a lack of property tax collections. Rather, the problem is that many other budget items have crowded out spending on education. So it's more of a spending priority problem than a tax receipts problem.
Although Idaho does not yet have a CA Prop 13 approach to "holding down" taxes, Idaho did recently pass legislation that increases the Homeowners Property Tax Exemption from $50,000 to $75,000.
Idaho also has an additional exemption for elderly homeowners, IIRC it kicks in at 65.
Having said that, I do have a problem with prop 13. It results in unequal treatment under the law, and hurts those that want to switch homes, for whatever reason. California's (and more and more, Idaho's) problem isn't that they are pricing the elderly out of their homes with taxes, they are pricing EVERYONE out of their own homes. Governments don't have a revenue problem, they have a spending problem. CA more than most.
The primary reason that I would vote no is because of the unintended consequence of the CA Prop 13 law. Pre-Prop 13, California used to have the absolute best schools in the nation, bar none. Now, several decades after Prop 13, they are among the worst. There are other factors in play, but the primary reason for the decline of CA schools has been traced back to the drop in property tax revenue collected by the state.
Idaho also has an additional exemption for elderly homeowners, IIRC it kicks in at 65.
Having said that, I do have a problem with prop 13. It results in unequal treatment under the law, and hurts those that want to switch homes, for whatever reason. California's (and more and more, Idaho's) problem isn't that they are pricing the elderly out of their homes with taxes, they are pricing EVERYONE out of their own homes. Governments don't have a revenue problem, they have a spending problem. CA more than most.
Not quite... the United State Supreme Court ruled Prop 13 constitutional under Nordlinger v. Hah... specifically that Prop 13 does not violate equal protection.
As for hurting those that switch homes... again not accurate...
Many co-workers and friends switched homes in between 2009-12 to save taxes... they dumped or walked away from homes that were bought at the peak of the market AFTER buying similar homes... often in the same neighborhoods... switching homes provided lower taxes for similar or nicer homes...
Prop 13 is nothing more than property tax based on value at the time of transfer with 2% cap on annual inflation and voter approval for new taxes/assessments.
Seniors can downsize in the same county retaining Prop 13 and several counties have reciprocal agreements to downsize around the State...
I agree... it should have never come to Prop 13... on the other hand... what choice did taxpayers have when the State failed to act... simply indexing the Home Owner exemption would have stopped Prop 13 in it's tacks... even this was beyond the ability of Sacramento...
Legislatures went on record publically stating they would leave it to the voters to decide and only when it looked like Prop 13 was unstoppable, did Sacramento offer a competing measure...
Idaho is a beautiful State and has attracted several of my California friends... predictable property taxes is one thing government can and should do...
I don't think many people are still covered by original prop. 13. At the time it passed, you were locked in to lowered rates on the house you lived in. When you sold or moved to another home, you lost it and the people who bought your old house couldn't get it. As far as schools, the teacher's union got so powerful, it can and does dictate state government policy.
As for Idaho, my assessment went up over 10% since last year, that's tough if it continues.
I don't think many people are still covered by original prop. 13. At the time it passed, you were locked in to lowered rates on the house you lived in. When you sold or moved to another home, you lost it and the people who bought your old house couldn't get it. As far as schools, the teacher's union got so powerful, it can and does dictate state government policy.
As for Idaho, my assessment went up over 10% since last year, that's tough if it continues.
Prop 13 applies to each and every property subject to Property Tax without exception... commercial and residential... purchased today or 100 years ago.
The best way to think of it is Prop establishes base year as the value at the time of transfer... most always the sales price.
There are other propositions that allows parent/child transfer or seniors a one time option to take their existing assessment with them.
I just received the Thurston County Washington State Prop Value notice of increase 19% increase over last year... I guess I should count my blessings because one year it increased 80% !!!
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