CA Legislative Analyst: “Property Tax Reductions to Diminish as Housing Market Improves” – uh oh – another boom and bust on the way?

7 May

Thanks Al Petersen for this article from the Legislative Analyst’s Office.

Assessor candidate Diane Brown told us about Proposition 8, which set up a program by which houses that had gone down in value because of the collapse of the housing market could have their base value adjusted down to a  reasonable value for taxation purposes. These homes were to stay in the program until the value of the house recovers, meaning, the market recovers.

Oh my goddess – what she didn’t tell us was, when the market recovers, these houses will be assessed as much as 10 percent or more a year, whatever it takes, until they come back up to the current market value. The state, county, and other entities will get back what they lost, and then some!

I predict another huge round of foreclosures as these people whose houses are already upside down are going to be hit with their new assessments. I predict a lot of them will end up re-assessed for more than they were paying before they enrolled in Prop 8.

Our government has gotten entirely too big. Read this for yourself, it’s got maps and charts and everything. This report tells us, by county, how many people are enrolled in the Prop 8 program, how “upside down” housing is, how much money governments perceive  they’ve “lost” due to this program. It’s sad to me – instead of looking at this like a balloon that never should have been blown up, our local governments are desperately trying to glue the balloon back together and puff it full of air again.

http://lao.ca.gov/reports/2014/finance/property-tax/property-tax-050514.pdf

2 Responses to “CA Legislative Analyst: “Property Tax Reductions to Diminish as Housing Market Improves” – uh oh – another boom and bust on the way?”

  1. alpetersen2014 May 7, 2014 at 12:22 pm #

    The report spells out one of the effects of prop 13. We get the good and the bad with some situations being very punishing. It depends on what part of the inflation curve you buy in. That’s part of the state constitution not local influence. Notice the value line in figure 3 demonstrates prop 13 prevents the increase from going above the prior value with factoring.

    • Juanita Sumner May 7, 2014 at 1:53 pm #

      Thank goodness for Prop 13. What we need now is some kind of mechanism that automatically lowers public salaries and benefits in times of low property values. Like the MOU signed by a Chico City Council about 10 years ago, that specifically linked salaries to “increases in revenue but not decreases,” only, the other way around.

      To think that homeowners are just out there on the open seas, but public workers get “defined benefits,” that’s just outrageous.

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