Proposition 13 Assessments Unfair - Letter to the Editor

Proposition 13 Assessments Unfair

The recent letter by W. Roach (January 4; Assessments based on market values unjust, unnecessary) describes only a very small part of California’s tax picture. He points to an all rosy scenario, where property tax revenues are capped, without any problems in government-delivered services. As the saying goes, however, if it sounds too good to be true, then it probably is.

A recent article regarding California in “The Economist” magazine (May 16, 2002) stated that there were “…structural problems with the state’s finances” and pointed to the structure to blame as Proposition 13. It also pointed out that the stock of schools, roads and bridges, built primarily in the 1960s, is “crumbling”, due to infrastructure spending in the bottom tenth of states, and school spending in the bottom third of states. The article summarizes current feelings by saying that “…evidence suggests that the number of people who gain from lower taxes on their homes is getting less important than the rising number of those who fume about their children going to bad schools.”

And bad schools they are: the most recent exams (1998) for reading skills conducted for the National Center for Education Statistics showed that 52% of California grade 4 students were “below basic” skills, placing them in 47th place of 50 states. This, incidentally, tied them with perennially low-income states like Louisiana and Mississippi. Grade 8 students placed not much better in the state’s ranking.

Proposition 13 is unfair in other ways too: for instance, the Public Policy Institute of California calculated that, for the same home, a recent buyer would have to pay nearly four times the property tax compared to someone who’d owned that house since 1975.

Other negative effects have also included the explosion of development cost charges, a cost faced by all buyers of new housing. Also, since business property assessments are not capped, they are paying a greater and greater share of property tax revenues.

Furthermore, the letter-writer’s contention that market value assessments are outdated isn’t supported by facts. More and more countries around the world are modernizing their property tax assessment systems by moving to transparent market value assessments.

In the end, Proposition 13 assessments don’t make sense here in B.C unless you can answer “yes” to the following questions:

· Is it fair that a recent buyer of a home pay four times the tax of someone who’d owned the same home since 1975?
· Is it reasonable to expect businesses to pay a greater and greater share of property taxes?
· Does it seem right that buyers of new homes subsidize existing owners by the inclusion of punitive development cost charges in their housing cost?
· Will B.C.’s long-term economic prospects improve by allowing our infrastructure to crumble?
· Does it make sense to drain our schools of resources so that we end up with a low-quality system like California’s?


... another random musing