California Taxes: Never High Enough

Same old picture (Fog City Journal graphic)

In November, 2020, California will vote to repeal the section of Proposition 13 that limits increases to business property taxes:

Under Prop. 13, both residential and commercial property is reassessed only when it is sold. Otherwise, assessment increases are capped at 2% a year.

Many homes change hands every few years, so they’ve been repeatedly reassessed since 1978. Large businesses, however, often remain under the same ownership for a long time. Some California businesses are paying property taxes based on assessments that haven’t changed in 40 years.

Stone cited a 25.9-acre parcel of land in Santa Clara that is owned by Intel. The assessed value of the then-empty property before Prop. 13 passed was $2.9 million, he said. Now the land has buildings on it and is assessed at $23.9 million.

If it were to be reassessed today, Stone estimates, it would be valued at $169 million.

Your humble blogger will vote against this measure. (I have no dog in this hunt, i.e., no investments other than common stocks in companies that hold California property.)

California governments have shown no spending restraint in the four decades I've lived here. They are always pleading for more revenue for schools. For example, in 1984 the California lottery was approved by reassuring the voters that it would guarantee funding for education for the foreseeable future. In the intervening years everything but property taxes has been raised.

We are paying sales taxes of 9.25% in San Mateo County.

At 53.5 cents per gallon California has the second-highest State gas tax in the nation.

California has nine individual income tax brackets ranging from 1% to 12.3%, plus an extra "millionaires' tax" of 1% imposed since 2004 to fund mental health services. In 2018 CNN reported that "a critical state audit accused California counties of hoarding the mental health money -- and the state of failing to ensure that the money was being spent."

Whatever the tax and whatever the rate, it's never enough for California politicians.

And about those too-low business property taxes: Property tax rolls in Bay Area rise 6.6% to $1.8 trillion (Chronicle, 7/5/19).

Even without the Proposition 13 repeal, assessments and tax revenues will rise by 6.6% in the Bay Area. As I was saying, it's never enough.