Post by Darth Stateworker on Jul 18, 2012 19:39:52 GMT -5
While I realize everyone wants a property tax cap, and no one wants to pay higher taxes for their homes, I think it behooves us as a state to start taking a look at what happens when you cap property taxes with a hard cap.
I began thinking about this today upon reading another article about a 4th California city declaring bankruptcy. California has had a 2% property tax cap in place since 1978 called Proposition 13. While conservatives are all cheering over the bankruptcies, claiming that it is the result of "failed liberal policies" and blaming the usual suspects - "overpaid" government workers, "ponzi scheme" pensions, etc - the real reason for the fiscal problems can be directly traced to Proposition 13 and the inflexibility of their tax cap not allowing local governments to easily raise revenues when needed.
In the short term, it was great. It meant lower property taxes for everyone in California. However, Proposition 13 is one of the chief reasons why California has such a poorly funded pension trust fund - because while costs were increasing in every area at the rate of inflation or more, revenues were not keeping pace. So where did they cut? One of the main areas was on timely pension contributions, instead choosing to put off payments into the future, when they are far more costly because the money that should have been there did not have time to compound.
The end result of all of this snowballing is what we see today, where a conservative tax policy implemented in a "liberal" state is causing financial chaos. Additionally, I think that chaos was the intended result of the conservatives long term "starve the beast" strategy. The beast has now been starved long enough that they can now point to the problems and blame "liberal policies".
This is the road we are headed down I'm afraid if we let this property tax cap stand.
I began thinking about this today upon reading another article about a 4th California city declaring bankruptcy. California has had a 2% property tax cap in place since 1978 called Proposition 13. While conservatives are all cheering over the bankruptcies, claiming that it is the result of "failed liberal policies" and blaming the usual suspects - "overpaid" government workers, "ponzi scheme" pensions, etc - the real reason for the fiscal problems can be directly traced to Proposition 13 and the inflexibility of their tax cap not allowing local governments to easily raise revenues when needed.
In the short term, it was great. It meant lower property taxes for everyone in California. However, Proposition 13 is one of the chief reasons why California has such a poorly funded pension trust fund - because while costs were increasing in every area at the rate of inflation or more, revenues were not keeping pace. So where did they cut? One of the main areas was on timely pension contributions, instead choosing to put off payments into the future, when they are far more costly because the money that should have been there did not have time to compound.
The end result of all of this snowballing is what we see today, where a conservative tax policy implemented in a "liberal" state is causing financial chaos. Additionally, I think that chaos was the intended result of the conservatives long term "starve the beast" strategy. The beast has now been starved long enough that they can now point to the problems and blame "liberal policies".
This is the road we are headed down I'm afraid if we let this property tax cap stand.
