How to Read Your Property Tax Bill

property taxThanks to Proposition 13, property tax bills are less scary in California than they are in a lot of other states. Homeowners in Illinois and New Jersey, just to cite two examples, have been known to let out a blood-curdling scream when they open the tax collector’s envelope that would be right at home on the soundtrack of a Jamie Lee Curtis movie.

Proposition 13 limits increases in a property’s assessed value to 2 percent per year and provides property owners with a pretty good idea of what their tax bill will be before they open the envelope.

Still, there can be some surprises. Taxpayers should understand the various charges and check the tax bill to make sure they’re not being assessed for more than they’re legally obligated to pay. It’s a good idea to compare each year’s tax bill to the previous year’s bill.

For most California counties, the property tax bill will show three categories of charges. They are the General Tax Levy, Voted Indebtedness and Direct Assessments.

The General Tax Levy is what most people think of when talking about property taxes. It is based on the assessed value of land, improvements and fixtures. This charge usually makes up the largest part of the tax bill and it is the amount that is limited by Proposition 13.

The annual increase in the General Levy of Assessment should be no more than 2 percent, unless there have been improvements to the property, like adding a room to the house. However, if a property received a “reduction in value” reassessment under Proposition 8, the taxable value may go up more than 2 percent to reflect the recovery in the market value. But in no case will the taxable value be more than the initial Prop. 13 base year plus 2 percent annually from the date of purchase.

If homes like yours are selling for less than the valuation on your current bill, contact your county assessor and ask for an adjustment to reflect the actual market value.

The second category of charges is Voted Indebtedness. …

Click here to read the full article from the Los Angeles Daily News

California Initiative to Erode Proposition 13 Qualifies for 2020 Ballot

Howard-JarvisAdvocates qualified a 2020 ballot measure to erode California’s Proposition 13 protections against unlimited property tax increases by splitting the tax roll to spike business taxes by up to $10.5 billion.

A coalition representing public-employee unions, “social justice” advocates, and public education collected more than the 585,407 legal signatures required to a qualify a state constitutional amendment for the November 3, 2020 ballot titled: “Requires Certain Commercial And Industrial Real ‘Property To Be Taxed Based On Fair-Market Value. Dedicates Portion Of Any Increased Revenue To Education And Local Services.’”

With rampant inflation forcing older homeowners and small businesses out of their properties, a California voter grass-roots coalition rebelled against Democrat Gov. Jerry Brown in 1978 to qualify and pass with 62 percent support an amendment to Article XIII A of the state constitution stating the “maximum amount of any ad valorem tax on real property shall not exceed one percent of the full cash value of such property.”

The Howard Jarvis Taxpayer Association (HTJA) has fought off numerous efforts by progressives and public employee unions to repeal Prop. 13 and its 57 percent annual property tax savings over the last 40 years. With about $49 billion in 2018 tax savings, a Public Policy Institute of California poll in April demonstrated that voters still favoring Prop 13 by a lopsided 57 percent to 23 percent margin. Democrat politicians often refer to Prop 13 as the third rail of California politics: “Touch it and die.”

But the pro-tax coalition cleverly structured its 2020 initiative as a property tax “split roll.”  The initiative promises to maintain Prop 13 protections for homeowners, while spiking annual business property taxes by $6.5 to $10.5 billion. According to an April 2018 poll by PPIC, likely voter support for “split roll” flips to 61 percent, versus 33.0 percent opposition.

But the HJTA told Breitbart that the “bait-and-switch” tactics will fail when voters figure out that the initiative’s sponsors are engaged in a two-step process to fracture opposition and dump all Prop 13 protections in the end. Homeowners may have voting power, but they need apartment owner and small business financial donations to compete against huge union war chests funded by dues.

HJTA added that the PPIC’s mid-September polling found its “Yes on Prop 6” campaign to repeal the $5.5 billion a year gas tax on the November ballot was losing by 52 percent to 39 percent. But after HJTA’s and partner Reform California’s mail and radio messages were launched, the mid-October Survey USA poll and the San Diego Union-Tribune poll both showed “Yes on Prop 6” with a crushing 58 to 29 percent lead among likely voters.

This article was originally published by Breitbart.com/California

Government Boondoggles Threaten CA Property Owners and Taxpayers

High Speed Rail FresnoOne would hope that with the profound foolishness associated with California’s infamous High Speed Rail (HSR) project that our elected leadership would have learned a thing or two.

But this is California. Because we do things bigger and better than anyone else, it’s apparent that one massive boondoggle isn’t enough — we need two.

Let’s recap what we’ll call Boondoggle, Senior.

The complete dysfunction of HSR is no longer in dispute. Missed deadlines for the business plans, lack of transparency, massive cost overruns, engineering hurdles that make the project virtually impossible to complete and a lack of funding are tops on the list. Not only is HSR no longer viable, but the biggest irony is the project was justified on grounds that it would reduce greenhouse gas emissions. Even there it fails, as the independent Legislative Analyst has concluded that the project will be a net GHG producer for the foreseeable future.

HSR is now an international joke. Many who originally supported the High Speed Rail project have changed their opinions, including a former Chairman of the HSR Authority.

Boondoggle, Junior, is the planned construction of the Twin Tunnels project through the Sacramento River Delta, also known as WaterFix. While there is no doubt that California needs additional water infrastructure — and the dams and canals we have now are in need of serious maintenance – Governor Brown’s Twin Tunnel project suffers from the same major flaw as High Speed Rail — an abject lack of planning and no vision for how the project will be funded.

Like the High Speed Rail project, the financing for the Twin Tunnels is illusory. Many of the potential major wholesale customers of water from the Twin Tunnels are highly skeptical of its viability and balk at paying for it. The one exception is the Metropolitan Water District in the greater L.A. area, which has now said it will pay for the full project. Of course, that means its customers will pay.

Lack of transparency is another quality the Twin Tunnels project shares with HSR. Earlier this week, the Joint Legislative Budget Committee held a hearing that opened the way for an extension of the long-term contracts for the State Water Project for another 50 years. (The hearing was supposed to be conducted in the waning days of the Legislative session, but because the topic is so controversial, it was delayed until after everyone left town.) …

Click here to read the full article from the Pasadena Star News

Battles Fought to Stop Tax Hikes in CA Legislature

CapitolWhile on the campaign trail prior to the 1988 election, Republican presidential candidate George H.W. Bush uttered the now infamous words, “read my lips, no new taxes.” Of course, this was a pledge he broke, which likely cost him reelection.

The mission of the Howard Jarvis Taxpayers Association is to protect Proposition 13 and to advance taxpayers’ rights, including the right to limited taxation, the right to vote on tax increases and the right of economical, equitable and efficient use of taxpayer dollars.

Unfortunately, this value set is shared by too few politicians in Sacramento.

Because of that, taxpayers rarely are able to obtain meaningful reform in the state Capitol. California’s reputation for high taxes and burdensome regulations is well deserved and taxpayers are usually able to obtain relief only through the powers of direct democracy including initiative, referendum and recall.

While many wish this wasn’t the case, the stark reality is that legislators have voted for eight taxes (six of which became law) since 2012.

In nearly all instances it was Republicans (usually opposed to higher taxes) who joined with tax-and-spend Democrats to provide the final vote for tax increases ranging from car registrations, to gas taxes, to lumber and battery assessments and mattresses.

Thankfully though, no taxes were approved in 2018.

Don’t misunderstand, the tax-and-spend lobby wasn’t taking the year off just because of the upcoming November election. If anything, they were eager to follow up on their three victories last year, which included the infamous gas tax and a tax on recorded documents. Governor Brown made it clear in 2016 that he desired a permanent source of revenue to fund transportation, affordable housing, and clean water programs. He got the first two last year so only the water tax remained.

The fight over the water tax was very contentious. First, no one doubted the importance of having access to clean water, particularly in the Central Valley where decades of neglect and mismanagement of water systems created the problem in the first place. But imposing a dollar-a-month tax on all residential water users in the state to address a local problem made no sense. The cost to fix the problem was estimated to be $120 million of one-time money, which reflects a tiny percentage of California’s General Fund budget. Thankfully, Senate Bill 623 failed before the Legislature’s summer recess in July and taxpayers and their allies, mostly California’s local water agencies, breathed a sigh of relief. …

Click here to read the full article from the Los Angeles Daily News

Opponents of Repealing the Gas Tax Are Getting Desperate

gas prices 2There’s an old saying in business: Build a better a mousetrap, and the world will beat a path to your door.

But not everyone builds their success on creating better products or providing better services. There are some that specialize in manipulating the laws and the government as a strategy for increasing profits.

This has sometimes been called “rent seeking,” in the sense that it might apply to a storybook troll under a bridge, collecting “rent” as if he owned the right of way.

There are trolls under the bridges in California this year, and next to the highways. They are the rent seekers who oppose Proposition 6, the grassroots effort to repeal the massive gas and car tax increases signed into law last year. They are engaging in some of the most questionable campaign tactics ever seen in California. These Prop. 6 opponents are making millions of dollars from the massive infusion of taxpayer cash paid by hardworking Californians who need their cars in their daily lives.

First, let’s cover the basics: Proposition 6 does not repeal the entire gas tax — only that portion that pushed us up to just about the highest in the United States. If Proposition 6 passes, California will still have the 5th highest gas tax in the nation. Opponents of Prop. 6 would have voters believe that this level of taxation can’t even keep our existing roads paved, let alone build new highways.

Second, waste, fraud and abuse in California transportation spending is legendary. The nonpartisan Legislative Analyst’s Office says needless overstaffing at Caltrans is costing taxpayers billions.  For what California is spending on the nation’s biggest boondoggle, high-speed rail, we could easily pave Interstate 5 from San Ysidro to the Oregon border.

Third, if transportation is so important, why can’t we spend some of the state’s $9 billion-dollar surplus for one-time expenditures?  Gov. Brown’s father did that when he was governor.

Bottom line is that this is not about transportation or the need to fix our roads. No one disputes that our roads are in terrible shape. But credible plans to address this critical need without raising taxes can’t even get a hearing in the legislature. Why?

The reason is simple. This is about transferring money — and lots of it — from hardworking California taxpayers to special interests. …

To read the entire column from the Press-Enterprise, please click here.

Let’s Educate the Voters About Proposition 13

VotedThis week, progressive interest groups announced they had sufficient signatures to qualify an initiative for the 2020 ballot that is a direct attack on Proposition 13. Specifically, this so-called “split roll” initiative would raise property taxes on the owners of business properties to the tune of $11 billion every year, according to the backers. Because many small business owners rent their property via “triple net” leases, they too would be subject to radical increases in the cost of doing business.

Although there is a statewide election this November, the “split roll” measure will not appear on the ballot until 2020 because the proponents, either intentionally or not, did not submit their signatures in time for the 2018 ballot. They say they anticipate a better voter turnout in two years, which in itself may be wishful thinking. Ben Grieff, a community organizer with the ultra-progressive group Evolve, also said that the later election would be necessary to lay the groundwork for “a long two-year campaign” and that, “we need all of that to educate people.”

Well, educating people about Prop. 13 cuts both ways. And if past campaigns and polling are any indication, the more Californians learn about Prop. 13, the more they like it.

So let’s start today’s lesson with an overview of a class we’ll call “Why Prop. 13 is Good for California.” Here are the benefits of it in a nutshell.

Prop. 13 limits the tax rate on all real estate in California to 1 percent. Increases in the taxable value of property — often referred to as the “assessed value” — are limited to 2 percent per year. This prevents “sticker shock” for property owners when opening their tax bills compared to the previous year’s bill. Property is reassessed to full market value when it is sold. This system of taxing property benefits homeowners, because Prop. 13 makes property taxes predictable and stable so homeowners can budget for taxes and remain in their homes.

Renters benefit because Prop. 13 makes property taxes predictable and stable for owners of residential rental property, and this helps to reduce upward pressure on rents. If one believes that California’s current housing crisis is bad now, imagine how high rents would be if the owners of the property were forced to pass along their higher tax bills to their tenants. In truth, Prop. 13 increases the likelihood that renters, too, will be able to experience the American dream of homeownership.

Business owners, especially small business owners, benefit because Prop. 13 makes property taxes predictable for businesses, and it helps owners budget and invest in growing their businesses. This helps create jobs and improves the economy. California has ranked dead last among all 50 states in business climate by CEO magazine every year for more than a decade. Prop. 13 is one of the only benefits of doing business in California. …

Click here to read the full article from the Daily Breeze

California’s Property Tax Postponement program aids low-income seniors

property taxFor Californians who are struggling to pay property tax bills that are rising ever higher due to the increasing number of local bonds and parcel taxes, help may be available.

Property taxes are held in check by Proposition 13, passed by voters in 1978. It limited the annual increase in the assessed value of a property and cut the tax rate to 1 percent statewide. Prop. 13 has helped millions of Californians keep their homes by keeping property taxes predictable and affordable.

But keeping property taxes in check doesn’t always keep property tax bills in check. That’s because extra charges for voter-approved debt or special taxes can be added to property tax bills, and those can really add up. This can become a terrible burden for homeowners who live on fixed incomes, and may even force some to sell their homes because they can’t afford to pay the taxes.

Fortunately, the state of California has restarted the Property Tax Postponement program, allowing homeowners who are at least 62 years old, are blind or have a disability to defer the current-year property taxes on their principal residence if they meet certain criteria.

Before the Legislature ended the Property Tax Postponement program in 2009 amid budget cuts, nearly 6,000 homeowners throughout the state were able to benefit from it. Many had been in the program for 20 years or more and the majority were over 70 years old. In the last year of the program before it was cut, 208 people who claimed its assistance were over 90 years old.

In 2014, legislation was passed to restore the program, and it started up again in the fall of 2016.

To qualify, applicants must have 40 percent equity in their home and an annual household income of $35,500 or less. Other requirements also apply. For example, homeowners who have taken out a reverse mortgage are not eligible.

Homeowners who are accepted into the program may defer their current-year property taxes. It’s actually a loan from the state, with an interest rate of 7 percent per year. The state places a lien on the property until the loan is repaid, but repayment is not due until the homeowner moves or sells the property, transfers the title, refinances, defaults on a senior lien, obtains a reverse mortgage or passes away. …

Click here to read the full article from the Orange County Register

Withdrawal of the Taxpayer Protection Act could haunt the American Beverage Association

TaxesBy now, political observers have heard how a series of negotiations in Sacramento resulted in three initiatives slated for the November ballot being withdrawn by their respective proponents. The blame (or credit, depending on your perspective) for these deals has been attributed to a 2014 bill authored by then-Senate Leader Darrell Steinberg, D-Sacramento, which allows proponents to withdraw an initiative even after it has qualified for the ballot. It was believed that this reform would result in more compromises being hammered out with the Legislature on contentious issues.

One of the measures withdrawn last week was the Taxpayer Protection Act, which would have strengthened a number of existing constitutional provisions including the two-thirds vote for local taxes. While a broad coalition of business and taxpayer groups backed the measure, and even provided significant input into its drafting, the lion’s share of financial support came from the American Beverage Association.

Faced with massive opposition from local governments and public-sector labor organizations, ABA decided to strike a deal with the Legislature to prohibit any future local soda tax increases between now and 2030 in exchange for removing the Taxpayer Protection Act from the ballot. The decision may also have been based, at least in part, on the perception that other potential financial backers for the campaign would be focused on other initiatives on the November ballot.

Nonetheless, ABA’s decision to withdraw the measure in exchange for limited protection for a specific industry blindsided many interests in the Capitol, including taxpayer organizations which were excited for an opportunity to campaign for strong taxpayer protections in an absurdly high-tax state.

Whether the Taxpayer Protection Act would have passed will be the subject of speculation for years. But it’s now a moot point. What isn’t moot, however, is whether the deal itself, and the similar negotiated agreements on measures addressing issues related to lead paint and consumer privacy, are a reflection of good government or whether they lead to “extortion light.”

Interestingly, political commentators have viewed these negotiated withdrawals differently. Some see them as all that is wrong with Sacramento while others see them as forcing the legislature to do its job. Most fall in the first category. Joel Fox, who puts out the Fox and Hounds blog, wrote a piece entitled “Weaponizing the Initiative Process.” Long time Sacramento Bee columnist Dan Walters, who now writes for CalMatters, calls what happened “genteel extortion.”

On the other hand, veteran Los Angeles Times columnist George Skelton liked the fact that three potentially confusing measures have been taken off the ballot. He also observes that “unlike … initiatives, bills can later be easily tweaked by the Legislature to fix flaws.” But Skelton’s observation reveals another downside to these deals: Will the parties keep their word?

The decision by ABA to withdraw the Taxpayer Protection Act resulted in the enactment of legislation that they presumably believed would protect their interest for more than a decade. But almost immediately, interest groups, including health organizations that have targeted “sugary drinks” for years, filed a new initiative measure specifically targeting that industry. And unlike the Taxpayer Protection Act, which had broad support from an array of business and taxpayer groups, a measure seeking higher taxes just on soda might leave ABA alone in the opposition camp. …

Click here to read the full article from the Long Beach Press-Telegram

California’s Budget Process Should Worry Every Taxpayer

California Gov. Jerry Brown points to a chart showing the growth of the state's Rainy Day fund as as he discusses his proposed 2018-19 state budget at a news conference Wednesday, Jan. 10, 2018, in Sacramento, Calif. Brown proposed a $131.7 billion state spending plan, dedicating $5 billion toward the fund. (AP Photo/Rich Pedroncelli)

Let’s face it, when it comes to the state budget of California, most citizens suffer from MEGO (My Eyes Glaze Over).  Because even public finance experts are confused by the thousands of pages of budget documents, it’s no wonder that citizen taxpayers don’t stand a chance. Besides, normal people are too busy working hard to pay for all the spending increases reflected in the budget.

Nonetheless, passage of the state budget remains one of the most important functions of the Legislature because it reflects the state’s spending priorities for years in the future.  Here are some key takeaways that should concern every California taxpayer.

First, government spending is out of control. While projected revenues are up eight percent – a good thing – from a year ago, expenditures continue to accelerate at a faster clip, up by nearly eleven percent to a record $138 billion budget. When other state funds, including special funds, are added to the total, nearly $200 billion in state funds will be spent in this budget. Legislators will argue that some of these expenditures are going to bolster a rainy day fund to protect against an economic downturn. While this fund is also at a record $14 billion, this will hardly protect state programs even in the event of even a moderate recession.  Second, we doubt that the spending priorities of politicians reflect what taxpayers think are important.  For example, this year’s budget includes a billion-dollar plan to completely remodel the State Capitol, while the state continues to lose ground on nearly a trillion dollars of unfunded pension obligations.

Finally, as in prior years, the 2018-19 budget is a vehicle for numerous abuses. It is now common to enact politically motivated legislation as so-called budget “trailer bills” as a means to avoid any meaningful analysis and public hearings.  This column previously alerted readers to one such sneak attack, a precedent-setting tax on water that thankfully was beaten back – at least for now.  But two other proposed bills represent the worst of Sacramento special-interest politics.

Two years ago, the Howard Jarvis Taxpayers Association sponsored Assembly Bill 195 (Obernolte), a bill that increased transparency for local bonds and special taxes by requiring disclosure of the rate, duration and amount of revenue to be raised. AB 195 mandates that these important facts be included in the actual ballot label, typically the last thing voters read before deciding.

Now, education lobbyists and building trades groups are attempting to delay the implementation of AB 195 for local bonds by two years, to keep this important information from being presented to voters. In other words, our legislators are using a corrupt, non-transparent process to deprive local voters of transparency regarding the cost of bonds at the local level.  This is a double insult to taxpayers. …

Click here to read the full article from the San Bernardino Sun

The Outrageous Tactics Used to Keep the California Gas Tax

Gas PricesA few weeks ago this column addressed the issue of polling and how it can be manipulated and, even when it is not manipulated, how wrong it can be.  Still, candidates, consultants and the media do a lot of polling to test the viability of whatever it is they support or oppose.

Sen. Josh Newman’s recall election was a bitter fight. While polling suggested he was in trouble, those supporting the recall were well aware that polls can be wrong. But even recall proponents were surprised that the recall would prevail by a 59-41 percent margin. That wasn’t just a loss for Newman. It was a trouncing.

This past week, in his political swan song, Newman vented against the recall effort on the floor of Senate.  Incredibly, Newman stated, “I can’t imagine wanting to win so badly that I would ever do, in the pursuit of partisan advantage, what has been done here.”  In light of how Democrats skewed the political process during the recall effort, Newman’s complaint is laughable. Let’s review.

Not once, but twice, Democrats jammed through new laws changing the recall process specifically for the purpose of throwing Newman a political lifeline.  These were enacted as so-called “trailer bills,” last-minute, supposedly budget-related bills that are passed without any public hearings.  These were designed to delay what otherwise would have been a special election for the recall last November or December, a ploy that succeeded in delaying the issue to June.  Because the purpose of the 100-year-old right to recall is to get a rapid resolution of whether a politician should continue in office, the claim that the new laws were “improving” the process was ridiculous.

Then, adding insult to injury, the ostensibly neutral Fair Political Practices Commission adopted a new rule allowing Newman unlimited campaign contributions from his fellow Democratic senators.  This despite the fact that they denied this right to a Republican senator just a few short years ago.

For Newman to upbraid Republicans on the floor of the California Senate for failing to defend him suggests that he has totally forgotten the Banana Republic tactics that were deployed to save his political career. It also demonstrates how disconnected he was from his constituents, who really were angry over his vote to ensure that California had the highest gas and car taxes in the nation.  His political tone deafness was further revealed by more anti-taxpayer votes for single-payer healthcare, a recording tax to fund housing and a vote for cap-and-trade. …

Click here to read the full article from Pasadena Star News