Proposition 13 blowback: the popularity of lease-backs

[rj1]

Re: Proposition 13 blowback: the popularity of lease-backs

So how does this get fixed for California?

http://www.latimes.com/news/printedi...,5068310.story

[Slimprofits]

Re: Proposition 13 blowback: the popularity of lease-backs

Property tax assessments could plunge across California, worsening fiscal crisis

By Karen de Sá
Mercury News
Posted: 01/08/2009

As of Jan. 1, county assessors begin determining the values of homes, office buildings and shopping malls, with dire forecasts looming. The state Legislative Analyst's Office on Thursday released projections of a decline of more than 4 percent in the fiscal year that began July 1. In a report recently released by the nonprofit California Forward, some economists go even further, predicting a 5 percent decrease in property taxes, followed by at least two more years of negative growth.

The same report, using state Department of Finance figures, predicts California's total property tax revenue will "fall by over 10 percent before finding a bottom."

[..]

Property taxes are counties' largest single source of unrestricted funding for the social safety net; in Santa Clara County, they comprise more than 30 percent of the general fund, or $645 million this year. Property taxes provide critical income for cities as well.

[..]

While some county tax rolls, such as Santa Clara County's, are expected to continue growing this year — albeit at a far slower rate — huge swaths of California are expected to go into the dreaded negative zone.

Los Angeles County Assessor Rick Auerbach said this week that while it's still too early to be certain, some indicators show total property values decreasing by as much as 1 percent. That stands in stark contrast with last year's roll, which showed a nearly 7 percent increase in property values equaling more than $1 trillion.

Los Angeles County holds one-quarter of the total assessed value of California and as such, any decline is a deep blow to the state.

In Sacramento County, assistant assessor Kathy Kelleher said last year's growth of about 2 percent is expected to soon be reversed. "We're expecting to go negative," Kelleher said. "And we haven't been negative for the last 20 years."

[Slimprofits]

Re: Proposition 13 blowback: the popularity of lease-backs

So how does this get fixed for California?

http://www.latimes.com/news/printedi...,5068310.story

Uncle Obama to the rescue is most likely. Maybe the FedGov forces the state to balance the budget and steps up with money to pay for infrastructure projects that were already in motion, than a freeze until the budget is balanced?

The property owners that stick around will bear the brunt of this in terms of bang for the bank on their tax payments going forward. Many tough years ahead for folks on a fixed incomes even if they own homes outright.

Folks that picked up mortgages during the bubble heydey are walking away in droves. We'll have empty neighborhoods. There are unfinished developments all over Santa Rosa in Sonoma and in Sacramento and other parts of the Central Valley. Some parts will look like a deserted wasteland. I'm thinking about getting out before we hit rock bottom. Much easier to do when one didn't buy into the housing bubble.

But there will be another gold rush and more of us that chase the dream. For those that haven't been to California, the weather, the climate the geography will always be enough to attract new explorers.

[don]

Re: Proposition 13 blowback: the popularity of lease-backs

Uncle Obama to the rescue is most likely. Maybe the FedGov forces the state to balance the budget and steps up with money to pay for infrastructure projects that were already in motion, than a freeze until the budget is balanced?

That's where I 'd put my dough. Federal state aid will be backdoored through "infrastructure stimulus" on already, but suspended, state projects, mainly maintenance in nature.

[don]

Re: Proposition 13 blowback: the popularity of lease-backs

How do you foresee the bank bailout in the Infrastructure Stimulus Act of 2009? It could be the key or at least the Big Attempt at a cure for FIRE Influenza.

[c1ue]

Re: Proposition 13 blowback: the popularity of lease-backs

Maybe the FedGov forces the state to balance the budget and steps up with money to pay for infrastructure projects that were already in motion, than a freeze until the budget is balanced?

The property owners that stick around will bear the brunt of this in terms of bang for the bank on their tax payments going forward. Many tough years ahead for folks on a fixed incomes even if they own homes outright.

B,

California and a number of its constituent cities already have balanced budget requirements. As we're seeing firsthand, the way to get around that is by just not passing a budget at all

The federal government can't force passage of a budget. All it can do is provide money - although enough money will buy off the opposing interests so that a budget does go through.

But even one successfully passed budget won't help for the next year's.

This is why I see Proposition 13 coming into the sights; it will be the teachers and other unions themselves who will spearhead that fight this time as it is a survival issue.

My guess as to the most likely outcome is a supplementary tax on top of Proposition 13 - separate but equal - which quickly will overtake Prop. 13 as the largest single property tax expense. It will be billed as a way to 'maintain high quality California schools and public services'.

I'm sure the lawyers are working on that now.