Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, June 19, 2019

Umm, maybe the reason Calfiornia cities are unable to solve worsening problems has to do with the residential property tax cap

Trash in Skid Row.  LA Times photo by Mel Melcon.

A few weeks ago, LA Times columnist Steve Lopez had some disturbing columns about rampant dumping, rats, and other problems in the city ("There’s a trash and rodent nightmare in downtown L.A., with plenty of blame to go around."

It reminded me of a similar series in the St. Louis Post-Dispatch about systematic problem dumping there, albeit mostly by suburban residents, and how the city has implemented security cameras in persistently problematic areas.

-- "Focused ways to deal with illegal dumping: camera-based enforcement," 2018

Granted this is partly a management and enforcement issue.

Conservative columnist Victor Davis Hanson jumped on the opportunity to criticize "far left" California as a cesspool in an article in the National Review, "California: America's First Third-World State."

California is the world's fifth largest economy. It's hardly a basket case. 

But its ability to deal with its problems are in large part of function of its ability to generate revenue, which for the state, is from income tax, from individuals and corporations, and with the decline of industry and the increased economic costs of climate change, the state is economically stressed.

Dealing with dumping, rats, homelessness, etc. are local issues and primarily issues of funding. Cities and counties rely on property taxes for the bulk of their revenue

-- "The real lesson from Flint Michigan is about municipal finance," 2016
-- "A correction (and update) to a March post on municipal finance: addition of land transfer tax to the list)," 2016
-- "A brief comment on local government finance: Fairfax County, Virginia," 2017
-- "Tax exempt property rolls threaten center city financial solvency: solution--make PILOTs mandatory?," 2017

In California, residential property taxes are capped at rates set in the 1970s, because of the Proposition 13 tax cap passed in 1978. Property tax can be raised up to 2% per year, but all properties are assessed at 1% of their value.

The property tax bill for a typical California residential property ends up being about 1/7 of the property tax paid in a city like Washington, DC.--and in the DC area, DC's residential property taxes are mostly lower than the surrounding jurisdictions, sometimes significantly so.

… a letter to the editor in the Wall Street Journal derided the LA Unified School District for trying to raise the school tax ("A political disaster: How Measure EE, L.A. schools tax hike, failed so badly," Los Angeles Times).

The letter too failed to acknowledge how the state's property tax caps impact the funding of school systems.  And that California is one of the world's most economically successful states.

Even though Proposition 13 has forced many local governments to seriously cut back, because of the overall growth of the state economy, many communities have been able to weather some of the financial restrictions.

But now many of the problems are reaching supra-critical states, and localities lack the financial capacity and flexibility to address them.

But because the self-interest in maintaining low property taxes is so high, it's unlikely that the property tax regime will change, as the LA Schools found out with the failure of their tax referendum. (Although counties throughout California have been successful with added sales taxes to fund transportation/transit initiatives).

It's too bad that people like Victor Davis Hanson can't be honest about the impact of extranormally low property taxes on the ability of local governments to address evident problems.

Labels: ,


At 8:16 AM, Blogger jacklinemelda said...

Our custom essay paper writing writers have mastered how to write all the academic formats. This is one of the imperative aspects of why we have been rated the best in nursing paper writing service.


Post a Comment

<< Home