Author Topic: Property Taxes Killing Me  (Read 38564 times)

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #150 on: October 07, 2016, 08:16:46 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans

Radagast

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Re: Property Taxes Killing Me
« Reply #151 on: October 07, 2016, 10:43:06 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans
When I actually saw this movie I was surprised at all the misconceptions about it. Apparently even though everyone talks about it no one actually sees it.
-This movie is the origin of "Dueling Banjos". Yes, THE "Dueling Banjos". That is the banjo reference.
-The banjos are played by a protagonist and a kid sitting on the porch at a gas station. No trees.
-Actually it is more of a moral dilemma movie than a scary movie.
-Most of the rednecks are ok. Just 2 bad ones.
If you already saw it, carry on about property taxes :).

Monkey Uncle

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Re: Property Taxes Killing Me
« Reply #152 on: October 08, 2016, 04:10:13 AM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans

You say that in jest, but in some circles Appalachian-American is treated like an actual minority group.  I know a couple of bright local kids who got full rides to prestigious colleges in part because they come from low-income households in Appalachia.

Roland of Gilead

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Re: Property Taxes Killing Me
« Reply #153 on: October 08, 2016, 07:11:47 AM »
Funny enough we are driving through that deep south redneck area right now.

Having lived in Seattle 20 years and lived in this exact area in the south for 20 years, I will admit there are more refrigerators on front porches here, but Seattle has become a trash strewn drug use mecca.  20 to 30 homeless under every bridge in the downtown area with 3 jars of urine for each one.

mm1970

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Re: Property Taxes Killing Me
« Reply #154 on: October 10, 2016, 02:56:48 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans

You say that in jest, but in some circles Appalachian-American is treated like an actual minority group.  I know a couple of bright local kids who got full rides to prestigious colleges in part because they come from low-income households in Appalachia.
Admittedly it was almost 30 years ago, but I got some pretty good scholarships myself being a first-round college kid from rural Appalachia.

Undecided

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Re: Property Taxes Killing Me
« Reply #155 on: October 10, 2016, 07:09:27 PM »

You say that in jest, but in some circles Appalachian-American is treated like an actual minority group.  I know a couple of bright local kids who got full rides to prestigious colleges in part because they come from low-income households in Appalachia.
Admittedly it was almost 30 years ago, but I got some pretty good scholarships myself being a first-round college kid from rural Appalachia.

Yeah, the smart poor (white) kids from my less well-known economically desperate area were always jealous of the Appalachian-Americans.

danny9m

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Re: Property Taxes Killing Me
« Reply #156 on: October 18, 2016, 05:54:47 PM »
NJ, 2800 Sq foot home on 1/4 acre in a upper middle class town.  Property taxes on a 580,000 home $12,000 Per year.  Volunteer fire, first aid good schools. 

In NJ the state is forced to send torrents of money to about 33 poor school districts for the last 30 years by the state supreme court.  I heard Christie give a talk on this.  After 30 years of flowing state funding only 2 of these districts have a graduation rate above the state average.  Christie has a new proposal to give aid equal aid to districts.  This in theory would reduce property taxes by 2,000 on average in my town. 
The other issue is state workers are getting over on pensions and health care benefits.  The health car benefits in the state of NJ for state workers are so good that the Obama administration will fine NJ 700 million next year if these benefits are not reduced. 

I'm 54 and I see many of my high school classmates who worked for the state are retiring now with full pensions and health care.

NJ also has an underfunded pension plan, by like 40 billion dollars. 


State income tax is high so if the sales tax 7 percent going to 6 percent due to a gas tax increase recently passed.

somers515

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Re: Property Taxes Killing Me
« Reply #157 on: October 18, 2016, 06:41:31 PM »
NJ, 2800 Sq foot home on 1/4 acre in a upper middle class town.  Property taxes on a 580,000 home $12,000 Per year.  Volunteer fire, first aid good schools. 

In NJ the state is forced to send torrents of money to about 33 poor school districts for the last 30 years by the state supreme court.  I heard Christie give a talk on this.  After 30 years of flowing state funding only 2 of these districts have a graduation rate above the state average.  Christie has a new proposal to give aid equal aid to districts.  This in theory would reduce property taxes by 2,000 on average in my town. 
The other issue is state workers are getting over on pensions and health care benefits.  The health car benefits in the state of NJ for state workers are so good that the Obama administration will fine NJ 700 million next year if these benefits are not reduced. 

I'm 54 and I see many of my high school classmates who worked for the state are retiring now with full pensions and health care.

NJ also has an underfunded pension plan, by like 40 billion dollars. 


State income tax is high so if the sales tax 7 percent going to 6 percent due to a gas tax increase recently passed.

As a fellow MMM fan I also wish my NJ property taxes were lower so I understand your pain however I think you are blaming the wrong people.  Schools are primarily where your NJ property tax goes to as you can see from the break-down on your tax bill.  I won't comment on your theory about school funding since I haven't done the research on that issue, although I would note that you agree that you are getting "good schools" in exchange for your high property tax bill.  I have consistently been impressed with the NJ school districts were my sons have gone to school.

I do wish to comment on your lament about "state workers getting over on pensions" as I happen to know a little background that you may not be aware of.  The NJ pension system was working fine with contributions being taken automatically from state workers and an annual contribution into the system from the State government.  Gov. Whitman decided she would not make the contribution and every governor since her followed suit by either not making or only partially making their contribution into the pension system.  As a fellow reader of the MMM blog I know you'll understand how this effect over time has disastrous consequences.  Gov. Christie said, hey I inherited this problem let's fix it together, state workers you will contribute more to make up for the years of State shortfalls and I'll resume the annual contributions.  Any guesses on what happened next?  Yup the state workers had more taken out from their paycheck every week and then Gov. Christie didn't honor his part of the agreement.  And now you know the story of why the NJ pension system is currently ranked 3rd worst in the nation for being underfunded.  Don't worry I know lots of people who have 1/10 of their salary being taken out to fund their pension while having their wages frozen for years - oh and all by the way being underpaid compared to the private sector to begin with - and whose job description is to literally to try to serve the public interest.  So I wouldn't be so quick to blame the "state workers getting over on pensions".  I'm sure you'll also be happy to hear its my understanding that the healthcare after retirement is already being phased out.

Finally I'll add that my understanding on why NJ property taxes are so high relative to other states is that NJ has a lot of small individual towns compared to other states.  With your tax dollars you might have a local police department that is very responsive and a excellent local public school system - but yes you have to pay for those things with higher property taxes.

JLee

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Re: Property Taxes Killing Me
« Reply #158 on: October 18, 2016, 06:48:19 PM »
As a fellow MMM fan I also wish my NJ property taxes were lower so I understand your pain however I think you are blaming the wrong people.  Schools are primarily where your NJ property tax goes to as you can see from the break-down on your tax bill.  I won't comment on your theory about school funding since I haven't done the research on that issue, although I would note that you agree that you are getting "good schools" in exchange for your high property tax bill.  I have consistently been impressed with the NJ school districts were my sons have gone to school.

I do wish to comment on your lament about "state workers getting over on pensions" as I happen to know a little background that you may not be aware of.  The NJ pension system was working fine with contributions being taken automatically from state workers and an annual contribution into the system from the State government.  Gov. Whitman decided she would not make the contribution and every governor since her followed suit by either not making or only partially making their contribution into the pension system.  As a fellow reader of the MMM blog I know you'll understand how this effect over time has disastrous consequences.  Gov. Christie said, hey I inherited this problem let's fix it together, state workers you will contribute more to make up for the years of State shortfalls and I'll resume the annual contributions.  Any guesses on what happened next?  Yup the state workers had more taken out from their paycheck every week and then Gov. Christie didn't honor his part of the agreement.  And now you know the story of why the NJ pension system is currently ranked 3rd worst in the nation for being underfunded.  Don't worry I know lots of people who have 1/10 of their salary being taken out to fund their pension while having their wages frozen for years - oh and all by the way being underpaid compared to the private sector to begin with - and whose job description is to literally to try to serve the public interest.  So I wouldn't be so quick to blame the "state workers getting over on pensions".  I'm sure you'll also be happy to hear its my understanding that the healthcare after retirement is already being phased out.

Finally I'll add that my understanding on why NJ property taxes are so high relative to other states is that NJ has a lot of small individual towns compared to other states.  With your tax dollars you might have a local police department that is very responsive and a excellent local public school system - but yes you have to pay for those things with higher property taxes.

That is quite likely a major part of it. My town is barely over one square mile and has its own mayor, attorney, accountant, complete school system with board, police department (with a ton of cars...15-20 maybe), etc. Duplicity of manpower is a pretty big thing.

TheWee

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Re: Property Taxes Killing Me
« Reply #159 on: October 18, 2016, 07:55:49 PM »
As a fellow MMM fan I also wish my NJ property taxes were lower so I understand your pain however I think you are blaming the wrong people.  Schools are primarily where your NJ property tax goes to as you can see from the break-down on your tax bill.  I won't comment on your theory about school funding since I haven't done the research on that issue, although I would note that you agree that you are getting "good schools" in exchange for your high property tax bill.  I have consistently been impressed with the NJ school districts were my sons have gone to school.

I do wish to comment on your lament about "state workers getting over on pensions" as I happen to know a little background that you may not be aware of.  The NJ pension system was working fine with contributions being taken automatically from state workers and an annual contribution into the system from the State government.  Gov. Whitman decided she would not make the contribution and every governor since her followed suit by either not making or only partially making their contribution into the pension system.  As a fellow reader of the MMM blog I know you'll understand how this effect over time has disastrous consequences.  Gov. Christie said, hey I inherited this problem let's fix it together, state workers you will contribute more to make up for the years of State shortfalls and I'll resume the annual contributions.  Any guesses on what happened next?  Yup the state workers had more taken out from their paycheck every week and then Gov. Christie didn't honor his part of the agreement.  And now you know the story of why the NJ pension system is currently ranked 3rd worst in the nation for being underfunded.  Don't worry I know lots of people who have 1/10 of their salary being taken out to fund their pension while having their wages frozen for years - oh and all by the way being underpaid compared to the private sector to begin with - and whose job description is to literally to try to serve the public interest.  So I wouldn't be so quick to blame the "state workers getting over on pensions".  I'm sure you'll also be happy to hear its my understanding that the healthcare after retirement is already being phased out.

Finally I'll add that my understanding on why NJ property taxes are so high relative to other states is that NJ has a lot of small individual towns compared to other states.  With your tax dollars you might have a local police department that is very responsive and a excellent local public school system - but yes you have to pay for those things with higher property taxes.

That is quite likely a major part of it. My town is barely over one square mile and has its own mayor, attorney, accountant, complete school system with board, police department (with a ton of cars...15-20 maybe), etc. Duplicity of manpower is a pretty big thing.

Millennial Moola has an interesting thread on the Pension scenario https://millennialmoola.com/2016/06/28/new-jersey-stole-from-the-police-pension/

I was somewhat amazed at the property taxes in this article http://www.brickunderground.com/buy/NJ-suburbs Although, it shows how offering what many want...good schools, walk-able downtown, easy access to public transportation...can add value a lot of value in a crowded area, when people want to avoid sprawl.

FIPurpose

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Re: Property Taxes Killing Me
« Reply #160 on: October 19, 2016, 08:49:11 AM »
NJ, 2800 Sq foot home on 1/4 acre in a upper middle class town.  Property taxes on a 580,000 home $12,000 Per year.  Volunteer fire, first aid good schools. 

In NJ the state is forced to send torrents of money to about 33 poor school districts for the last 30 years by the state supreme court.  I heard Christie give a talk on this.  After 30 years of flowing state funding only 2 of these districts have a graduation rate above the state average.  Christie has a new proposal to give aid equal aid to districts.  This in theory would reduce property taxes by 2,000 on average in my town. 
The other issue is state workers are getting over on pensions and health care benefits.  The health car benefits in the state of NJ for state workers are so good that the Obama administration will fine NJ 700 million next year if these benefits are not reduced. 

I'm 54 and I see many of my high school classmates who worked for the state are retiring now with full pensions and health care.

NJ also has an underfunded pension plan, by like 40 billion dollars. 


State income tax is high so if the sales tax 7 percent going to 6 percent due to a gas tax increase recently passed.

As a fellow MMM fan I also wish my NJ property taxes were lower so I understand your pain however I think you are blaming the wrong people.  Schools are primarily where your NJ property tax goes to as you can see from the break-down on your tax bill.  I won't comment on your theory about school funding since I haven't done the research on that issue, although I would note that you agree that you are getting "good schools" in exchange for your high property tax bill.  I have consistently been impressed with the NJ school districts were my sons have gone to school.

I do wish to comment on your lament about "state workers getting over on pensions" as I happen to know a little background that you may not be aware of.  The NJ pension system was working fine with contributions being taken automatically from state workers and an annual contribution into the system from the State government.  Gov. Whitman decided she would not make the contribution and every governor since her followed suit by either not making or only partially making their contribution into the pension system.  As a fellow reader of the MMM blog I know you'll understand how this effect over time has disastrous consequences.  Gov. Christie said, hey I inherited this problem let's fix it together, state workers you will contribute more to make up for the years of State shortfalls and I'll resume the annual contributions.  Any guesses on what happened next?  Yup the state workers had more taken out from their paycheck every week and then Gov. Christie didn't honor his part of the agreement.  And now you know the story of why the NJ pension system is currently ranked 3rd worst in the nation for being underfunded.  Don't worry I know lots of people who have 1/10 of their salary being taken out to fund their pension while having their wages frozen for years - oh and all by the way being underpaid compared to the private sector to begin with - and whose job description is to literally to try to serve the public interest.  So I wouldn't be so quick to blame the "state workers getting over on pensions".  I'm sure you'll also be happy to hear its my understanding that the healthcare after retirement is already being phased out.

Finally I'll add that my understanding on why NJ property taxes are so high relative to other states is that NJ has a lot of small individual towns compared to other states.  With your tax dollars you might have a local police department that is very responsive and a excellent local public school system - but yes you have to pay for those things with higher property taxes.

Decided to start a separate thread for state pension deiscussion.

http://forum.mrmoneymustache.com/welcome-to-the-forum/future-of-state-pension-plans/

BlueHouse

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Re: Property Taxes Killing Me
« Reply #161 on: October 20, 2016, 12:06:11 PM »
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

Sure, that's no mystery to me.  They feel entitled to keep things the way they were, rather than as they are now.  They don't like change.  My own grandfather was priced out of his home in CA.

Some of those same people also feel that America itself has gone to hell, and rising property taxes are just another symptom.  "There are darkies at the country club now!  Men can't even keep their wives from working!"  My grandfather, in addition to being a kind and generous man, was also a raging sexist and a horrible bigot.

His solution to these parallel "problems" was to sell his expensive California home and buy an estate in rural Arkansas, where taxes are low and "people know their place".  Good riddance, Grandpa.  RIP, but the world is ready to move on without you.

I used to have similar beliefs.  I live in a gentrified community.  I am one of the gentrifiers.  Believe me, there's no question that the neighborhood is 1000 times better than it was before when fully armed marines refused to walk the streets because it was a war zone and now I can walk around at night with little risk.  But there were some decent people who lived here before too and as I get to know some of them (some return in subsidized apartments), I'm learning just how much community matters in poorer communities.  These communities were a support system for many who didn't have the money to pay for services or the skills or tools to DIY.  It's almost halloween, and families that were shipped out of here 15 years ago come back to bring their kids and grandkids to a neighborhood that they thought of as home and to see old friends.  The community was scattered, but Halloween seems to be a homecoming for people who were blown away to 3 different states when the deal was struck to move them out. 

If you have any understanding of the benefits of diversity, you should remember that diversity is not just about race -- it's also about age and economics.  I believe that living among people who are unlike you in terms of race, finance, background opens you up to a world of new thoughts and understanding.  I bought into this dream -- I hope it works.  I realize it's still an experiment.  All I can say is that for me, it's working and making me more open-minded.  I hope it works on the other side of the equation so that seeing my example will help to uplift some of my neighbors out of poverty.  Only time will tell. 

But my point is, don't be so quick to forget that your grandpa had value to the neighborhood even though he couldn't afford to keep up with the neighbors. 

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #162 on: October 20, 2016, 08:44:06 PM »
Quote
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

How does this work?
Traditionally rich people don't seek out paying higher taxes and most of my property tax goes on schools and transit - something rich people don't use.
Is raising property taxes typically just to build fancy municipal fitness centers and golf courses or is it a deliberate gentrification plan to remove poor people?


Roland of Gilead

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Re: Property Taxes Killing Me
« Reply #163 on: October 21, 2016, 06:15:43 AM »
Quote
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

How does this work?
Traditionally rich people don't seek out paying higher taxes and most of my property tax goes on schools and transit - something rich people don't use.
Is raising property taxes typically just to build fancy municipal fitness centers and golf courses or is it a deliberate gentrification plan to remove poor people?

It is very simple.  You put a politician near money, they spend it.

robartsd

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Re: Property Taxes Killing Me
« Reply #164 on: October 21, 2016, 11:06:01 AM »
Quote
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

How does this work?
Traditionally rich people don't seek out paying higher taxes and most of my property tax goes on schools and transit - something rich people don't use.
Is raising property taxes typically just to build fancy municipal fitness centers and golf courses or is it a deliberate gentrification plan to remove poor people?

It is very simple.  You put a politician near money, they spend it.
In fixed tax rate areas, rising property values simply mean more property taxes for local politicians to spend. I had never heard of Washington's method for determining tax rates before (total funds needed/total assessed value). Unlike areas with a fixed tax rate, it means that only appreciation relative to the rest of the tax district would increase the share of taxes paid by a property owner. It still has the power to displace old residents in a gentrifying neighborhood by increasing the share of the tax district's costs which they would be responsible for. (However, I imagine that most people displaced by gentrification are renters rather than homeowners, so any property tax increase would directly impact them.)

Undecided

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Re: Property Taxes Killing Me
« Reply #165 on: October 21, 2016, 06:08:03 PM »
Quote
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

How does this work?
Traditionally rich people don't seek out paying higher taxes and most of my property tax goes on schools and transit - something rich people don't use.
Is raising property taxes typically just to build fancy municipal fitness centers and golf courses or is it a deliberate gentrification plan to remove poor people?

It is very simple.  You put a politician near money, they spend it.
Ha Ha! So true. But I think the poster wasnt talking about what the prop tax money is spent on, but more how property values increase so much and so fast when old homes are razed and new behemoth mcmansions are built. So that now grandmama, in her tiny house and living on her tiny fixed income and no way to earn more money, is forced to sell the home she's lived in for decades because she can't afford the cost of increased prop taxes. When you live where house values can increase by 30% or more a year for several years (Cali in the early to mid  2000's) it would be hard for an older low infome retiree to stay in their homes.

That doesn't make sense as a response nobodyspecial's question---it still implies increased spending. Realistically, the "rich" people moving to an area may only be better off than the earlier inhabitants---still demanding public schools in lieu of Exeter and clamoring for more roads rather than flying their helicopters---and have costlier expectations.

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #166 on: October 21, 2016, 10:18:10 PM »
In my (Canadian) small town the property tax is the assessed value * tax rate.
The assessed value goes up each year with property market but the tax rate goes down to give roughly the same amount of tax take - except for general inflation.

Most of the money is spent on things the rich don't want more of so a rise in prices doesn't mean a rise in tax demand.  In fact a bunch of $M McMansions would lower the property taxes of existing home owners.

sol

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Re: Property Taxes Killing Me
« Reply #167 on: October 22, 2016, 10:09:18 AM »
So most states will raise them when property values increase and often lower them when property values decrease. 

I've seen the exact opposite situation, here.  When property values decline, the city is forced to RAISE tax rates because the city infrastructure requires relatively constant spending.  They try to even out their income stream by raising rates when values go down, in order to make up the shortfall.

Sadly, they never seem to lower the rates again when property values go back up.

mm1970

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Re: Property Taxes Killing Me
« Reply #168 on: October 22, 2016, 12:27:54 PM »
So most states will raise them when property values increase and often lower them when property values decrease. 

I've seen the exact opposite situation, here.  When property values decline, the city is forced to RAISE tax rates because the city infrastructure requires relatively constant spending.  They try to even out their income stream by raising rates when values go down, in order to make up the shortfall.

Sadly, they never seem to lower the rates again when property values go back up.
Same thing here but most tax increases are only done if voter approved first. And then not for property taxes. But they'll try to raise sales taxes or other taxes or increase school bonds to cover shortfalls. There's always a measure up to increase various taxes or school bonds. Sometimes they're approved, sometimes not. If not I guess they cut funding for programs. The town next to mine has a measure on the ballot to increase sales tax to cover the shortfall for police services. If approved it'll be one of the highest dales taxes in Calif. If not they'll cut police and 911 services. Of course the fact that they just bought a fleet of new Dodge Charger Pursuit model police cars and Chevy Tahoes police models has nothing to do with the shortfall. Nope...nothing ;-).

 But they won't raise property taxes for that stuff. When the housing market crashed in 2007 lots of people got their prop taxes lowered by quit a bit. To function on the lower revenue they laid off hundreds of teachers and school employees and shut down a bunch programs and schools.

ETA this has been my experience but maybe some towns in Cali do raise prop taxes to cover shortfalls. Some towns have special taxes called Mello Roos that add an approx. 1/2% to prop taxes to cover the cost of infrastructure like parks, street lights, etc... Those are usually in new master planned communities and eventually end once those things are paid off.
In our town they just try to pass propositions to issue bonds to pay for school infrastructure.  "I already pay enough taxes!!"  Dude, I looked, and you paid $1000 last year on a $1.3M home. 

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #169 on: October 22, 2016, 01:41:39 PM »
^oh yeah - lovely prop 13. Even if those school bonds pass it won't cost that dude with the $1000/year taxes on his $1.3 mm house much because the amount he'll pay for the bond will be based on his house's property tax basis rather than its current assessed value. So if his property tax basis is $100k he's going to be paying MUCH less for the bond than if it was based on the current market value.
Has anyone proposed extending this to income tax?
You pay income tax based on what your ancestors paid when they first came to America (in unadjusted $)
So all those real Americans (the 100Million that were on the Mayfower) will pay a few groats and newcomers will pay $$$$$


nobodyspecial

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Re: Property Taxes Killing Me
« Reply #170 on: October 22, 2016, 03:23:21 PM »
I thought California had a crazy rule where the tax assesment was whatever the house was last sold for?
So if you had managed to keep grandfather's farm in a family trust for a few generations you could have a dozen acre mansion estate in the middle of Beverly Hills with a tax value of $100.

Has that gone away ?

Lagom

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Re: Property Taxes Killing Me
« Reply #171 on: October 22, 2016, 08:17:15 PM »
Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.
I've taken the same attitude toward Prop 13. I think there are more problems with it in areas with the highest property values than there are in moderately priced markets.

I'll have to take this attitude when I buy (SF Bay Area for me, so the very top of the market, alas) just so I'm not super pissed every time the tax bill comes, but prop 13 is seriously one of the stupidest things ever and royally screws anyone who is not a highly paid tech worker (or equivalent). I get why it was passed and certainly no one foresaw the insane housing situation that would eventually develop, but man does it annoy me that after I finally save an absurdly large down payment to buy a thoroughly underwhelming SFH, my reward will be subsidizing services for thousands of millionaire Gen Xers and baby boomers who have no problem droning on about entitled millennials, or how they worked their own way through college and still saved enough to buy a house 3 years after graduating, or complaining about their supposedly high tax rates.

Unfortunately for me, there is no place on earth I would rather live than Northern California, but man does prop 13 grind my gears :)

danny9m

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Re: Property Taxes Killing Me NJ $100,000 Pensions
« Reply #172 on: October 23, 2016, 07:36:19 AM »
This is what I mean by getting over, "As 2014 ended, 1,988 retirees were collecting state pensions in excess of $100,000 a year — the elite “1-percenters” among New Jersey’s 285,000 retirees.  (Click here for the list)  That number has grown quickly since 2010 when the count was 971.

http://watchdog.org/200210/nj-100k-pensions-double/


•Of those PFRS pensioners, nearly 93 percent — 873— took advantage of “special retirement,” a provision in state law that enables police and fire officials, but not other public employees, to collect full pensions at relatively young ages.

Under special retirement, Joseph Blaettler was able to step down as Union City deputy police chief at age 46 to start pocketing roughly $135,000 a year for life.

danny9m

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Re: Property Taxes Killing Me NJ $200 Billion in Hole for Benefits
« Reply #173 on: October 23, 2016, 07:38:01 AM »
I was wrong NJ is 200 billion in the hole for State Pensions

Taxpayers beware! NJ debt nears $200 billion for benefits

http://watchdog.org/237832/nj-benefit-debt-200b/

danny9m

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Double-dipping tricks cost millions in NJ’s Essex County.
http://watchdog.org/236163/nj-double-dipping-tricks/

Goldielocks

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Re: Property Taxes Killing Me
« Reply #175 on: October 23, 2016, 12:34:44 PM »
^oh yeah - lovely prop 13. Even if those school bonds pass it won't cost that dude with the $1000/year taxes on his $1.3 mm house much because the amount he'll pay for the bond will be based on his house's property tax basis rather than its current assessed value. So if his property tax basis is $100k he's going to be paying MUCH less for the bond than if it was based on the current market value.
Has anyone proposed extending this to income tax?
You pay income tax based on what your ancestors paid when they first came to America (in unadjusted $)
So all those real Americans (the 100Million that were on the Mayfower) will pay a few groats and newcomers will pay $$$$$
Well Calif does have a 2% annual increase in prop taxes so they do go up. I think when prop 13 was enacted (mid 1970s) the logic was to set the prop taxes the same for everyone (1% of the purchase price) and add in a 2% increase on that amount each year for inflation, and that 10 years down the road a new buyer will probably be paying prop taxes somewhat close to what a long term buyer was paying. But then property values went wacko and far out paced that 2% annual increase - especially in the late 1990s and early 2000s. Median price for a  house in my hood in 1996 was under $150k. 10 years kater median price was around $700k. Don't think the framers of prop 13 saw that coming. Don't think anyone saw that coming.

They made a huge mistake to set it at 2% instead of CPI, too.  Many, many years inflation on city services has been more than 2%.  I think if it had been set to inflation, it would not be so severe as today.

Goldielocks

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Re: Property Taxes Killing Me
« Reply #176 on: October 23, 2016, 12:41:31 PM »
Okay,  I checked inflation.CPI US calculator says..  CPI 1975 to 2016 ==4.49   

2% increase over 41 years = 2.25

So,   the California prop 13 set the 2% rate way too low, and those on it, for a long time are paying about half of the property taxes they should be paying, in a world where the intent of prop 13 matched the actuality of execution.

Undecided

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Re: Property Taxes Killing Me
« Reply #177 on: October 24, 2016, 08:52:23 AM »
Okay,  I checked inflation.CPI US calculator says..  CPI 1975 to 2016 ==4.49   

2% increase over 41 years = 2.25

So,   the California prop 13 set the 2% rate way too low, and those on it, for a long time are paying about half of the property taxes they should be paying, in a world where the intent of prop 13 matched the actuality of execution.
I think a lot of Californians would be OK with aa annual % increase higher than 2% - which I agree is way too low. What most don't want is to be reassessed each year like they do in many other States, and see tax rates go up by huge amounts each year during bubbles.

In the two states in which I own real estate, housing values only apportion among properties the total tax to be raised (e.g., the city council and budgeting office have determined the budget, and now X percent of it needs to be apportioned among the taxed real property). From your post, it seems like you're suggesting that if there's a run up in property values generally, the total tax revenue just goes up as a consequence---does the city or county just get more revenue than it budgeted for? What happens to the excess? I don't mean in the flippant "they find a way to spend it" sense.

mm1970

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Re: Property Taxes Killing Me
« Reply #178 on: October 24, 2016, 11:18:31 AM »
Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.
I've taken the same attitude toward Prop 13. I think there are more problems with it in areas with the highest property values than there are in moderately priced markets.

I'll have to take this attitude when I buy (SF Bay Area for me, so the very top of the market, alas) just so I'm not super pissed every time the tax bill comes, but prop 13 is seriously one of the stupidest things ever and royally screws anyone who is not a highly paid tech worker (or equivalent). I get why it was passed and certainly no one foresaw the insane housing situation that would eventually develop, but man does it annoy me that after I finally save an absurdly large down payment to buy a thoroughly underwhelming SFH, my reward will be subsidizing services for thousands of
Quote
millionaire Gen Xers and baby boomers who have no problem droning on about entitled millennials, or how they worked their own way through college and still saved enough to buy a house 3 years after graduating, or complaining about their supposedly high tax rates.

Unfortunately for me, there is no place on earth I would rather live than Northern California, but man does prop 13 grind my gears :)
Come on now.

I'm an X-er who paid my way through college with loans and the military.

I was still not able to buy a house in CA until I was in my mid-30s.
Alas, it was on the way UP, so my house is FINALLY worth what it was 12 years ago when we bought it.  The silver lining of the crash was that my prop taxes went down from $8400 to $5500 at the bottom.  (They are now back up around $7k).

ohsnap

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Re: Property Taxes Killing Me NJ $100,000 Pensions
« Reply #179 on: October 24, 2016, 11:49:04 AM »
This is what I mean by getting over, "As 2014 ended, 1,988 retirees were collecting state pensions in excess of $100,000 a year — the elite “1-percenters” among New Jersey’s 285,000 retirees.  (Click here for the list)  That number has grown quickly since 2010 when the count was 971.

http://watchdog.org/200210/nj-100k-pensions-double/


•Of those PFRS pensioners, nearly 93 percent — 873— took advantage of “special retirement,” a provision in state law that enables police and fire officials, but not other public employees, to collect full pensions at relatively young ages.

Under special retirement, Joseph Blaettler was able to step down as Union City deputy police chief at age 46 to start pocketing roughly $135,000 a year for life.
In many states property taxes do not go to fund state pensions. Here in Calif all property tax money goes to fund local government and education, with the bulk of the money going to fund public school from K on up. The money stays within the county.

But the money that goes to "local government and education" pays for pensions, too.  Fire dept, sheriff's dept, teachers, water district, etc...they all have very rich pension schemes.  An example in Orange County: The city of Anaheim owed CalPers $56million in FY2015-2016 for their city workers' pensions.

tooqk4u22

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Re: Property Taxes Killing Me
« Reply #180 on: October 24, 2016, 01:06:48 PM »
Okay,  I checked inflation.CPI US calculator says..  CPI 1975 to 2016 ==4.49   

2% increase over 41 years = 2.25

So,   the California prop 13 set the 2% rate way too low, and those on it, for a long time are paying about half of the property taxes they should be paying, in a world where the intent of prop 13 matched the actuality of execution.
I think a lot of Californians would be OK with aa annual % increase higher than 2% - which I agree is way too low. What most don't want is to be reassessed each year like they do in many other States, and see tax rates go up by huge amounts each year during bubbles.

But its not 2%, anytime a house is sold or improved the taxes are reset to current rate - so when the house transfers it could be far more than 2% and usually is.  Its not a perfect law but it is better than people losing their houses because property taxes increase too much/too fast. 

I had a house in NJ and my taxes doubled in the span of 6 years, the increase worked out to be about a $500 per month.   I managed due to living well below my means but that is a meaningful increase that put strain on a lot of people in the community.  Since then NJ has enacted legislation to cap increases to 2% but unlike CA, each town can go beyond that with voter approval.  Also, the cap doesn't apply to capital expenditures, debt service changes, pension costs, health care costs - some pretty big items.

Goldielocks

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Re: Property Taxes Killing Me
« Reply #181 on: October 24, 2016, 02:19:45 PM »
Originally, for CA, (60's and 70's) the increase in property values led to a direct increase in property taxes, which were assessed at a percentage (e.b., 1%) of property value.

Through the 70's of course, this would mean huge 20% increases every year for property taxes, for people living in existing homes.  (it was not adjusted).   A second problem was with some assessments that were artificially low, being suddenly corrected in one year.

The extra money went to the city budget.   Big money rush for the city, likely resulting in spending on improvements with fire, police, roads, libraries, and sewers, water, etc.

The population became upset at rampant increases and expanding city budgets, and Prop 13 was passed by a 65% approval vote of 70% the population in 1978.   A main change of Prop 13 was to limit the annual property tax paid by an individual, on an existing property, to 2% per year.   (NOTE, not to CPI, but to a named 2%).  Other changes were to revert to market assessment in purchase year as the basis of pricing, and to limit overall property tax rates and require 2/3 vote to pass future changes in taxation rates  (making it hard to change in future).

The average home price in 1975 was close to 50,000, for example.  That home would have paid a maximum of 1% or $500/year in 1978, and would therefore pay a maximum of $1060 per year in taxes today... and be worth >$350,000, with neighbors in identical property paying $3800/yr.

So -- Today, nearly 40 years later --

 Yes, the extra increase goes to the bottom line of the city, BUT, because Prop13 has been around so long, using 2% instead of the actual city expenses increase (approx 3.9%/yr), the average property tax paid by homeowners NET over the entire group, is actually quite low.

I calculated that the average property tax in California Alameda Country, across all households new and old was $692/yr, (I am still not sure how it gets to be so low, maybe because of defaults or zero taxed homes?  This is total revenue / number of households) but that the average property tax when buying a home today is $3800...   

So, today, the extra money obtained would simply go to shore up underfunded programs due to the very low average tax rate, and reduced transfers from State funds.   Note that property tax is only 14% of the total budget that the Alameda County administers, they also get transfer funds from the state, and in-area revenues.. which may be driving up state taxes to cover it all.


Meanwhile, when a decrease in net property values (2008/9) reduces many homeowners' tax, the city again is short of money.


This was a very interesting updated look at property taxes for me,  I had not revisited these numbers since 2007, when I recall that the average property tax paid was a $400 per property, yet new owners (me looking for a home at that time) would be paying $8k/yr... 





Lagom

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Re: Property Taxes Killing Me
« Reply #182 on: October 24, 2016, 02:51:37 PM »
Come on now.

I'm an X-er who paid my way through college with loans and the military.

I was still not able to buy a house in CA until I was in my mid-30s.
Alas, it was on the way UP, so my house is FINALLY worth what it was 12 years ago when we bought it.  The silver lining of the crash was that my prop taxes went down from $8400 to $5500 at the bottom.  (They are now back up around $7k).

Didn't say all Gen-Xers. I have no inherent age bias, just observing a trend. At 33, I don't even consider myself a millennial although I technically am. The point more was that there are a lot of people in the 40+ category who benefited from way cheaper college, way lower housing prices, and an unprecedented period of economic growth, so it's hard not to be annoyed when individuals from that demographic complain about millennials and/or their tax burdens, when in fact their fair share of the latter is subsidized by people like me. If that behavior doesn't apply to you then I have no beef :)

Undecided

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Re: Property Taxes Killing Me
« Reply #183 on: October 24, 2016, 03:54:08 PM »
Come on now.

I'm an X-er who paid my way through college with loans and the military.

I was still not able to buy a house in CA until I was in my mid-30s.
Alas, it was on the way UP, so my house is FINALLY worth what it was 12 years ago when we bought it.  The silver lining of the crash was that my prop taxes went down from $8400 to $5500 at the bottom.  (They are now back up around $7k).

Didn't say all Gen-Xers. I have no inherent age bias, just observing a trend. At 33, I don't even consider myself a millennial although I technically am. The point more was that there are a lot of people in the 40+ category who benefited from way cheaper college, way lower housing prices, and an unprecedented period of economic growth, so it's hard not to be annoyed when individuals from that demographic complain about millennials and/or their tax burdens, when in fact their fair share of the latter is subsidized by people like me. If that behavior doesn't apply to you then I have no beef :)

Man, Prop 13 was passed before any Gen Xer could vote, and it's still our fault!

robartsd

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Re: Property Taxes Killing Me
« Reply #184 on: October 25, 2016, 08:47:31 AM »
Didn't say all Gen-Xers. I have no inherent age bias, just observing a trend. At 33, I don't even consider myself a millennial although I technically am. The point more was that there are a lot of people in the 40+ category who benefited from way cheaper college, way lower housing prices, and an unprecedented period of economic growth, so it's hard not to be annoyed when individuals from that demographic complain about millennials and/or their tax burdens, when in fact their fair share of the latter is subsidized by people like me. If that behavior doesn't apply to you then I have no beef :)
It's not just that Gen-X had it easier than millennials, deficit spending in the US has been placing increasing burdens on future taxpayers for most of the last century (eased somewhat by monetary inflation).

I calculated that the average property tax in California Alameda Country, across all households new and old was $692/yr, (I am still not sure how it gets to be so low, maybe because of defaults or zero taxed homes?  This is total revenue / number of households) but that the average property tax when buying a home today is $3800...   
Not all the property taxes in a county go to the county government, so I think your $692/yr may just be the portion of the property that the county government gets.

tooqk4u22

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Re: Property Taxes Killing Me
« Reply #185 on: October 25, 2016, 08:53:28 AM »
I calculated that the average property tax in California Alameda Country, across all households new and old was $692/yr, (I am still not sure how it gets to be so low, maybe because of defaults or zero taxed homes?  This is total revenue / number of households) but that the average property tax when buying a home today is $3800...   

I don't have a problem with that, it promotes stability for homeowners and requires government to be fiscally responsible.


Meanwhile, when a decrease in net property values (2008/9) reduces many homeowners' tax, the city again is short of money.

I never understood this part of it.  Homeowners shouldn't get protection from rising property taxes combined with downside benefits. This part should be changed so that both the homeowners and the towns benefit from the stability argument.   

Yes, the extra increase goes to the bottom line of the city, BUT, because Prop13 has been around so long, using 2% instead of the actual city expenses increase (approx 3.9%/yr), the average property tax paid by homeowners NET over the entire group, is actually quite low.

Maybe, but argument loses a little when property tax revenue increase by 4.11% over the same period. 

« Last Edit: October 25, 2016, 08:55:41 AM by tooqk4u22 »

Goldielocks

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Re: Property Taxes Killing Me
« Reply #186 on: October 25, 2016, 09:21:28 AM »
I calculated that the average property tax in California Alameda Country, across all households new and old was $692/yr, (I am still not sure how it gets to be so low, maybe because of defaults or zero taxed homes?  This is total revenue / number of households) but that the average property tax when buying a home today is $3800...   

I don't have a problem with that, it promotes stability for homeowners and requires government to be fiscally responsible.


Meanwhile, when a decrease in net property values (2008/9) reduces many homeowners' tax, the city again is short of money.

I never understood this part of it.  Homeowners shouldn't get protection from rising property taxes combined with downside benefits. This part should be changed so that both the homeowners and the towns benefit from the stability argument.   

Yes, the extra increase goes to the bottom line of the city, BUT, because Prop13 has been around so long, using 2% instead of the actual city expenses increase (approx 3.9%/yr), the average property tax paid by homeowners NET over the entire group, is actually quite low.

Maybe, but argument loses a little when property tax revenue increase by 4.11% over the same period.

Homeowners with upside protection still have 2% tax applied until they match market rates, aren't protected by the downfall.

Property tax increases by 4 % a year, by increases taxes on new homes and resale of existing homes to new buyers by much much more than 4%.  Some think that is fair but I would rather everyone pay close to their share of actual services, and have deferment options for those on fixed incomes if needed.


tooqk4u22

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Re: Property Taxes Killing Me
« Reply #187 on: October 25, 2016, 11:48:24 AM »
Homeowners with upside protection still have 2% tax applied until they match market rates, aren't protected by the downfall.

Property tax increases by 4 % a year, by increases taxes on new homes and resale of existing homes to new buyers by much much more than 4%.  Some think that is fair but I would rather everyone pay close to their share of actual services, and have deferment options for those on fixed incomes if needed.

Why does a fixed income matter - so you mean retired or poor?  So it is ok for someone who has a certain income to be forced out of their house because property taxes rise too much?  You (the buyer) 100% controls whether or not to buy the house with said property taxes....don't think its fair then don't buy the house.  Or buy and take comfort that when the neighbors move then the next buyer will likely be paying more than you. 

Lagom

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Re: Property Taxes Killing Me
« Reply #188 on: October 25, 2016, 12:09:53 PM »
Homeowners with upside protection still have 2% tax applied until they match market rates, aren't protected by the downfall.

Property tax increases by 4 % a year, by increases taxes on new homes and resale of existing homes to new buyers by much much more than 4%.  Some think that is fair but I would rather everyone pay close to their share of actual services, and have deferment options for those on fixed incomes if needed.

Why does a fixed income matter - so you mean retired or poor?  So it is ok for someone who has a certain income to be forced out of their house because property taxes rise too much?  You (the buyer) 100% controls whether or not to buy the house with said property taxes....don't think its fair then don't buy the house.  Or buy and take comfort that when the neighbors move then the next buyer will likely be paying more than you.

Sure, from a mindset standpoint for those like me who can manage to save up a down payment, that's fine, but that doesn't mean Prop 13 was a good idea. And why should my neighbor paying more taxes than me on a house with the same value be a comfort?  Why is an elderly person being "forced" to sell their house for hundreds of thousands, or even $1m+ in profit (because reverse mortgages aren't a thing?) intrinsically worse than younger generations being potentially unable to ever buy property because the taxes are so grossly disproportionate?

I'm no policy expert but there has to be a better way to serve both purposes. We can protect house-poor seniors with low fixed incomes through laws specifically designed for them. I see no reason why the generally wealthy should benefit just as much purely because they were lucky with their timing when buying a home.

robartsd

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Re: Property Taxes Killing Me
« Reply #189 on: October 25, 2016, 12:56:08 PM »
I personally like the idea that the total property taxes to be raised divided by the total assessed value is used to determine the tax rates (as one poster states Washington does). I also like the option some jurisdictions have for seniors to defer property taxes until they move out of the house (accruing interest equal to cost to the jurisdiction of raising funds by selling bonds). While I do expect that I will benefit from Prop 13's property tax structure, I can see why it can cause problems.

Vilgan

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Re: Property Taxes Killing Me
« Reply #190 on: October 26, 2016, 03:01:22 PM »
I personally like the idea that the total property taxes to be raised divided by the total assessed value is used to determine the tax rates (as one poster states Washington does). I also like the option some jurisdictions have for seniors to defer property taxes until they move out of the house (accruing interest equal to cost to the jurisdiction of raising funds by selling bonds). While I do expect that I will benefit from Prop 13's property tax structure, I can see why it can cause problems.

Here's the Q&A on the approach in washington, which keeps stuff from growing much more than 1% per year unless your house appreciates a lot faster than others in the same tax district: http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/propertytax/onepercentqna.aspx


robartsd

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Re: Property Taxes Killing Me
« Reply #191 on: October 26, 2016, 04:58:03 PM »
Here's the Q&A on the approach in washington, which keeps stuff from growing much more than 1% per year unless your house appreciates a lot faster than others in the same tax district: http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/propertytax/onepercentqna.aspx
I think Washington's system makes much more sense than California's.