Want to know why California is absolutely idiotic when it comes to taxes? How about this one:
A drop in property tax revenue wallops the state, because it is obligated to make up any significant loss to the schools. The Legislative Analyst’s Office projects the state will have to pony up almost $1.5 billion to K-14 schools over the next three years to compensate for declining property taxes. Gov. Arnold Schwarzenegger has already said the state will have to make up $430 million this year for school funding because property taxes have lagged projections.
“That $430 million in essence will get built into every year going forward,” Ross said. “More school costs will shift onto the state.”
Emphasis added by me. So if houses start losing value, the schools don’t even have to worry. The state MUST make up any funding difference. Now this might be just a question from somebody looking at things from a sane level, but if the teachers and the administrators know that they are guaranteed more money – every single fracking year – do they really have any incentive to review their operations and look for how things might be made more efficient and cost-effective?
And this tax burden goes to the state and then next year its that – plus the shortfall in property taxes next year, and the next year and the next year. Does anybody think this is a system that is setup to fail unless you have continually increasing home values? I certainly do. But even then Prop 13 doesn’t allow the government theives to re-value your house until you sell it. This was the practice that was forcing retirees and people who didn’t get 15% annual wage increases out of their homes. And, of course, the one thing that the government employees want is to get rid of Prop 13:
“Maybe we need to revisit not just Prop. 13 but our entire funding formula for local government,” he said. “As bad as it gets, that’s when it forces people to think and to move outside their comfort level and outside the box to address the crisis. Maybe we need to revisit these antiquated ways in which we deal with revenue streams to local government. At some point, it’s going to take an initiative, and it would have to be one from the people. It took an initiative for Prop. 13, and it’s going to take one again.”
Can’t let these crises go to waste, eh?