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Assessing Prop. 13: Should the Disparities It's Caused Survive?

October 05, 2003

Re "Huge Property Tax Disparities on Lido Isle Show Legacy of Prop. 13," Sept. 29:

Of course, the "unfairness" issue only comes up when state and local governments are casting about for new sources of revenue to balance budgets after the fact.

As a 27-year resident of Lido Isle, I found the article particularly interesting. Only the day before, my wife and I were considering our good fortune to have such great new neighbors next door. We were also considering how the "unfairness" issue of differing property taxation has quickly shifted from our household to theirs. Until last month we had been paying 10 times more property tax than our old neighbors. Now, our new neighbors are paying three times more than we are.

The argument goes that the new property tax is a "payback" for the years of undervaluation of the property. Though this argument is valid, it should be added that the new tax is, in part, a "pay ahead" for the future under-valuations if the current owners remain in their home.

How the state of California comes to terms with the massive problem of revenue deficits is no doubt a complex issue, unless you are Arnold Schwarzenegger, who proposes "auditing the books" to somehow solve the problem. (Apparently, he secretly suspects someone has embezzled the funds we now lack.) Just as surely as I know the taxpayers will ultimately pay to solve the problem, I know the additional $30,000 in property taxes, generated by the sale of one house, on one street, in one neighborhood, in one town, in one of many counties in the state will vanish without a trace.

Brian Singer

Lido Isle

*

The Los Angeles Times story on Lido Island real estate and taxes supplied the data that many of us had been wondering about. Does Proposition 13 work as the citizens hoped it would? The answer: Yes.

The 22% who have houses valued at up to $200,000 is remarkably similar to the 32% who make less than $59,999 a year, which is the salary that it would take to qualify for loans for those houses.

The 28% of homes valued at $1 million-plus balances the 30% who make $200,000 or more.

That was the purpose of Proposition 13 -- to allow people at lower incomes to be able to stay in their homes instead of being forced to sell when they could not afford radically increasing taxes each year. People who buy a million-dollar house know what the tax bill will be at the time of purchase and must think they can afford it!

Jeanne Sleeper

Laguna Beach

*

Interesting report, but nothing we did not know. We all know Proposition 13 is not fair. I have been paying peanuts since we voted it in.

Now let's be creative. Figure out the total taxes paid on Lido Isle, then figure the total retail value of all the homes and get a tax rate that it would take to produce the total taxes. Lets not just talk about taxing little old folks out of their home. Let's see if it would happen.

Lido would be an extreme example.

Robert Davenport

Huntington Beach

*

I pay $700 a year on my home in Orange that I bought in 1971 for $38,300.

It helps me raise my four young children. A bachelor neighbor across the street has his smaller but very nice home listed at $600,000. This means that the new buyer will pay seven to nine times more than I in property taxes.

Home prices have trebled since 1997. But income property values in 1997, for example, were about the same as they were in 1977. To a large extent the run-up was catch-up.

A very timely, informative and interesting article.

Raymond J. Rostan

Santa Ana

*

The fairest tax is the one based on what you, not your neighbors, paid for a house. The idea of taxing you based on the "unrealized gain" of your property is unfair and ludicrous. The long-term homeowner has paid the tax for many more years than the one who purchased a home most recently.

If you can afford to pay $10 million for your home, you should not be surprised that the taxes will be higher than if you paid $200,000. The tax rate as a percentage of the home's purchase price is the same for each homeowner on Lido Isle.

Let's quit trying to eliminate the hard-gained benefits of Proposition 13 and focus instead on creating equitable taxes based on what you pay for your home, not the gain in value of an unsold property. Don't worry, when the old time owners sell their homes, the taxman will get his due.

Ralph Turner

Mission Viejo

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