Property Tax

The "Blame 13" chorus is at it again. You can always count on it to sing "It's all Proposition 13's fault" during difficult economic times. The story has gone national, with columns in Time magazine and the New York Times taking shots at Proposition 13. The attacks are probably best summed up by an editorial cartoon picturing Proposition 13 as the beginning of the end for California civilization. Let's get the facts straight.

Proposition 13 has overstayed its welcome. I say this as my colleagues Marc Lifsher and Evan Halper bring word elsewhere in the paper today that Gov. Arnold Schwarzenegger wants to impose a fee on property insurance premiums as a way to help close the state's estimated $14-billion budget gap. That's just dandy, isn't it? A surcharge on insurance that's based on a property's replacement cost, and hence much of its market value.

The tumbling housing market has prompted county tax officials around Southern California to begin reducing the assessed value of many houses, resulting in lower tax bills for homeowners but less-than-expected revenue for already cash-strapped governments. The values of more than 41,000 homes have been reassessed downward so far in Los Angeles County, resulting in an average tax saving of $660.

It takes only a few minutes for homeowners to request a reduction in their property tax assessment. But that has not stopped some private companies from sending out mass mailers offering to do it for them. The catch: The companies would keep large percentages of the tax savings homeowners reap with a lower assessment. In one firm's case, that came to 45%.

Politicians don't like to talk about taxes except to brag about cutting them. But with California's widening budget deficit threatening deep cuts in education and other public services, it's difficult to avoid discussions about raising taxes. Unfortunately, what's likely to be lost in the upcoming partisan melee over whether new taxes are needed to close the $16-billion gap is an equally important tax issue -- California's aging and often unfair tax system needs to be overhauled.

As state leaders hunt for politically palatable solutions to the swelling budget shortfall, some Democrats are proposing unorthodox ways to generate cash. Strip clubs, six-packs, grocery bags and iTunes downloads are all in their sights as alternatives to broad income or sales tax hikes. So are gas guzzlers and yachts -- and a tax loophole for criminals.

Like many other baby boomers, Manhattan Beach residents John Osten, 62, and his wife Rose, 61, were in search of a simpler life. After raising their family in the "tree" section of this ocean-side city, and with plenty of equity built up during 18 years at their 3,000-square-foot, single-family home, the Ostens were hoping to return to the Strand area adjacent to the city's beach, where they had once lived an active life of surfing, running and biking.

This seems like a nice, quiet day to answer e-mail -- at least some of the civil comments that have been rolling in about state taxes and deficit spending. Readers have been reacting to columns I've written contending that until Capitol politicians summon the courage to raise taxes to pay for services the public demands, the state will continue to wallow in red ink. Sure, programs should be prioritized and some pared or even eliminated.

The number of homeowners in Los Angeles County who will receive a lower property tax bill grew to 128,000 this week because of the deteriorating real estate market. Los Angeles County has been at the forefront of the reassessment process this year, and large numbers of homeowners in neighboring counties are expected to receive reduced assessments before property tax bills are mailed in October. "The goal is to get this done quickly and fairly," Los Angeles County Assessor Rick Auerbach said.