If you’re a homeowner, most likely you received your property tax bill in the mail last week. I did and I owe $11,854. (If Washington Mutual does not collapse I will pay this amount from my savings). My parents, who live next door, with the same size lot, will be paying $1,696.
Why the huge difference? A little thing called Proposition 13, which protects my parents and other seniors. Both of my parents are retired teachers that own no other property and are on a fixed income. Prop. 13 lets them and seniors like them hold on to their home.
Even though our property taxes are nearly a 10 to 1 difference our “special assessments” are the same. Both houses have special assessments of $525.54 each. The bulk of this is $395.64 for the city of San Jose sewer sanitation/storm fee, which equates to $79 million to the city per year. Townhouses/condominiums pay less then single family homes at $223.68. The reasoning by city staff is that condos use the toilet less since there tend to be fewer occupants compared to houses. The money that is collected goes towards our sewers and the water pollution control plant. A portion of these funds are then bonded out to make them go further and to be used to pay back bonds that the city issued in the mid-1990s to build and expand the recycled water system. (I wrote about this plant on a prior blog on June 2nd called “Disneyland Comes to Alviso.”)
Last week on the city council, we were approving a contract for security guards at the water pollution control plant. City staff did an RFP and chose a vendor based on references and price. At the last minute it was proposed by some on the council that Living Wage should apply to this type of work and we should therefore pay the security guards more then what they are asking to be paid.
If it would apply to this contract then it would open the door to higher costs for janitorial and landscape maintenance as well at the water pollution control plant.
Living Wage would raise the cost of running the plant on a day to day basis since it would be paying contracts at above market rate. The thought by some on the council was that it was okay to spend more then we need to operate the plant since it is not general fund dollars but instead Sewer Sanitation funds paid by San Jose property owners. Some of the council felt paying people above market rate is OK and the homeowners would support this.
Well, considering the council already raised the rate this year by 15 percent, I think we should ask the homeowners directly whether or not they would like the city to pay more then it needs to for services and then in turn increase the rates? How about for those seniors on fixed incomes under Prop 13 where special assessments keep increasing and make a higher percentage of their property tax bill?
The last time we raised fees, my office received calls against the increase. My office receives calls daily about the need for street repair, better public safety, keeping fire houses open, maintaining parks. However, I have not once received a call asking me to have homeowners pay more for security guards at the plant even though they did not ask for more money.
The reality is $1 billion is needed to update and maintain the plant and the council will need to raise rates in the future to pay for these improvements. However when we have discretion we should look to keep costs low and raising your taxes only when it is really needed. I support infrastructure investment since we all the use the toilet every day. Councilmember Constant and I voted against paying more then we needed to with your money for services that are not core to the city.
Finally looking at my property tax bill closer if we remove the special assessments of $525, that leaves roughly $11,329 for straight property taxes. Where does that money go?
$6570 goes to my local school district.
$2039 goes to the County of Santa Clara.
$1019 goes to my local community college district.
680 goes to special districts (always get a fuzzy answer here).
Finally $1019 or a whopping 9% goes to the City of San Jose to pay for police, fire, road paving, street lights, libraries, parks, community centers, code enforcement, planning staff, school crossing guards and even 3 golf courses.
What do you think about the City of San Jose increasing fees and then paying more for services then is needed?
I would ask all those council members who voted to pay the workers MORE THAN THEY WERE ASKING FOR to pay it out of their pockets, not mine.
JMO #1,
I second your motion. Let them use the money they’ve saved by hiring cheap, illegal aliens to mow their lawns.
A peak into the abyss…
All of you tolerant progressives should thank the councilman for the huge portion of his annual $11,000 tax bill that goes to the education, health care, legal aid, and policing of our illegal immigrant community. I sincerely hope that our taxes-without-borders policy someday results in all of you learning first hand that, yes, those compassionate liberal politicians really will tax you right out of your homes.
You clearly don’t mind subsidizing your parents, and some day you will inherit their subsidized position, and your neighbors will have the privilege of subsidizing you. And they will subsidize you as a landlord when you rent out your current home. What a deal! Well, at least it is a great sweet free lunch for those on the right side of the curve.
Unfortunately, it is completely inconsistent with the notion that we’re all created equal, and the notion that one ought to pay for what one receives from one’s community.
Prop 13 has led to exactly the opposite of what you describe: elderly couples and singles in family-sized single family homes, and young families either in small condos or rentals at a major distance from their jobs.
I’m glad to hear that those protected by Prop 13 are at least asked to pay their fair share of a few of the supplementary expenses, instead of asking the younger folks and new arrivers in the community to subsidize them on those, too. Talk about adding insult to injury!
Without Prop 13, there would be demand for housing that would meet the needs of seniors for homes of suitable size, with the amenities they need. As it is, they stay in homes too large for their needs, too large to clean, to heat, to cool, to maintain, to navigate around in. And the flip side is that it drives down the normal turnover of family-sized homes, and drives up the price of same, making it increasingly impossible for young families to afford housing without paying out larger and larger share of their income to buy out seniors who didn’t create the land value anyway! Can we find a larger-caliber weapon with which to shoot ourselves in the foot?
California has about the 4th lowest homeownership rate in the US—~55% versus perhaps 68%, last time I looked. BUT its seniors, protected by Prop 13, have a higher homeownership rate than their counterparts in the remainder of the US!! You, individually, as a future heir, should love this. You as a community member and a human being ought to be looking for better answers that treat everyone equally and balance the needs of our children against the wants of our landholders, who have been privileged with subsidies from the very large group of tenants and less-favored landholders (the young, the new arrivers, those who take jobs too far away to commute to).
On the subject of tax bills, how much does Chuck Reed pay for the Reed Compound?
Pierluigi,
Sorry to change the subject, although this does have to do with how our property taxes are spent, but this made my blood boil when I read this SJ Mercury article. Our police auditor, Barbara Attard, is traveling to Africa on taxpayer money, to provide “advice” on police oversight. To your credit the article said you were against this. She makes $160,000 a year plus full benefits for doing very, very little and she is now going to Africa on our dime for something that has absolutely nothing to do with city business. This does not count the cost of her staff or office. http://www.mercurynews.com/breakingnews/ci_10512556
#6 – Read more closely. All expenses related to travel are paid by the organization running the meeting. The only cost to taxpayers is the salary that Barbara Attard has during the time she is traveling. The trip is related to her work, but only peripherally, so the controversy is over whether she should take personal time or time without pay to offer training in Nigeria based on her experiences in San Jose.
Well, probably I would say to pay the guards a “living wage”, but I appreciate the way you’ve raised and explained the issue. People get up and go to work and do all sorts of things every day without appreciating how their lives are full of these hidden trade-offs. The other day I listened to Rod Diridon speak about why we should vote for the high-speed rail. The only part of the world that matters to him is what’s in his box.
#7 “Read more closely”
Like I said, the “San Jose” police auditor is traveling to Africa on our dime for something that has nothing to do with San Jose business. We are paying her salary while she is there for a week, that with her benefits is around $4,000. We, the citizens of San Jose, get nothing out of this. If Attard wants to get in the business of consulting other countries, she should quit her position with San Jose. This is nothing more than a self serving trip for her, and we get the bill. Where is it included in her job description that traveling to other countries to provide advice is permitted? It is total bullshit.
LVTfan’s take on Prop 13 is remarkably twisted. American citizens, regardless of whether they earn income, own property, or inherit wealth, are human beings—not taxable units of equal potential on a government accounting ledger. If they were, then you could take any 10,000 of them, total their tax payments, then divide that number by 10,000 and arrive at their individual tax contribution. But you can’t do that—not even close, and until the day that you can there is no such thing as one taxpayer subsidizing another.
Your neighbor is not your enemy, the government is.
Mr Perry,
Residential development in the communities you cite has been directed not by greedy Prop 13 home owners but by class-conscious segregationists (Saratoga and Palo Alto) and, in the case of Santa Clara, shrewd, self-centered management. These strategies were obvious and in place prior to 1978, as was San Jose’s own plan (though in the thirty years since Prop 13 SJ’s population has nonetheless grown by about 300,000 people—about 50%). In that time the county has added about half a million people—hardly evidence of stagnant or suppressed growth.
The speed of the commercial growth you cite is evidence of a once-booming economy, not a plot to raise home prices. In fact, remove the 30 years of commercial expansion and home prices here would be much more affordable—for those lucky few able to find a place to work.
Demonizing Prop 13 owners may feel good to home buyers frustrated by high prices but that doesn’t make it fair. Home prices in this valley were challenging even before Prop 13, which, lest we forget, was itself a reaction to rapidly escalating home prices. Area homes in the five years prior to Prop 13 had doubled in price at least once (this, on top of previous doubling). An $18,000 home in 1968 probably sold for between sixty and eighty thousand ten years later.
Finally, if prohibitively high home prices are the work of Prop 13 owners, will someone please explain how and why those greedy old bastards engineered the recent tumble in the real estate market?
Pierluigi,
Can you propose cutting the IT staff salary to a “Living Wage?” It has been over a year since the IT department promised to fix problems accessing the Customer Service Online pages on San Jose’s web site (port 8443 instead of 443). What is taking so long to make a 5 minute fix?
Since when do we finish building a public project, THEN think about the overall cost of operation? If the city didn’t think about this back then, they did a poor job of project estimation.
Despite this, I’m with you and against you, Pierluigi. You have a very good attitude about ‘paying for it now’ and ‘each our fair share,’ though you know how I and many others feel about the discrimination behind Proposition 13 and other majoritarian methods of distributing our tax burden.
I won’t argue against any of that today. Instead, I’d like to make a pledge. To all of the grade schoolers, toddlers, and children as-yet born:
My generation, so long as we are able, promise not to saddle you with debt and obligation the way our parents have over the last fifty years. We will not shift our burdens, our structural deficits, our secondary chemical reactions, and our property tax burdens onto the young, the innocent, the non-voting. We have the ability to think about the long term effects of our actions—on ourselves and others—and we intend to exercise this ability.
History will judge us all.
Mr Mongler,
If you really believe that the rise in property values is due to the anti-development efforts of Prop 13 home owners, I suggest you take a look at a current map of this valley and compare it with a pre-Prop 13 map. What you will not see is any evidence of suppressed development—and if it isn’t there on the damn map then it doesn’t exist.
Find something else to blame for the high prices (that can be found in many places outside of California), but make sure to go easy on yourself and keep your demons politically correct.
Finfan- No evidence of suppressed residential development? Look at aerial photography if you can’t get the idea from a map. The areas that have grown and changed the most are almost all commercial areas. Residential growth has been much slower.
Compare Saratoga in 1978 to Saratoga today. Or Palo Alto. Or Santa Clara. Where is the rampant development you allude to?
This is why incoming freeways are clogged.
Residential growth has been slower than office space growth. We now import 200,000 workers per day from outside the county. We didn’t in 1978. This drives up home prices- at least short term.
Long term, businesses leave the area, and balance is restored. It’s just a painful way to get there.
Prison Guards Union politically lobbied Gray Davis and Legislature to state wide increase Prison Guard salaries by 30% and increase previous very generous government pensions to budget breaking unrealistic 90% pensions
Local governments then matched unrealistic high government salaries, pensions and benefits and legally locked increases into local government labor contracts
Unrealistic government salary, benefits and pensions are major cause of California and city budget problem’s and Vallejo’s bankruptcy
Are our existing taxes being properly spent for government services?
Do you think government should spend b/millions taxes to enrich politically connected special interest groups and private companies when it means we do not fund expected government services?
Do you trust government will spend any new taxes as promised for public good not more political paybacks or increased private profits?
If you answered NO, then vote NO on ALL new taxes until government spend your taxes for public benefit
#4 You are exactly right.
Proposition 13 gives homeowners every incentive to fight all development and let property values spin out of control. For its recipients, its free money. For someone like myself, who has just entered the housing market, not only am I subject to these inflated housing values, but I am forced to pay taxes on the full value of my property.
Continue to blame it on government spending or those darn illegal immigrants, but the hard reality is the generation that championed Proposition 13 has voted to pass the taxing burden on to someone else, and sold my generation out.
I probably shouldn’t ask questions when i’m tired and have a head cold but again I’m not going to listen to myself.
OK am I looking at this the wrong way? We are paying 6 times more to run a school district ($6570) then we do to run the 10th or 11th largest city in america ($1019)? That can’t be right can it?
#18
JJ,
No worries on the question.
There are different revenue streams for cities, counties and school districts.
Yes the local school district gets the bulk of property tax revenues in California. However school districts do not have revenue streams from sales tax like counties and cities do for example.
Perhaps as an interim fix, the IT department of the City of San Jose should prominently post this message on the City’s home page;
“Abandon All Hope, Ye Who Enter Here.”
Schools get 55% of property tax revenues and have duplicate and high administrative costs
San Jose has 17 school districts with 17 Boards, 17 Superintendents, 17 offices, and 17 administrative departments while most cities have 1 unified school district
Consolidating 17 schools districts and 17 administrative staffs could save millions taxes and saved taxes could be better spent on classroom instruction and teachers
#20
Rabbi,
I have been very fortunate to grow up in a family that taught me to save money. I look forward to paying my home off over 30 years.
It takes a lot of “chutzpah” to be fortunate enough to afford a million dollar house and then complain about how much a security guard or janitor makes. Amazing…..
Thank you for the informative breakdown of the dollar distribution of OUR propery taxes.
Ok, what do I see … I see new spongy football fields, new spongy tracks, new massive silver poles holding the new lights, new fences and new gates. AND on those gates, I see new LOCKs. It’s ok, I can pay $5.00 if I want to go sit inside and look at the new spongy field or new spongy track.
Or I can drive home to hear those little pebbles hit the bottom of my car as dust flies from the back of my car on a road I could swear is not finished but the city says it is … Try bringing your garbage can out to the street in your bare feet ! Ouch !
Conclusion:
With the economic struggles of today, the reality is setting in that WHERE the government spends the money is extremely important.
Also, as individuals feel the real life lose of a property or a retirement fund this could lead to cutting corners, which could lead to breaking our laws. It is important that we maintain, even increase, our law-inforcement structure during this extremely vulnerable time.
Question : Ok, we spend alot on schools.
Which breaks down to an amount for each student. …
In San Jose, talking about the providers (parents, guardians) of each student, does everyone of these providers pay property taxes ?
How does this work ?
Thank you.
Clarification:
This weekend I ran into John Gibbs who works for Supervisor Don Gage. John lives in a Townhouse. He let me know that San Jose extended the single family home price on sewer sanitation/storm fee ($395.64)to townhouses in July 2008. So to clarify zero lot condominiums and apartments pay the lower price ($223.68).