Friday, May 14, 2004
Page 7
CALIFORNIA COMMENTARY (Column)
Parcel Taxes Add to the Homeowner’s Burden
By JON COUPAL
(The writer is an attorney and president of the Howard Jarvis Taxpayers Association.)
The use of parcel taxes to get around Proposition 13’s limitation on property tax increases is accelerating and taxpayers throughout the state are beginning to feel the pinch. The large number of parcel tax elections in the last two years shows that efforts to impose this unique form of property tax are at an all time high.
Government entities have been obsessed with circumventing Proposition 13 ever since it was approved by voters in 1978. For years, lawyers on the public payroll worked on creating ever larger loopholes by using fees and assessments on property to wring more from homeowners.
After the Howard Jarvis Taxpayers Association authored Proposition 218, the Right to Vote on Taxes Act, which was overwhelmingly approved by voters in 1996, the “fee and assessment” abuses were significantly curtailed (although they did not disappear completely). Tax raisers were forced to look for new methods to undermine Proposition 13.
Now, the weapon of choice for the local tax-and-spend crowd is the parcel tax.
Traditional property taxes are imposed as a percentage of value. Since Proposition 13 imposes a rate limit of one percent, the only way parcel taxes can get around this limit is by levying a fixed amount on each parcel of property.
Parcel taxes are especially unfair to homeowners in that in most jurisdictions some 80 to 90 percent of the tax burden falls on single-family residential parcels. It is not uncommon for these taxes to be in the triple digits, and the taxes paid are in addition to all of the other levies that appear on the property tax bill.
Officials seem to have fallen in love with parcel taxes because, unlike bonds which must be used for structural or capital improvements, the proceeds of parcel taxes can be used for ongoing operating expenses—especially salaries.
The only limit on parcel taxes is that, thanks to Propositions 13 and 218, they require a two-thirds vote. Nonetheless, they are often easier to pass than one might think. Because not everyone owns property, renters are frequently the deciding factor even though they do not have a direct stake in the outcome.
Additionally, there is an increasing trend toward putting parcel tax measures on special election ballots when voter turnout is low. Agencies supporting these taxes, with the help of highly paid consultants, have become adept at getting their supporters out to vote in these elections that otherwise receive little public attention.
Thus, there has been a significant spike in the number of school parcel tax elections over the past year. March 2004 had 20 local school parcel tax elections, setting a new record. (June of 2003 saw 19 measures on the ballot).
Of the 20 measures on the March 2004 ballot, 9 of the measures ended up passing with a two-thirds vote, corresponding to a pass rate of 45%.
The pass rate varied significantly based on the prior tax history of the district. Of the 3 districts that had previously passed at least one parcel tax, all 3 of those measures passed—a 100% pass rate. Of the 5 districts that had previously attempted but never passed a parcel tax, 2 of those measures passed, a pass rate of 40%. Of the 12 districts that were attempting a school parcel tax for the first time, 4 of those measures passed for a 33% pass rate.
These figures show that once a local school parcel tax passes the first time, it is much easier to renew and, for all practical purposes, becomes permanent.
In April, three more parcel taxes were on the ballot and two out of three passed. The exception was in the Lake Tahoe Unified School District where there was significant opposition generated by school officials’ greed.
It seems that they structured their parcel tax measure in such a way that the owners of condominium time shares—those who are visitors to the community for a month or less each year, and are unlikely to have any children in school—would have been compelled to pay the same as full time residents.
Although parcel taxes are not limited to school district use, the exceptional avarice of the Tahoe school district provides a warning of the lengths to which officials are willing to go to get their hands on more of the homeowner’s money.
Parcel taxes are a real threat to housing affordability and the well-being of taxpayers. The increasing rate of abuse with this form of taxation has moved parcel taxes higher on the list of issues needing reform.
Copyright 2004, Metropolitan News Company