Letter: Time to reform Proposition 13 Schools & Kids, posted by Editor, The Almanac Online, on Mar 6, 2012 at 8:55 pm
How ironic that Silicon Valley, the very center of innovation and creativity envied the world over, is saddled with California's outmoded form of taxation that rewards the status quo and punishes originality.
Read the full story here Web Link posted Wednesday, March 7, 2012, 12:00 AM
Posted by HighTech Maven, a resident of the Menlo Park: Allied Arts/Stanford Park neighborhood, on Mar 6, 2012 at 8:55 pm
Not only does Prop 13 discourage companies from settling or expanding in California -- it makes it harder to attract employees. Who wants to move for a job and double their property tax payment? Who wants to be forced to spend $30,000 a year on private schools for their kids?
It's time for Google, Facebook, Yahoo, Apple and other dynamic companies to step forward and say, 'enough!' Property taxes pay for the services we all (companies and residents) touch every day -- entitlements to a free ride need to be thoughtfully granted.
Instead, we just hear mouthpieces for real-estate investors screaming, "Just stop spending!" It's a lot like a guy telling you, "well, buy rib eye instead of filet mignon" -- since all he's paying for is ground chuck.
Posted by MenloFamilyMan, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 7, 2012 at 11:12 am
Completely equitable and fair is very hard to do. This discussion has been going on for a long time. I have not heard (or thought of) a proposal that makes it more fair for the general population without re-inflicting the harm Prop 13 was originally intended to relieve. If we can't be equitable, at least we can as a society protect the vulnerable.
Those who were around when Prop 13 were voted in recall that property appreciation combined with nothing to curb local government spending created a situation that was really unfair to a group of homeowners that were often helpless and unable to save their homes or stay afloat financially - those retired and living on a fixed income in the home they bought and expected to house them in their old age. Given a fixed (and often reduced) income, rising property taxes threatened to boot the retired out of homes they had paid for and sunk their life savings in.
Price appreciation is a double-edged sword - good for those whose assets appreciate but, as one CFO I worked with said, "I want my kids to be able to buy a home in this community". Prop 13 provided some insulation against the growing tax burden that directly resulted from appreciation. Equitable? No. Fair to a group that is often the least able to absorb the rising cost? Yes.
The multiplier effect was that as cities and counties wanted to increase their budgets there was little that the group most impacted could do to prevent the increase of tax rates and fees. Prop 13 addressed that.
Now, am I happy that about 4 families on my street are paying more property taxes than the other 12 combined? Absolutely not. I also don't like it that it creates exclusive neighborhoods of the wealthy. Some folks like the social isolation, but I don't think it is a good thing.
My question is: do any of you criticizing Prop 13 have an alternative to propose that does not result in the retired being forced out of their family home, or having their circumstances greatly reduced because their property tax bill grows to be a higher percentage of expense in retirement than their mortgage was when they were still working?
And sure there are the very wealthy among us that can afford increased property taxes without blinking. Most of us are not. Let's make sure we design a system that works for the majority, not a tiny minority.
Posted by Debra, a resident of the Menlo Park: Linfield Oaks neighborhood, on Mar 7, 2012 at 11:45 am
"My question is: do any of you criticizing Prop 13 have an alternative to propose"
Yes, leave the residential portion the same and revisit the massive tax breaks to commercial landowners that make California inherently unfair for new businesses.
Remove the sections of Prop 13 that keep commercial property from being reassessed.
As has been outlined in most forums that get into any depth on the commercial side of prop 13:
Prior to Prop 13, commercial property accounted for 60% with residential accounting for 40% of the property tax burden. It has since pulled a Romney and flipflopped to 60% residential and 40% commercial.
Where is the inherent fairness in moving the burden over to residential property owners from the largest commercial property landowners in the state?
Posted by REALITYBITE, a resident of another community, on Mar 7, 2012 at 12:21 pm
Most of you who oppose Proposition 13 act as if they want to turn the Peninsula into a world for the rich only.
The richest person on the Peninsula, is not only pro proposition 13 and doesn't mind paying, out of her billions, higher taxes because she HAS the ability just like all you rich gripers.
She also is determined to get education for illegals who qualify and set up housing and grants and scholarships, in order to prevent this class war.
If you do not have a mansion in Woodside or Hillsborough, you may just be seeing a more American way of life and who wants factories and businesses ruining your lovely views anyway?
Removing prop. 13 will only make this area desirable for those who wish to make money as their sole mission in life and all that does is bring in greed and more attorneys who will bring in more corruption.
Most of the aging population will pass it on to their progeny who mostly lost their investments and will end up not selling the land and move out of this artificial atmosphere of greed.
Posted by David B, a resident of the Portola Valley: Central Portola Valley neighborhood, on Mar 7, 2012 at 12:25 pm
Debra, you somehow imply that those mean nasty commercial landowners will simply absorb their increased taxes and solve all the state's budget problems. Have you considered that you as a customer will be paying that bill? Landlords will pass their increased taxes on to their tenants, who will have to raise prices on their products and services.
"The people" of California have to figure out how to pay for our state government. Whether through sales, or income, or property, or any other taxes, we have to pay the bill. And there's no magic "someone else" to pay it for us.
Posted by Debra, a resident of the Menlo Park: Linfield Oaks neighborhood, on Mar 7, 2012 at 12:31 pm
David B "Have you considered that you as a customer will be paying that bill?"
Any evidence that they've reduced what they charge as their percentage of the tax burden lessened over the years?
You also did not address the fairness issue of moving the burden to residential owners: "Where is the inherent fairness in moving the burden over to residential property owners from the largest commercial property landowners in the state?"
Posted by Member, a resident of the Atherton: West Atherton neighborhood, on Mar 7, 2012 at 12:47 pm
Prop 13 keeps control away from the politicians who only know how to spend there way out of a situation, why not cut spending. We own a home on the East Coast and the politician’s just re-asses anytime they need more money, to bad for the older people on fixed incomes, it does force them to move.
Posted by Steve, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 7, 2012 at 1:05 pm
This is a good & necessary discussion. I realized I knew little about Prop 13 so went to Wikipedia Web Link and found the following information:
Proposition 13 contributes to an inefficient housing market because it provides disincentives for selling property in favor of remaining at the current property and modifying or transferring to family members to avoid a new, higher assessment.
California has more rigidity and friction in both its housing market and in renting than other states; one study comparing California's market to that of other states found that between 1970 and 2000, tenure of owned homes increased by 10% and in renting by 19%, and attributed this change to Proposition 13.
Local governments now use imaginative strategies to maintain or increase revenue due to Proposition 13 and the state's attendant loss of property tax revenue (which formerly went to cities and counties).
Most California localities have recently sought their voters' approval for special assessments . . . for services that used to be paid for entirely or partially from property taxes: streets, water, sewer, electricity, infrastructure, schools, parks, police protection, firefighting units, and penitentiary facilities.
Cities and localities have become more dependent on state funds, which has increased state power over local towns and cities.
Local governments have become more dependent on sales taxes for funds, which some maintain has resulted in poor land planning, and has made cities encourage more retail stores and "big box" outlets. Sales tax rates have increased from 6% (pre-Prop 13 level) to 8.25% and more.
Posted by Steve, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 7, 2012 at 1:28 pm
Earlier MenloFamilyMan asked if anyone had a solution to the problem was intended to fix: that of an elderly person on a fixed income who couldn't afford the increased property taxes as property values zoomed upwards beginning in the 1970's.
One option that wasn't available in the 1970's that would help if Prop 13 were to be overturned is the REVERSE MORTGAGE. As the value of the property increased the amount the elderly owner could receive in a reverse mortgage would also increase. If they limited the mortgage they took out to just enough to pay their property taxes, they'd retain full equity that could then be passed along to their children, less the cost of interest & fees.
Thus for a small cost, the scourge of Prop 13 could be eliminated without forcing elderly homeowners to sell to meet their taxes. And in the meantime, their children would have been much more able to afford to buy their own homes since they wouldn't be burdened with excessive property taxes that Prop 13 currently imposes on them.
Posted by w patterson, a resident of the Menlo Park: Sharon Heights neighborhood, on Mar 7, 2012 at 1:43 pm
The turn over in property has been significant over the past several years. This market dynamic provides for a new market value and subsequent increase in property taxes. For those that are now seniors, let them enjoy the benefit of long term ownership. They no longer can afford an adjusted property tax bill.
Less we forget, values declined and the assessor lowered all property values reflecting the 3 year decline and prior declines in the 90's. Government has taxed and enforced fees which have cause the bloating of salaries, pension benefits and created a horrific burden on the citizens. Frankly, the extraction of property taxes has no public benefit if misused and placed in the beauracrates greedy hands. The shift of citizen funds to government is creating a new wealthy class of government employees.
Posted by Steve, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 7, 2012 at 2:01 pm
You wrote: "For those that are now seniors, let them enjoy the benefit of long term ownership. They no longer can afford an adjusted property tax bill."
They could afford an increased property tax bill if they took out a Reverse Mortgage based on the equity in their property that has likely at least quadrupled in the time they owned it. Then when they died or sold, the bank would be paid back with no money out of their pockets, other than interest & fees. It seems a reasonable solution that wasn't available in 1979 when Prop 13 was passed. If it had been, Prop 13 likely would not have been needed and our governments - state & local - wouldn't have been so starved for necessary funding. And our schools, which were among the best in the country in 1979, wouldn't have slipped to 48th place, among other things.
As for your comment "The shift of citizen funds to government is creating a new wealthy class of government employees", do you have any references to support this statement?
I know from public records that the number of employees employed by Menlo Park is almost exactly the same today as it was 11 years ago. And as I understand it, these employees have been working under a salary freeze for the past couple years while having to increase their contributions to their retirement fund (ie. a net decrease in real dollars). I know several city employees personally, none of whom could be described as wealthy, especially in a community like this where wealthy folks abound.
It's fashionable to dump on public employees these days (they're just bureaucrats right?) but from what I've seen & read, it's not fair.
Posted by Ron, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 7, 2012 at 2:10 pm
Prop 13 was passed to limit the spending of local governments. At that time the headlines would read "tax rate lowered X%", what was not said was that assessed values were increased at a greater percent resulting in continuing increases in tax revenues that supported increased governmental spending. Officials were elected who claimed that they would reign in spending but never delivered. An outraged citizenry passed prop 13 to limit the amount available to spend. Until our elected officials have the discipline to provide citizenry only with the services that they can not provide themselves, and provide them on a long-term cost-effective basis, the only recourse we have to limit spending is to limit what these free-spenders have to spend.
Posted by Keep 13, a resident of the Menlo Park: Felton Gables neighborhood, on Mar 7, 2012 at 3:07 pm
Keep 13...for seniors. Kind of like with the school parcel taxes, where they can ask for an exemption. That way, grandma gets to stay in her house and the greedy corporations have to pay their share. Problem solved.
Posted by gunste, a resident of the Portola Valley: Ladera neighborhood, on Mar 7, 2012 at 4:23 pm
Prop 13 was needed to keep politicians from just increasing property taxes to pay for their favored projects. Its failure was when their proponents exempted commercial properties and allowed a system of selling commercial sites without reassessment. Individual homes would sell on and eventually be reassessed. It prevented long time residents from being forced to give up their homes because of tax increases.
My home has increased in value during the 42 years I have lived in it. I could afford it then, could never manage it now. Inflation takes its toll without increasing incomes proportionally.
Prop 13 proponents had commercial real estate interests and convinced the general public to fix things for their own benefit.
The solution: Change the provisions that protect commercial property sales from being being exempt under any condition.
Posted by w patterson, a resident of the Menlo Park: Sharon Heights neighborhood, on Mar 7, 2012 at 6:10 pm
$407,000.00 to a PA police officer. Please review the salary structure of the fire department and law enforcement. Surely you must recognize the transfer of wealth from us and our young people who perhaps make a $100,000.00 with BS and MBA from Yale. Think about it. High school graduate works for MPFD at $130,000.00. Wow,
something is very wrong here. God bless those young workers who struggle to get there degrees and contibute to society while public employee unions with low barrier to entry steal from those young folks.
Posted by Marcy Magatelli, a resident of the Menlo Park: Downtown neighborhood, on Mar 7, 2012 at 7:02 pm
Debra has it right, separate the commerical from the residencial. When Prop. 13 was passed, it was intended to protect people, yes some elderly, who were getting 'taxed out of their life-long homes, once they were on a fixed income and Calif.'s taxes kept going up & up. I don't think anyone who voted for it, realized what a boon it was going to be for big, commerical land owners.(not all of whom are big, bad commercial land holders, Mr. Dave B.!)Take, for example the old Co-Op Store, on Menlo Ave. I was told that it passes, from generation to generation, within a family trust, who don't even live in Calif. but I am sure that, regardless of the tax burden, the owners always seek the maximum in lease negotiations and Trader Joe's always hopes to negotiate it down to as low as they possibly can. Neither thinking one bit about the taxes! Meanwhile, we're left holding the empty bag. Business is BUSINESS! Individual, homeownership was not always an option to everyone, until after the "wars". Now, we think it should be, along with a good, free education. The middle class is disappearing again, and if you think it's a good idea to have a middle class, then home ownership and education are absolute cornerstones in that society. The more one has, the more they should try to elevate others in their community! "A rising tide lifts all boats"
Posted by narnia, a resident of the Menlo Park: Sharon Heights neighborhood, on Mar 7, 2012 at 7:59 pm
What about renters who would be paying through the roof (no pun intended) if commercial properties are exempt from Prop 13's effects? Why on earth should somebody who had enough money to buy a place to live benefit more that those who rent? Either Prop 13 is for all or for none....and that's fair.
Posted by Debra, a resident of the Menlo Park: Linfield Oaks neighborhood, on Mar 8, 2012 at 10:11 am
"What about renters who would be paying through the roof (no pun intended) if commercial properties are exempt from Prop 13's effects?"
What is the difference in rent at apartments in buildings that have been owned by 1 owner for 40 years and a building that transferred ownership last year and was reassessed?
Not much. The market will set the price for similar 2 bedroom apartments. The one with the lower tax burden is immensely more profitable. Put that in a business setting and you see how it hinders businesses that wish to relocate in California.
Throw in the myriad of ways that Prop 13 loopholes let businesses transfer without reassessment and that's whee you get the shift from 60/40 to 40/60.
I asked before - can anyone document how the savings have been passed on to renters thus far?
Can you show me cheaper rent on a building that has not transferred in 40 years vs a recent transfer? 2 apartments, both for rent now, the massive difference that you discussed - "through the roof"
No. The owners are using current market rates, not giving discounts out of the goodness of their hearts. Pocketing the profit and letting others pay their fair share of property taxes to keep California great.
Posted by Curious, a resident of another community, on Mar 8, 2012 at 12:33 pm
This converation was had about a year ago wasn't it? I still believe that keeping prop 13 for current homeowners is fine. No one wants to kick seniors out of their home for rising tax rates.
For Commercial and inherited properties though, that is another story. Like many have mentioned, some of the commercial properties have property tax rates from over 40 years ago. When you throw in the inheritance part as well, why would anyone want to sell their parent's house in Menlo Park when they could just lease it longterm and collect the payments for years.
Like several have also mentioned, these property owners for business/rentals are not discounting their rent because they have a low property tax, they are just pocketing more than their neighbor is.
Posted by DC McGlynn, a resident of the Menlo Park: Linfield Oaks neighborhood, on Mar 8, 2012 at 12:57 pm
The most blatant abuse of Prop 13 in Menlo Park is the landlord of the Trader Joe's building .. they live in a leafy street on Cape Cod, MA and pay a pittance in property tax ! I am sure they charge a premium rent to TJ Inc. and benefit from the prosperity of Menlo Park while laughing all the way to the bank !
Since when did a private sector employee get to cash out SO much vacation pay .. its obscene, immoral, unethical and plain wrong .. Most cops and firefighters spend their days sitting around planning their next 'days off' (I know for a fact !)
Posted by Scholar, a resident of the Menlo Park: Sharon Heights neighborhood, on Mar 8, 2012 at 2:07 pm
Keep Prop 13 intact. No more tax increases! Resist it! Let those who want higher taxes donate their own money now, let them send their personal checks to their local city hall. I'm sure it will go to good use, like straight into some retiree's pension payment.
Posted by POGO, a resident of the Woodside: other neighborhood, on Mar 8, 2012 at 2:19 pm
You undermine the arguments in favor of Prop 13 reform when you invoke the performance of our public schools.
Argue reform on its merits. Is it fair or not?
I remember the reasons Prop 13 was so popular when it passed by a near 2 to 1 margin the late 1970's. Families who had purchased their homes for $50,000 were paying $500 in property taxes. With California's frothy real estate market, they were reassessed to market, perhaps at $300,000, and they simply couldn't afford to pay $3,000 in taxes. What do you tell these people? That's a legitimate concern.
And be careful of unintended consequences. In the event property values fall, so will those tax revenues.
Posted by Inequity, a resident of the Woodside: other neighborhood, on Mar 8, 2012 at 3:06 pm
Those with an agenda that favors Prop 13 are quick to point out the inherent unfairness of tying property taxes to home valuations when the market is rapidly escalating. Ok, fine but those same advocates pretend that there is no reasonable middle ground between Prop 13's 2% or less increase and wholesale market based price escalation increases.
The fact is that every year that inflation increases government budgets beyond 2%, existing property owners are inherently shifting the burden of that inflation based increase to new owners entering the market. This inequity could easily be corrected by limiting the tax increase to no more than the CPI in a given year rather than the number 2% which happens to be an arbitrary (but happy number for existing owners).
Secondly, the issue of residential property truly is a red-herring designed to distract from the free ride that commercial owners are getting. At least with a residential property, one might reasonably anticipate a sale of the property once once or more per generation.
But today we have a situation in which commercial owners have assigned the ownership of their property to a corporation. And although the ownership of shares in the corporation might change hands on an annual basis, the actual legal entity does not ever change nor will it ever change. The result plain and simply results in an ever increasing percentage of the tax burden being shifted other forms of taxation (such as personal income tax or sales taxes).
The positive elements of Prop 13 can be retained without throwing the baby out with the bath water.
Of course those who control the commercial real estate in this state will have some other thoughts on that....
Posted by POGO, a resident of the Woodside: other neighborhood, on Mar 8, 2012 at 9:00 pm
I still say beware of unintended consequences... especially misuse by our legislature - which I think bears the majority of the blame for California's mess.
Remember when CALPers said that it would be no problem to raise the pension multipler to 3.0? What about that high speed rail that would be so popular, cost $35 billion and go fast? How about all those temporary taxes that never sunset? Or tolls on bridges that will expire when they're paid off? How about all that lottery money that will go to schools?
These examples were just off the top of my head.
Yes, we need more taxes - not enough lottery winners getting food stamps.
Posted by Starry-Eyed Optimist, a resident of the Menlo Park: Sharon Heights neighborhood, on Mar 9, 2012 at 3:40 pm
Kudos to "Curious," you have recapped the previous extensive discussions on this issue perfectly, boiling out the rancid, heated, special-interest rhetoric and reducing the recommendation to the common sense conclusion any honest observer would arrive at:
"This converation was had about a year ago wasn't it? I still believe that keeping prop 13 for current homeowners is fine. No one wants to kick seniors out of their home for rising tax rates.
For Commercial and inherited properties though, that is another story. Like many have mentioned, some of the commercial properties have property tax rates from over 40 years ago. When you throw in the inheritance part as well, why would anyone want to sell their parent's house in Menlo Park when they could just lease it longterm and collect the payments for years.
Like several have also mentioned, these property owners for business/rentals are not discounting their rent because they have a low property tax, they are just pocketing more than their neighbor is."
Posted by Norman, a resident of the Menlo Park: other neighborhood, on Mar 9, 2012 at 5:21 pm
Lest we forget Prop 13 was put into place because local taxing agencies were willy-nilly raising taxes because they could. People would know about the increases when they got their annual tax bill. This especially hurt retirees who had no added income to pay these taxes.
The state legislature had a few chances to remedy this situation but they either refused or there was gridlock. In any event our elected representives could not pass any legislation frustrating almost all Californians. In stepped Gann and Jarvis with Prop 13. This was a bill that the people voted on at the time. The vote was a wallopping 65% to 35%. The five tax increase props that Schwarzennegger tried to finess by Calif voters lost by this same margin. So complain all you want to about the inequities of Prop 13, which there are, but voters will not pass it. They know that if they do they will be now subject to the willy-nilly increases in taxes that California pols, Democratic all I'll say, want to foist on the citizens.
The current misgoverning that is going on is reminiscent of 1975, Prop 13's time. They want more money. What else is new? They want to build that stupid High Speed Railway which everyone knows will be a huge deficit producer, still they go on.
In California we vote social causes but we don't trust these same people on economic matters. Just look at High Speed Rail to see how frivolous they can be with our money to say nothing of how they take money from the unions and give them huge benefits that we have to pay for. No, our pols do not represent us on these types of issues.
Posted by Linni Kennedy, a resident of the Menlo Park: The Willows neighborhood, on Mar 10, 2012 at 9:43 am
I had children in school in Cupertino when Prop 13 passed. What a sad day it was. My children and I got to witness the decline in their schools first hand. I think they began to feel that kids were not important to their state. When one of my sons went to interview at Northwestern, his interviewer could not believe that there were no guidance counselors at his high school.
I recall that then Governor Jerry Brown had proposed a solution to the high property tax
rates for seniors, but by then the "Jarvis Gann " fervor had taken hold and so now, 34 years later, my grandchildren go to school in a state which still ranks near the bottom of the entire country.
Posted by Chris, a resident of another community, on Mar 10, 2012 at 4:43 pm
The words "Cherry Picking" come to mind when you state ONLY the negatives on Prop 13 from Wikipedia. TO BE FAIR, here are the Wikipedia positives for Prop 13 that YOU conveniently left out...
Advocates argue that Proposition 13 has provided predictability for property owners, and increased community stability. They argue that, while progressive income tax structures affect higher incomes, property taxes take a higher percentage of lower incomes, for those people who own a highly valued property but have lower incomes. It is pointed out that state income tax and sales tax were started during the Great Depression, when taxpayer resistance began due to property taxes that unemployed workers could not pay. According to the Center for Governmental Analysis, between fiscal years 2000 and 2005 property tax revenue has increased 22.11%, while personal income per capita has increased 13.80% and general per capita revenue 21.93%.
Estimates are that Proposition 13 has saved California taxpaying citizens over $528 billion (value retrieved 5/31/2009).
Other groups, such as the California Taxpayers Association, citing "The Future of Proposition 13 in California," California Policy Seminar, March 1993, University of California, authored by Arthur O’Sullivan, Terri A. Sexton, and Steven M. Sheffrin, argue that the tax is progressive, and that acquisition-value assessments seem to provide property tax equity.
Advocates of Proposition 13 argue that the restriction of tax increases for previously owned property has decreased the volatility of funding for municipalities. They claim that pre-Proposition 13 property tax revenue was almost three times as volatile.
During 2009, the State Board of Equalization noted that only five times since the passage of Proposition 13 was the annual increase less than the permitted 2%, and that the estimated adjustment for 2010 would be negative, for the first time since the passage of Proposition 13.
David Doerr argues that the "acquisition value system" acts as a control to overspending due to high real estate values, while permitting a source of revenue growth in times of recession. Local governments would then have to decrease spending more severely when the housing market decreased.
According to the California Building Industry Association, construction of a median priced house results in a slight positive fiscal impact, as opposed to the position that housing does not "pay its own way". The trade association argues that this is because new homes are assessed at the value when they are first sold. Additionally, due to the higher cost of new homes, the trade association claims that new residents are more affluent and may provide more sales tax revenues and use less social services of the host community.
Proposition 13 remains popular among Californian likely voters, who are mostly homeowners. Among likely voters, 53% described Prop 13 as "mostly a good thing" while 33% responded that it was "mostly a bad thing" in a 2006 Public Policy Institute of California survey. For adults who are not likely voters (mostly renters), Prop 13 was unpopular—- only 29% approval to 47% disapproval. Among California adults, overall approval was 47% approval to 38% disapproval. Periodic newspaper accounts report high voter approval.
Others argue that the real reason for the claimed negative effects is lack of trust for elected officials to spend their money wisely. Business improvement districts are one means where property owners have chosen to tax themselves for additional government services. Property owners find that these targeted taxes are more palatable than general taxes.
Posted by Chris, a resident of another community, on Mar 10, 2012 at 5:22 pm
It totally amazes me that people STILL use this lame argument of cut school funds to attack prop 13.
All my relatives where teachers, one is now a school board member in a major district. His main problem it trying to get RID of bad teachers, since the union protects them. Bad teachers take funds away from hiring new teachers and supplies for schools and the kids. He knows the problem first hand since he WAS a TEACHER for 35 years! Plus teachers are some of the highest on the U.S. retirement charts now. Things are SO out of whack. Teachers now put their platinum plated retirements and benefits WAY ahead of the kids in the classes. This is the MAIN reason why most retired and working teachers are STILL against Prop 13. They want that tax money to keep their fat entitlements rolling in, the kids can lump it! My city has cut critical maintenance and city summer kid programs, expansion, park hours, and cut city staff and outsourced work, since they have to pay the huge entitlements.
I see a lot of city bankruptcies ahead. And it is NOT AT ALL the fault of prop 13. These huge entitlements are NUTS and unsustainable. I and others won't be voting for tax hikes since it will ALL go to prop-up these entitlements that need major trimming. Prop 13 will not be touched since people know what the real problems are. That is a cold hard fact. Gaze at the real problem and solve this first before you go drooling over prop 13...
Posted by Linni Kennedy, a resident of the Menlo Park: The Willows neighborhood, on Mar 12, 2012 at 10:16 am
Dear Chris of another neighborhood,
I am talking about California being at the bottom of all the states in how much it spends per pupil on education.
Hard to tell what you're talking about, although I gather you are very angry at unions, teachers and public servants. I probably share some of your outrage. But these things have all happened while Prop 13 has been in force. So Prop doesn't seem to be the answer.....
Posted by Steve, a resident of the Menlo Park: Central Menlo Park neighborhood, on Mar 12, 2012 at 1:20 pm
You wrote: "It totally amazes me that people STILL use this lame argument of cut school funds to attack prop 13."
What's lame about the statement that California was #1 in education when Prop 13 passed and it's now #48 and on track to displace Alabama & Mississippi at the bottom of the pack? This is what "starving the beast" looks like. Though Prop 13 isn't entirely responsible for the current state of California finances, it started the trend and still contributes much to the underfunding of our state services.
Thanks however for providing the web link to the monthly pension payments to CA teachers, though I have to say that I don't know what you're so upset about - the pensions seem pretty reasonable to me. The range of pension payments is about what I'd expect, given the range of professional accomplishments represented by this group of retired educators. And remember, these payments are mostly not coming from you the taxpayer - they come from the $145 Billion CALSTRS fund which was funded by contributions from the teachers themselves, their school districts, and earnings on the CALSTRS fund investments (25% return in 2011, 12% in 2010).
Yes, because of fund losses in 2008 and 2009, the taxpayer contribution has temporarily increased to cover the current underfunding but this will change if, as looks to be the case, the fund sees a third year of gain at the end of the state fiscal year on June 30. And remember, during the boom years of the late 90's the CALSTRS investment were performing so well that the state contribution was effectively $0 for several years.
The bottom line however wasn't provided in your web link, though it is easy to calculate: the average monthly pension for all our retired state teachers is $3,585, or just over $43,000 per year. This hardly qualifies as an exorbitant retirement, especially when you realize that most teachers don't qualify for Social Security since they paid into a defined benefit plan during their teaching careers.
What platinum plated retirements are you talking about? Your own numbers show that that simply is not the case.
Posted by POGO, a resident of the Woodside: other neighborhood, on Mar 12, 2012 at 5:29 pm
Other states don't have Prop 13 and they seem to be challenged by their finances, too.
In California, we fund a lot of things that other states do not. For instance, we have decided that we want our own EPA and our own FDA. We also just passed our own "cap and trade bill" and our own disability acts which aren't exactly business friendly. Other states say the federal programs are acceptable.
You may like those things, but they sure aren't free.
Posted by MP, a resident of the Menlo Park: Downtown neighborhood, on Mar 12, 2012 at 6:10 pm
Averages can be misleading, and heavily skewed by extremes.
"The average monthly pension for all our retired state teachers is $3,585, or just over $43,000 per year."
That seems to be current retirees, some of which retired decades ago and may receive very little, and others recently retired and may be receiving amounts far, far over $43,000 per year. We don't know. What matters is the future obligation, and how it will be paid for.
I know I will only receive $2-3000 per month from Social Security which will not remotely cover living expenses around here. I also am lucky enough to have a 401k for which I've always contributed the max, which also is unlikely to cover living expenses when I retire (if ever).
Teachers and other public workers should expect some level of pension, but should not expect it to cover retirement in its entirety, as the rest of us are in the same boat. I don't want to fund other people's retirement beyond what I am able to save for myself.
Posted by MP, a resident of the Menlo Park: Downtown neighborhood, on Mar 12, 2012 at 6:15 pm
When it comes to schools and funding, you have to admit it is completely crazy that the MPCSD receives funding for ~17 teachers from the Education Foundation. The budget from the state, city, county needs to be enough to cover the cost of teachers for god's sake. They can't today, even with the extra parcel taxes.
Who thinks that situation is acceptable? Not me.
Thank heavens for the foundation, but I'd rather have their dollars go to 'extra' programs/services, not for teachers, librarians, etc, that are required to run a school at a certain student population.
Posted by Stan, a resident of the Portola Valley: Los Trancos Woods/Vista Verde neighborhood, on Mar 12, 2012 at 6:47 pm
Until spending on the part of government entities returns to some form of sanity any law that acts to keep our money out of the hands of politicians can only be looked at as a good thing. Think about some of the spending decisions that you see all around you every day. Recently for example every local high school suddenly needed a performing arts center. They were popping up like mushrooms in the fall. Everyone of them were going to return profit for their district. The most recent addiction seems to be pedestrian overpasses - more mushrooms. How about solar panels at schools and other public buildings. Still more mushrooms. Oh for sure they are green as the grass in Ireland. But there's probably not a one that returns the capital investment in less than 10 years. That just plain lousy financial decision making.Then there's public employee salaries. Yes they used to be low but not any more and they are bolstered by all but free medical insurance and out of this world costly defined benefit pension plans. These two things were dropped by by private enterprise beginning more than two decades ago. Any actuary that deserves continued employment could see that these things were time bombs. We have governor moonbeam that somehow thinks that we should go ahead and spend 0.1 $trillion on high speed rail. It might be a nice idea if someone could pull a rabbit out of a hat that looked like a workable business plan. And keep in mind that that number really becomes more like 0.2 $trillion when the interest on the bond debt just happens to get tossed into the equation. It goes on and on. Another atrocious decision is the statement to self aggrandizement also known as the self stayed suspension span that is the last quarter mile of the Bay Bridge replacement.This is about a $2 billion extra cost over just continuing the simple structure that makes up the rest of the east span. We have the 2 Browns - Willy and Moonbeam to thank for this one.
These and innumerable other examples of poor planning and poor prioritization of spending decisions just keep on coming from people who should not be trusted with our money.
Flop a few other things into the hat. For example there are a lot of teeth chipped over "we should spend more on eduction." Maybe - but there are significant studies that demonstrate a rather poor correlation between $ per pupil year and educational performance. In fact the best correlation for educational performance is personal wealth of the parents. Yet another argument to not give more of your hard earned money to governments.
Then you can begin to throw in some other problem decisions. Why, for example are we buying performing arts centers and not science labs. We aren't producing enough scientists so we have to turn to China and India to import people who stay around for a few years and then take there job creating inventions back home. Or why build pedestrian overpasses over roadways that are so poorly maintained that pretty soon the pedestrians could just jump from car roof to car roof.
Good governance is in part an issue of good fiscal management. Until we have governance that can demonstrate that capability I say keep our money away from these spending drunkards.