California’s Property Tax Postponement program aids low-income seniors

property taxFor Californians who are struggling to pay property tax bills that are rising ever higher due to the increasing number of local bonds and parcel taxes, help may be available.

Property taxes are held in check by Proposition 13, passed by voters in 1978. It limited the annual increase in the assessed value of a property and cut the tax rate to 1 percent statewide. Prop. 13 has helped millions of Californians keep their homes by keeping property taxes predictable and affordable.

But keeping property taxes in check doesn’t always keep property tax bills in check. That’s because extra charges for voter-approved debt or special taxes can be added to property tax bills, and those can really add up. This can become a terrible burden for homeowners who live on fixed incomes, and may even force some to sell their homes because they can’t afford to pay the taxes.

Fortunately, the state of California has restarted the Property Tax Postponement program, allowing homeowners who are at least 62 years old, are blind or have a disability to defer the current-year property taxes on their principal residence if they meet certain criteria.

Before the Legislature ended the Property Tax Postponement program in 2009 amid budget cuts, nearly 6,000 homeowners throughout the state were able to benefit from it. Many had been in the program for 20 years or more and the majority were over 70 years old. In the last year of the program before it was cut, 208 people who claimed its assistance were over 90 years old.

In 2014, legislation was passed to restore the program, and it started up again in the fall of 2016.

To qualify, applicants must have 40 percent equity in their home and an annual household income of $35,500 or less. Other requirements also apply. For example, homeowners who have taken out a reverse mortgage are not eligible.

Homeowners who are accepted into the program may defer their current-year property taxes. It’s actually a loan from the state, with an interest rate of 7 percent per year. The state places a lien on the property until the loan is repaid, but repayment is not due until the homeowner moves or sells the property, transfers the title, refinances, defaults on a senior lien, obtains a reverse mortgage or passes away. …

Click here to read the full article from the Orange County Register

Withdrawal of the Taxpayer Protection Act could haunt the American Beverage Association

TaxesBy now, political observers have heard how a series of negotiations in Sacramento resulted in three initiatives slated for the November ballot being withdrawn by their respective proponents. The blame (or credit, depending on your perspective) for these deals has been attributed to a 2014 bill authored by then-Senate Leader Darrell Steinberg, D-Sacramento, which allows proponents to withdraw an initiative even after it has qualified for the ballot. It was believed that this reform would result in more compromises being hammered out with the Legislature on contentious issues.

One of the measures withdrawn last week was the Taxpayer Protection Act, which would have strengthened a number of existing constitutional provisions including the two-thirds vote for local taxes. While a broad coalition of business and taxpayer groups backed the measure, and even provided significant input into its drafting, the lion’s share of financial support came from the American Beverage Association.

Faced with massive opposition from local governments and public-sector labor organizations, ABA decided to strike a deal with the Legislature to prohibit any future local soda tax increases between now and 2030 in exchange for removing the Taxpayer Protection Act from the ballot. The decision may also have been based, at least in part, on the perception that other potential financial backers for the campaign would be focused on other initiatives on the November ballot.

Nonetheless, ABA’s decision to withdraw the measure in exchange for limited protection for a specific industry blindsided many interests in the Capitol, including taxpayer organizations which were excited for an opportunity to campaign for strong taxpayer protections in an absurdly high-tax state.

Whether the Taxpayer Protection Act would have passed will be the subject of speculation for years. But it’s now a moot point. What isn’t moot, however, is whether the deal itself, and the similar negotiated agreements on measures addressing issues related to lead paint and consumer privacy, are a reflection of good government or whether they lead to “extortion light.”

Interestingly, political commentators have viewed these negotiated withdrawals differently. Some see them as all that is wrong with Sacramento while others see them as forcing the legislature to do its job. Most fall in the first category. Joel Fox, who puts out the Fox and Hounds blog, wrote a piece entitled “Weaponizing the Initiative Process.” Long time Sacramento Bee columnist Dan Walters, who now writes for CalMatters, calls what happened “genteel extortion.”

On the other hand, veteran Los Angeles Times columnist George Skelton liked the fact that three potentially confusing measures have been taken off the ballot. He also observes that “unlike … initiatives, bills can later be easily tweaked by the Legislature to fix flaws.” But Skelton’s observation reveals another downside to these deals: Will the parties keep their word?

The decision by ABA to withdraw the Taxpayer Protection Act resulted in the enactment of legislation that they presumably believed would protect their interest for more than a decade. But almost immediately, interest groups, including health organizations that have targeted “sugary drinks” for years, filed a new initiative measure specifically targeting that industry. And unlike the Taxpayer Protection Act, which had broad support from an array of business and taxpayer groups, a measure seeking higher taxes just on soda might leave ABA alone in the opposition camp. …

Click here to read the full article from the Long Beach Press-Telegram

California’s Budget Process Should Worry Every Taxpayer

California Gov. Jerry Brown points to a chart showing the growth of the state's Rainy Day fund as as he discusses his proposed 2018-19 state budget at a news conference Wednesday, Jan. 10, 2018, in Sacramento, Calif. Brown proposed a $131.7 billion state spending plan, dedicating $5 billion toward the fund. (AP Photo/Rich Pedroncelli)

Let’s face it, when it comes to the state budget of California, most citizens suffer from MEGO (My Eyes Glaze Over).  Because even public finance experts are confused by the thousands of pages of budget documents, it’s no wonder that citizen taxpayers don’t stand a chance. Besides, normal people are too busy working hard to pay for all the spending increases reflected in the budget.

Nonetheless, passage of the state budget remains one of the most important functions of the Legislature because it reflects the state’s spending priorities for years in the future.  Here are some key takeaways that should concern every California taxpayer.

First, government spending is out of control. While projected revenues are up eight percent – a good thing – from a year ago, expenditures continue to accelerate at a faster clip, up by nearly eleven percent to a record $138 billion budget. When other state funds, including special funds, are added to the total, nearly $200 billion in state funds will be spent in this budget. Legislators will argue that some of these expenditures are going to bolster a rainy day fund to protect against an economic downturn. While this fund is also at a record $14 billion, this will hardly protect state programs even in the event of even a moderate recession.  Second, we doubt that the spending priorities of politicians reflect what taxpayers think are important.  For example, this year’s budget includes a billion-dollar plan to completely remodel the State Capitol, while the state continues to lose ground on nearly a trillion dollars of unfunded pension obligations.

Finally, as in prior years, the 2018-19 budget is a vehicle for numerous abuses. It is now common to enact politically motivated legislation as so-called budget “trailer bills” as a means to avoid any meaningful analysis and public hearings.  This column previously alerted readers to one such sneak attack, a precedent-setting tax on water that thankfully was beaten back – at least for now.  But two other proposed bills represent the worst of Sacramento special-interest politics.

Two years ago, the Howard Jarvis Taxpayers Association sponsored Assembly Bill 195 (Obernolte), a bill that increased transparency for local bonds and special taxes by requiring disclosure of the rate, duration and amount of revenue to be raised. AB 195 mandates that these important facts be included in the actual ballot label, typically the last thing voters read before deciding.

Now, education lobbyists and building trades groups are attempting to delay the implementation of AB 195 for local bonds by two years, to keep this important information from being presented to voters. In other words, our legislators are using a corrupt, non-transparent process to deprive local voters of transparency regarding the cost of bonds at the local level.  This is a double insult to taxpayers. …

Click here to read the full article from the San Bernardino Sun

The Outrageous Tactics Used to Keep the California Gas Tax

Gas PricesA few weeks ago this column addressed the issue of polling and how it can be manipulated and, even when it is not manipulated, how wrong it can be.  Still, candidates, consultants and the media do a lot of polling to test the viability of whatever it is they support or oppose.

Sen. Josh Newman’s recall election was a bitter fight. While polling suggested he was in trouble, those supporting the recall were well aware that polls can be wrong. But even recall proponents were surprised that the recall would prevail by a 59-41 percent margin. That wasn’t just a loss for Newman. It was a trouncing.

This past week, in his political swan song, Newman vented against the recall effort on the floor of Senate.  Incredibly, Newman stated, “I can’t imagine wanting to win so badly that I would ever do, in the pursuit of partisan advantage, what has been done here.”  In light of how Democrats skewed the political process during the recall effort, Newman’s complaint is laughable. Let’s review.

Not once, but twice, Democrats jammed through new laws changing the recall process specifically for the purpose of throwing Newman a political lifeline.  These were enacted as so-called “trailer bills,” last-minute, supposedly budget-related bills that are passed without any public hearings.  These were designed to delay what otherwise would have been a special election for the recall last November or December, a ploy that succeeded in delaying the issue to June.  Because the purpose of the 100-year-old right to recall is to get a rapid resolution of whether a politician should continue in office, the claim that the new laws were “improving” the process was ridiculous.

Then, adding insult to injury, the ostensibly neutral Fair Political Practices Commission adopted a new rule allowing Newman unlimited campaign contributions from his fellow Democratic senators.  This despite the fact that they denied this right to a Republican senator just a few short years ago.

For Newman to upbraid Republicans on the floor of the California Senate for failing to defend him suggests that he has totally forgotten the Banana Republic tactics that were deployed to save his political career. It also demonstrates how disconnected he was from his constituents, who really were angry over his vote to ensure that California had the highest gas and car taxes in the nation.  His political tone deafness was further revealed by more anti-taxpayer votes for single-payer healthcare, a recording tax to fund housing and a vote for cap-and-trade. …

Click here to read the full article from Pasadena Star News

In Sacramento, Democrats are run by the unions

Unions2June 6 marks the 40th anniversary of voters’ overwhelming approval of Proposition 13, which has been protecting all California taxpayers ever since.

Some people mistakenly think Prop. 13 protects only homeowners, because it cut the property tax rate statewide to 1 percent and put a stop to uncontrolled increases in assessed value. But it did something else, too. It required voter approval of local tax increases and set the threshold for approval of special taxes at a two-thirds vote.

For 40 years, big-spending politicians have been looking for loopholes.

Take parcel taxes, for example. A parcel tax sounds like a tax on UPS deliveries, but it isn’t. It’s a tax on real estate parcels. Under Prop. 13, politicians can’t raise property taxes that are based on the value of property, but they figured out that they could add a flat tax to property tax bills if it wasn’t based on value.

Under Prop. 13, two-thirds of voters have to be convinced to approve parcel taxes.

Politicians figured out that the two-thirds threshold would be easier to reach if they exempted a lot of people from having to pay the tax. Certainly people who won’t have to pay a tax are more likely to vote for it. And politicians who vote for the exemptions can say they voted for a tax break, even though they were raising taxes at the time.

An example of this was the Legislature’s action in 2008 to exempt people on Social Security Disability from paying education parcel taxes. HJTA opposed this bill because it undermined the two-thirds vote requirement for parcel taxes established under Prop. 13. The more classes of people who are exempted, the more the two-thirds vote will be watered down, and the easier it is to raise taxes.

Taxpayers are hit twice by the exemption trick. Taxes are raised more often, but the exemptions mean the government receives less revenue. So the likelihood of other taxes being raised to make up the difference in the future is that much greater.

But when something is working for the politicians, it tends to stick around.

Politicians love picking winners and losers.  It means power over the lives of others and provides a great source of campaign contributions.

The “progressive” legislators who control California’s government favor government employee union organizations — the most powerful force in Sacramento. Every favor granted to public sector unions is a transfer of wealth from taxpayers and the private sector to government employees and the public sector.

Right now, the Legislature is considering a bill that would exempt teachers and education support staff from paying education parcel taxes. Senate Bill 958, which has passed the Senate and is now in the Assembly, was initially a statewide proposal but has been narrowed to target only the Davis Joint Unified School District in Yolo County.

For now. …

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

Click here to read the full article from the Orange County Register

Progressives’ situational, self-serving, love of transparency

CapitolWe’ve all heard of “situational ethics.” This column is about “situational transparency,” a phenomenon among progressives who love transparency in matters of public policy, except when they hate it.

Let’s review the areas in which progressives support transparency: the salaries of CEOs, the race and gender of employees, the details of business supply chains and, of course, extensive disclosures about campaign finance.

But in other matters, particularly relating to their own interests, the same people are flatly opposed to transparency. For example, progressives claim to desire disclosure of who pays for political advertising, and they backed legislation such as Assembly Bill 249, a burdensome mandate to add confusing content to political ads. It was so burdensome, in fact, that an exception was made for ads paid for by labor unions, major backers of progressive politicians.

Progressives also campaigned hard against Proposition 54, the California Legislative Transparency Act, which voters approved despite liberals’ complaints. Prop. 54 requires that bills must be posted online in their final form for at least three days before lawmakers can cast a final vote on them. Proposition 54, which the voters approved in 2016, also requires the Legislature to make video recordings of all public hearings, and it allows any member of the public to record a legislative hearing.

Another example of how those in power resist having the public see what they are doing involves public employee compensation. For years, government agencies and departments have resisted disclosing how much their managers and employees are paid in both salaries and benefits. The Howard Jarvis Taxpayers Association had to file numerous lawsuits — or threaten lawsuits — to get local governments to disgorge the data. After prevailing in all those actions, compensation data is now available for public inspections — a healthy development in countering government entities that constantly plead poverty and demand higher taxes.

Perhaps the most glaring example of progressive hypocrisy when it comes to transparency is revealed by the defeat of Senate Bill 1074, authored by state Sen. John Moorlach, R-Costa Mesa, which would have provided California’s millions of motorists with valuable information about the price of gasoline. Titled “Motor Vehicle Fuel: Disclosure of Government-Imposed Costs,” SB1074 would have required gas stations to post near each pump a breakdown of all the different costs that go into the price per gallon of fuel, such as federal, state and local taxes and costs associated with environmental rules and regulations, including California’s hidden tax, the permit fees that fuel producers have to pay under the state’s infamous cap-and-trade law.

As you might expect, the progressives who control the state Legislature refused to provide the public with the true cost of government when it comes to driving our cars. The same folks who rail against the oil companies and who are quick to allege deep conspiracies about corporate profits have no interest in informing the public about government-imposed costs that dwarf the oil companies’ profit margin on a gallon of gas.

We can also expect them to oppose the government transparency that would be required by an initiative that recently met the signature requirement to qualify for the November ballot.

The Tax Fairness, Transparency and Accountability Act of 2018 would require that any law creating a new, increased or extended tax must contain “a specific and legally binding and enforceable limitation on how the revenue from the tax can be spent.”

Even if the tax revenue will be spent for “unrestricted general revenue purposes,” the law must say so.

California politicians often complain about “ballot-box budgeting” and requirements for voter approval before taxes can be raised. But progressives have earned a reputation for hiding the cost of their policies, and voters can’t be blamed for playing an aggressive defense.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

How push polls pervert politics

Voting booth“There are lies, damn lies and statistics,” goes the old saying. It has always been true that statistics can be presented in ways that are highly deceptive and intentionally misleading.

A Midwestern city might truthfully claim that its average temperature is a perfect 74 degrees — just like the Hawaiian Islands.  It could be technically true, except that the deviation from that temperature in the sub-tropical climate isn’t very great, while the Midwestern city might swing from below freezing in the winter to triple-digit heat in the summer. That comfortable-sounding “average” is sure not the full story.

Still, for susceptibility to manipulation, statistics don’t hold a candle to polling — especially political polling.  During this primary season in California, the various candidates are releasing reams of polling to show how far ahead they are of their competitors.  Two different polls can show diametrically opposite results, with one candidate showing he or she is leading 80 percent to 20 percent over an opponent while the opponent might claim to be ahead by a margin of 90 to 10.

The credibility of political polling took a huge hit in the last presidential election. Virtually all the polling showed Hillary Clinton coasting to a relatively easy victory over Donald Trump.  In fact, his path to victory in the Electoral College was so narrow that he would have to “run the table” in every swing state — something all the pundits said was next to impossible.

What’s particularly odd about that election is that even the good polls were wrong. And by good polls we mean those administered by pollsters who don’t have a political agenda.  Good pollsters will admit that their reputations depend on being accurate in their predictions.

The lesson here is that voters need to take any polling with a grain of salt. That is especially true when the polling is paid for by an interest group.

One recent example makes this clear. There has been a recent push by supporters of higher taxes to impose a statewide “fee” on the monthly water bills of all water users — homeowners and businesses — to pay for programs to deal with contaminated water supplies.  Interestingly, the opposition to the proposal includes both the Association of California Water Agencies (ACWA) and the Howard Jarvis Taxpayers Association, two groups frequently at odds over water-rate practices.  But here, both groups have deep concerns about the state intruding in an area best left to local government interests. …

Click here to read the full article from the OC Register

Proposals to ban internal combustion engines in California are a bad idea

carpool-laneThe latest battle in Sacramento’s war on California’s middle class is the push to ban the internal combustion engine.

Luckily, the effort has stalled.

The legislation that would have imposed the ban, Assembly Bill 1745, died last month, but bad ideas in California have a way of recurring like nightmares. We will see this proposal again, either as legislation next year or perhaps even as a ballot initiative. A number of so-called progressive candidates on the ballot this year have publicly stated they embrace this foolish idea.

The bill that was stopped, AB1745, would have prohibited the Department of Motor Vehicles from registering a new vehicle unless it was a zero emissions vehicle, beginning on January 1, 2040. Under the proposed law, a new car with an internal combustion engine could not legally be driven in California after that date.

A ban on internal combustion engines would certainly limit mobility and transportation options for millions of California families and businesses. And it would arbitrarily limit the development and use of advanced and efficient vehicle technologies, the kind that have already achieved great success in squeezing extra miles out of a gallon of gas.

Today, despite the availability of ZEVs, a substantial publicly funded rebate program and access to HOV lanes, ZEVs accounted for only 1.9 percent of the over 2,000,000 new passenger vehicles sold in California in 2016. And many of these sales are repeat sales to the same households, according to the UC Davis Institute of Transportation, raising the question of whether plug-in vehicles are experiencing widespread consumer rejection, outside of a limited group of true believers.

A ban on internal combustion engines is an attempt to force consumers into buying vehicles that they have decided are not best suited to their needs.

The better alternative is leveraging all available vehicle technologies, including efficient internal combustion engines, so that California can reach its environmental goals without banning or discouraging any technological innovations. …

Click here to read the full article from the OC Register

There is no loophole in Proposition 13

property taxFor decades, California progressives have complained about a “loophole” in Proposition 13 that unfairly benefits the owners of commercial real estate to the detriment of homeowners. This characterization has been widely accepted by the mainstream media with little critical analysis.

There is no loophole in Prop. 13.

There is, however, an ambiguity in the statute implementing the measure that relates to the “change of ownership” rules. That ambiguity can be easily addressed by a statutory amendment without doing violence to Prop. 13. Both the business community and the state’s preeminent taxpayer organization, Howard Jarvis Taxpayers Association, agree that this change is necessary.

Senate Bill 1237, by state Sen. Patricia Bates, would address this technical tax issue involving fictitious entities such as limited liability corporations and complex partnerships in a way that is wholly consistent with Prop. 13.

Specifically, under Prop. 13, when you sell your home, it is reassessed to the full market value for the new purchaser. Of course, the new buyer still enjoys the 1 percent rate cap and the certainty that the taxable value of the property will not increase more than 2 percent per year.  But for properties that have been under the same ownership for decades, the “taxable” value of the property can be just a fraction of the market value. That is why Howard Jarvis and Paul Gann provided in Prop. 13 that upon change of ownership, property would, at least initially, be taxed at market value. After purchase, it receives the same 2 percent limitation on annual increases in taxable value as all other properties.

But some clever tax attorneys have advised clients that they can avoid Prop. 13’s intent to treat commercial transactions the same as homeowners by creating fictitious entities that themselves are transferred in an inappropriate attempt to avoid reassessment. This violates the spirit of Prop. 13 and actually gives the enemies of Prop. 13 a justification for arguing that all of Prop. 13’s protections should be stripped away for commercial property. It also explains why public employee unions continue to oppose bills such as SB1237, because it would deprive them of their best argument in the ongoing fight to remove Prop. 13’s protections for commercial property. Indeed, the enemies of Prop. 13 are already working to qualify this very initiative for the 2020 statewide ballot. …

To read the entire column, please click here.

Enemies of Prop. 13 Delay Attack on Iconic Initiative

property taxA reporter for the Bay Area News Group stopped by the government office in Santa Clara County and concluded that while people standing in line to pay their property taxes were upset with the heavy burden, they had scant knowledge of California’s iconic Proposition 13. What most were probably unaware of is that their taxes would be at least twice as high without Prop. 13.

Many people who live in California today were not here in 1978 when Proposition 13 was passed overwhelmingly by voters. Today’s younger homeowners have little idea how frightened and angry citizens were in the mid-1970s when their property taxes doubled or even tripled from the previous year.  Homeowners were literally being taxed out of their homes.

But despite having no personal memory of the pre-Prop. 13 era, most Californians have at least heard of Proposition 13 and, when prodded, recall it somehow helps to keep escalating property taxes in check.

In June, Proposition 13 will hit its 40th birthday. While long-time homeowners will surely celebrate, those in government with an insatiable appetite for taxpayer dollars are hoping that voters will be ready to weaken it.  But previous attacks on Proposition 13 have come up short. At most, Prop. 13 was weakened by court decisions involving fees and charges as well as attacks on the two-thirds vote requirements.  But those attacks were quickly countered by subsequent ballot initiatives such as Proposition 218 in 1996, the Right to Vote on Taxes Act, which reinforced Prop. 13’s original intent.

Knowing that a direct attack on Proposition 13’s protections for homeowners is a fool’s errand, the tax-and-spend interests have focused on raising property taxes on business property. This so-called “split roll” effort has gone on for about 30 years and has never really gained any serious traction. According to these interests, 2018 was going to be the year where they would finally be able to take a big chunk out of Prop. 13 by hitting commercial real estate with several billion dollars in higher taxes.

The optimism displayed by Proposition 13’s detractors has been based in large part on the expected “blue wave” of voters coming out in support of progressive candidates. Liberal Democrats believe, rightly or wrongly, that voter disgust with the Trump administration might at least allow them to regain control of the U.S. House of Representatives. The thinking, at least until recently, has been that November of 2018 would be the right moment to fracture the pro-Proposition 13 alliance because of an energized progressive base, low voter turnout and fading memories of 1978.

But a funny thing happened on the way to the ballot box. After beginning a serious effort to collect signatures for their “split roll” initiative, the proponents have taken their foot off the gas and announced that, instead, they will attempt to qualify the measure for the 2020 ballot. The ostensible reason for the delay is that it would give them more time to expand their coalition (of course, the same can be said for Prop. 13 defenders) and that the voter turnout model in 2020 would be better for them – a dubious claim indeed.

Split-roll proponents might be having second thoughts about what they thought was a weakening of support for Prop. 13 or the political strength of their own coalition. Perhaps they’ve seen polling – both private and public – revealing Proposition 13’s continued popularity. Whatever the reason, this November’s election will not present a direct threat to Proposition 13. …

Click here to read the full article from the Orange County Register