The Ever Shrinking Homeowners Exemption

During the holidays, most Californians are focused on their homes.  This is the time when homeowners – and renters too – are decorating and extending hospitality to friends and neighbors.  But heavy taxes and fees imposed on homes by the Grinches in government make it hard for Californians to hang on to their homes .

Homeowners, who work hard to pay for and maintain a house, pay property taxes that often do not fund property related services. These revenues go into local government coffers and can be spent for any purpose.  To pay for services to property, like sewer, water and refuse collection, the homeowner pays extra through fees, assessments and other charges added to the property tax bill. Additionally, homeowners throughout California are also hit hard with bonds.  Virtually all bonds for schools that must be repaid by property owners pass due to Proposition 39 that reduced the two-thirds voter approval requirement to 55 percent.

Even now, there are lawmaker Scrooges in Sacramento who want to make it even easier to load up your property tax bill even more. They argue that because of Proposition 13’s low property tax rate, they should be allowed to squeeze more from average homeowners by making it much easier to increase local taxes.  They ignore the fact that while the property tax rate may be lower than in many states, because the median price of a California home now stands at about $450,000, while nationally it is at $208,000, what the homeowner actually pays is comparatively high.  (California is in the top third of states in per capita property tax collections).

One of the few benefits to homeowners in California – besides Prop 13 – is the Homeowners Exemption.  This exemption simply lowers the taxable value of a primary residence by $7,000, which translates into a paltry $70 reduction in a homeowner’s tax liability.  Not only is the amount of tax savings negligible, the Homeowners Exemption hasn’t been adjusted since 1972.  If the exemption had been allowed to keep up with inflation, today it would be way higher – at least $35,000 for a saving of $350.  And if inflation were based on the increase in California housing costs, it would be even higher still.

The 1972 bill — SB 90 authored by Democratic Senator Ralph Dills and signed by Republican Governor Ronald Reagan — that established this homeowners exemption amount, also included a renters tax credit that allowed the renter to deduct from $25 to $45 from their income tax.  Here, too, state government has been a piker.  Today, the income tax credit sits at $60 for single renter or $120 for head of household or married couple filing jointly.  While at least here there has been a modest increase, it does not come close to keeping up with inflation.  Had it been indexed for the CPI, the $25 credit of 1972 would be $140 today.

It’s past time for our political elites to acknowledge the high cost of owning and maintaining a home as well as the sky high rents in many communities, by addressing these human concerns with an increase in the Homeowners Exemption and the Renters Tax Credit.

The tax-and-spend lobby in the Legislature and all those who receive a check from the taxpayers will say that they cannot afford any loss of revenue.  They will confirm the old saying that taking a dollar from a bureaucrat is like taking a piece of raw meat from a hyena, a lot of shrieking ensues. But with the Sacramento politicians bragging about the increase in state revenues that is billions ahead of projections and has resulted in a surplus, they can afford to leave a few bucks in taxpayers’ and renters’ pockets, money that can improve the quality of life for average Californians, money that, when spent, will help to stimulate the economy.

It is long past time to provide some well-deserved relief to those who are struggling to keep a roof over their heads while trying to keep up with constant additions to their property tax bills, as well as to those straining to pay escalating rents.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally publish by HJTA.org

Time for a Real Debate on the Cost of Climate Programs

Finally, it’s here. A spirited, inclusive, and extremely critical debate over the true costs of California’s climate programs to our economy, small businesses, and working families.

On the heels of an abysmal voter turnout in this month’s election, the emergence of a growing chorus of diverse voices on a vital public policy issue should be welcomed news. It turns out, however, that certain state officials and other vested interests are not interested in debating the costs imposed on small business by California’s broad environmental policies.

But their actions have awoken a sleeping giant. Although CARB made no effort to hear concerns, and debate was shut down in the state legislature, people who are learning about the “hidden gas tax” have started speaking up and working together. From small business owners in the Bay Area to farmers in the Central Valley, religious leaders in San Diego to a mobile health clinic operator in the Inland Empire, consumers from throughout the state are banding together. This movement of drivers and fuel users has serious questions and concerns about the unilateral process used to increase household costs, particularly at a time of high unemployment and economic uncertainty.

To date, the cost of California’s programs to reduce greenhouse gases, subsidize the development of alternative energy, and change consumers’ purchasing choices and modes of transportation has been perceived by many to be someone else’s problem: large industrial energy users.

In this dynamic, the cost to real people – and the disproportionate burden on the low-income – has been mostly invisible, but still very real. As a result, everyday voters have been left out of the debate, which has been limited to just a few interests: industry, government, the environmental lobby, and those who benefit financially from cap-and-trade revenue.

Enter the “hidden gas tax,” the California Air Resources Board’s (CARB) plan to expand its cap-and-trade program to gasoline and diesel next January. For the first time, state government is knowingly imposing the cost of its climate programs onto consumers in the form of higher fuel prices.

In response…CARB offered no response at all. They denied that their program was intended to raise costs or that fuel prices would increase next year, despite the fact that their own expert advisors were stating publically that prices at the pump would go up significantly.

What’s more, CARB claimed this wasn’t an issue of consumers. Rather, it was an “oil industry” issue. They went one step further and claimed that drivers didn’t need a public forum on the “hidden gas tax” because the board had held various workshops over the years attended by…you guessed it…environmental groups, bureaucrats, and big business and industry.

In short, CARB only wants to debate “Sacramento insiders,” not the millions of impacted Californians.

So it goes with the environmental lobby. At every turn, the organizations voicing concerns about the hit on jobs and working families have been dismissed as “front groups” and marginalized as “Astroturf”—all part of an elaborate oil industry “conspiracy.”

To their way of thinking, there are only two points of view: theirs and the oil industry. Either you buy into their worldview lock-stock-and-barrel or you are just a puppet on a string. If you’re looking to create your own space in the debate, they are not about to oblige. Unfortunately, every person in the state is impacted by their policies every time they make a purchase or drive their car.

These groups could promote the benefits and the costs of programs to combat climate change and welcome a vigorous debate. Instead, they would prefer to shoot the messenger and silence those with whom they do not agree.

Doubling down on ad hominem attacks may make for salacious blogs and sensational news copy, but it won’t keep the debate at bay for long. It is time for every Californian to ask questions and fight for their right to be heard by those charged with representing them, and not accept being told “it’s in your best interest”. So bring on the debate!

John Kabateck is California Executive Director, National Federation of Independent Business

This article was originally published on Fox and Hounds Daily