Ventura County Taxpayers Association: Will You Be Able to Afford California Taxes in Ten Years?

By Sheryl Hamlin

The VCTA Board Chairman Ron Golden welcomed the audience noting three projects VCTA is watching:

1. The Ventura County Medical Center budget. Read here.

2. The Amicus Brief in the California Rule Pension Reform Case. Read here.

3. The Santa Paula Annexation to the Ventura County Fire Department and lack of transparency. Read here.

He then welcomed and introduced the speakers: Susan Shelley (Howard Jarvis Taxpayers Association) and Nelson Carrillo (2017 Realtor of the Year, Conejo Valley).

Tax Portability for 55 and Older

According to Nelson Carrillo, three quarters of those over 55 in California have not moved since 2000 because they cannot afford the property taxes on a replacement home. So these people are living in houses that may not meet their needs, either too large, too many stairs or in communities where children have left.

Californians passed Prop 60 in 1986 (one time portability of taxes in current county) and Prop 90 in 1988 (expands Prop 60 to cooperating counties). Read details here.

Here is how the new proposal would work. If a person sells a house originally purchased for $375,000, sells it for $600,000 and buys a replacement house for $600,000, then the property tax for the $375,000 would carry to the new house in all California counties for people over age 55. If the replacement house were $750,000, then the $175,000 would be added to the $375,000 giving a tax basis of $550.000 or a blended rate.

The new portability proposition frees up housing for new families and allows parents to relocate near children or grandchildren. The Legislative Analyst Office (LAO), usually very scrupulous in the analysis, has analyzed the bill and found that the state would lose money, but the analysis did not include the step up tax base on the new price of the sold home. So in the above example, the previous tax base for the sold house would be upgraded to $600,000, which would mitigate the effects of the portability.

The California Association of Realtors, according to Carrillo, who is a member, projects 43,000 sales due to this ballot proposal. Look for it on the 2018 ballot.

Shelley: Blithering Idiocy: The self-inflicted policies that are destroying California

Susan Shelley, HJTA

While California boasts of its position as the 6th largest economy in the world, you will not hear California officials boast of its position as the 6th highest taxed state in the United States. Nor do State elected officials boast that in 2014, two-thirds of the California General Fund was paid by personal income taxes of 66,000 families. See the source of funds pie chart from State Controller here. And, California leads the nation in poverty with 20.3% of the population at or below the poverty rate, per the US Census.

Brown Eliminates Air Time and Provokes Suit from CalFIRE

In one of the most pivotal legal cases on the docket, Governor Brown is taking on the “California Rule” which says that benefits granted are immutable and inviolate, CalFIRE contends that removal of the ability to buy ‘airtime’ changes their immutable contract, so they are demanding a 17% raise as compensation. Read more here. HJTA has filed an Amicus Brief in the case. Read press release here. By some estimates, CalPERS has a $1 trillion unfunded liability. Watch this video from a recent Stanford conference and if you like numbers, this site gives more detail.

Janus v. American Federation of State, County, and Municipal Employees, Council 31

To follow this case at the Supreme Court, click here. The issue is a First Amendment case, wherein the plaintiff says that paying the union dues violates his First Amendment rights because the dues are spent politically.

California Budget: Do you think it is balanced?

According to Shelley, the California budget is neither balanced nor in surplus. It does not count unfunded pension liabilities and does not include, for example, needed repairs to infrastructure.

Sales Taxes on Services

Senator Herzberg (D-Van Nuys) has not given up on this plan to produce more revenue: taxing services. How about your hair dresser or your web designer or lawyer? Here is the text of the 2018 bill which he previously introduced in 2014.

Real Estate Recording Tax Effecting 1/1/2018

A new tax on real estate, the $75 recording fee (not to exceed $225) went into effect in January 2018. Known as the ‘Building Homes and Jobs Act’, monies are supposed to go toward affordable housing. But there is no monitoring.

Cap and Trade: A Tax or Not a Tax?

Many view the Cap & Trade permit as a fee to pollute. The monies from the auction go to Sacramento. A court ruled that Cap & Trade is not a tax. If a company does not want to pay, it may simply close shop.

This decision was important to Sacramento because Cap & Trade funds are going toward the bullet train, which is now 77% over budget for the 119 miles in progress. The ballot measure for the HSR (High Speed Rail) stipulated that no taxes be used for HSR, so the court ruling paved the way to use Cap & Trade monies for HSR.

California produces 1% of all greenhouse gases (GHG). So, if the State shut down all cars, cows and diesel trucks, how would that affect the world’s GHG? And, at what cost to the citizens?

Water Policy

In the 1980’s, the California Delta projects produced about 8,000,000 acre feet per year (afy) of water. Now the amount is 4,000,000. The reduction is due to the Endangered Species Act.

Sacramento Declares Storm Water as Sewer Water

SB 231 passed by ONE vote redefining storm water as sewer effluent in order to circumvent Prop 218, which says that rates for city services must be approved by the voters, except for trash, water and sewer. Storm water system costs millions of dollars. Wall Street loves to loan on them and now has a golden opportunity to sell more municipal bonds. Because of the seriousness of this and potential enormous tax increases to ratepayers, this will end up in court.

Proposition 13 at Risk

Proposition 13 is arguably the last break taxpayers have in California. Yet it has been watered down. Proposition 39 lowered the threshold to 55% for school bonds and associated parcel taxes, so these bonds and associated parcel taxes generally pass now.

A proposal to split commercial property from residential is planned for the 2018 ballot. This will raise taxes on business who own their property. The bill exempts residential rental (huge lobby from big players who have bought thousands of homes) and farm land (agriculture lobby). So if property taxes are going to increase like they did in the 1970’s pre-Proposition 13, then why would a business locate to California?

Other Tax Proposals

SCA 6 eliminates the 2/3 requirement for parcel taxes regarding local transportation taxes. Click here. This is very dangerous for homeowners who will see new parcel taxes.

On the June ballot, another parks, water and coastal project bond of $15 billion will appear. These usually pass and California has increased its indebtedness for these topics regularly.

Charity State: Turn California into a charity in order to circumvent the new Federal tax laws disallowing the deduction for state income tax laws. The idea is simple: donate to the California Execellence Fund and deduct the donation on the federal tax. Read about it here. This is either a great publicty stunt for De Leon or a brilliant tax strategy!

Do NOT Give Up on California

In spite of this self-destructive legislation, Shelley remains hopeful that sanity will return to the Golden State. But, start looking at your tax bill after each election!

For more information on author click sherylhamlin dot com


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2 Responses to Ventura County Taxpayers Association: Will You Be Able to Afford California Taxes in Ten Years?

  1. Sheryl Hamlin March 24, 2018 at 9:06 am

    Michigan allows teachers freedom from union … curious how many will accept or decline …

    https://www.mackinac.org/michigan-school-employees-can-officially-resign-from-their-union-at-anytime

    Reply
  2. Sheryl March 23, 2018 at 8:51 am

    More info on Prop 68 … bonds for parks …

    http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-prop68-oppose-coupal-20180321-story.html

    Reply

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