Blogging Bayport Alameda

October 22, 2008

“Do you know what this is?

Filed under: Alameda, School — Tags: — Lauren Do @ 7:00 am

It’s the world’s smallest violin…

and it’s playing for Alamedans for Fair Taxation, who recently wrote an open letter in the Alameda Sun.  They felt as though it would make their case stronger if they “quantified” how much Measure H would cost select businesses in Alameda.   Some of the businesses were hard to identify which they were, but for the one was discoverable through process of elimination it was interesting to see how much they were paying in relationship to their base property tax. The “family-owned nursery” would indeed pay $3,500 per year, but guess what their ad valorem property tax is?  Less than $1,300 per year.

Of course, others have weighed in on this issue.  From Stop, Drop, and Roll on the issue of the term “fair” as in “Alamedans for Fair Taxation”:

…It’s unfair just like our current property tax system is unfair. In fact, a quick check of the property taxes paid by the Kelly’s on their store shows that my family pays over $3,500 a year more than the Kelly’s do thanks to Prop 13 (which was passed by a lower percentage of voters than Measure H did.)  That’s not fair.

It’s also not fair that Kelly’s store received a grant from the city last year to fix up her awning. It looks nice, but I’m wondering where my grant for painting my house is, it’s only “fair.”

Let’s not even start on who was supporting the city-built parking garage, and what “fair” means when you push for public funding to support your business and then complain about a four-year tax to support the schools.

Many folks in Bayport are paying over $8,500 more, plus taxes to pay for their streets and parks that are on top of the taxes they pay for the rest of Alameda’s streets and taxes. That’s not fair!…

Here’s a brief list of properties that pay way less on the property taxes than I do, I live in Bayport, my ad valorem is way more than $8500 and I pay a crapload of other additional taxes and fees for services for the pleasure of living in Alameda:

  • Pillow Park Plaza (with Measure H assessment)
  • Pauline’s Antiques (with Measure H assessment)
  • The “family owned nursery” referenced above (with Measure H assessment)
  • All three of Borikas’s properties added together.  (with Measure H assessment)

More recently, though, Eve Pearlman has commented on the issue of the fairness, in general, of taxation, highlights:

…To be clear: Although it is sometimes painful, I am OK paying our taxes. I am grateful for all the things provided by government, from health services for the needy to tended trails in public parks, from oversight of pesticides on crops to a functioning judicial system.

But, taxes: Neighbors live in a house with a floor plan identical to ours. They pay just $1,740 a year…Right now, their house is on the market. If it sells for the roughly $850,000 asking price, the new owners will pay about $11,000 in property taxes…I can’t think of any standard by which this is fair…

The owners of Pauline’s Antiques (I mention them because they’re been vocal opponents of Measure H) will this year have a property tax bill of $5,450…The owners of Pillow Park Plaza, also outspoken Measure H opponents, are poised to pay a total of $10,750 in property taxes…

By way of contrast, Park Street property owners who bought their buildings more recently pay significantly higher property taxes. For example, the owners of a 7,300-square-foot Park Street building south of Pillow Park and Pauline’s have this year a property tax bill of $21,740. The owners of another recently-sold Park Street building…considerably smaller than Pillow Park and Pauline’s…has a property tax bill of $20,800. Are we still holding up “fair” as a standard?

A flat per parcel tax, one that is assessed without regard to property size or use or value, is of course not fair either. Should a shopping center pay the same price as a two-bedroom bungalow?…

There are some interesting comments on Eve P.’s blog in reaction to her column, definitely worth a read.

And while we are on the subject of Measure H and its detractors, AUSD has filed a “Demurrer to Complaint for Invalidation” in the Borikas case.  This is scheduled to be heard on February 9, 2009.  The demurer basically smacks down the Borikas complaint essentially saying that they haven’t made a legal case.  Six out of the seven grounds proffered in the demurrer begins with “The complaint in uncertain…” lists a section, then says “…it is impossible to determine…” how the District violated whatever it is proposed that they violated.   The District is suggesting that the complaint is uncertain, which according to the Code of Civil Procedure is defined as “ambiguous and unintelligible.”  The failure of Borikas to adequately outline what the bases of his complaint is makes it impossible for AUSD to respond and therefore defend its case.

One of the most important issues in this demurrer is item D in the Memorandum of Points and Authorities which questions the legal standing of Borikas to even bring this case in the first place.  According to the Memo of Points and Authorities, the Code of Civil Procedure states that one can only bring a proceeding if that person is an “interested person.”  And while we can all argue that we all are “interested” people, legally that means that one needs to have a direct, not consequential, interest in the matter.  As I mentioned previously in another post, none of the Borikas properties are commercial and I have confirmed that two of the three have been levied the residential amount.   The third has no amount listed for either Measure H or the previous school parcel tax, so I’m assuming that this is the property that has received the exemption. 

Nothing new in the Beery case other than the School District requesting a time extension to respond to the complaint.

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27 Comments

  1. The thing that makes me so angry about Pillow Park and Pauline’s is the movie theater/parking garage. They were all for this project and how it would help their business. So spending other peoples tax dollars to help themselves is OK but spending about $100 more per month to save the schools in our town isn’t? To top it off Pauline was also willing to take a facade grant and have the city fix up her building. By the way how do we look up fire inspections? I would love to read what the fire inspector said about her business.

    Prop 13 should never apply to commercial property. If you own your the property your personal business is in you are simply your own landlord and anywhere else you would be paying market rate. If you are the landlord you certainly aren’t charging rent based on the fact that your taxes are low. People can argue the prop 13 on personal residence but for commercial there is no excuse.

    Comment by Victoria — October 22, 2008 @ 7:30 am

  2. I can’t imagine paying $10,000 a year in property tax, but if I were paying that much I would sure be wondering what I’m getting back from the State of California in government services. The new home buyers are the individual equivalent of the State of California relative to the Federal Government; they pay more in than they get back.

    Comment by Mike Rich — October 22, 2008 @ 11:47 am

  3. Mike, how about $10,000 a year in health insurance on top of the property tax you do pay? That is the employee portion of AUSD health “benefit” for a family of four. If employees got full benefits you can imagine how much bigger the budget deficit would be.

    On this law suit business. Isn’t filing for an injunction a first step for the plaintiffs to both test the waters and to fend off paying the tax?

    The Sun’s reporter Evanosky stated in his last “Twisted Road” article that AUSD won’t get any money until the suit is settled. Isn’t that incorrect and how can we find out about a time line for an injunction if they have filed for one?

    With the budget time lines and tax collection schedules, I can’t believe the legal system can be this ponderous. There is so much at stake for all sides. The waiting is torturous and we are all devouring each other in the interim.

    Comment by Mark Irons — October 22, 2008 @ 2:59 pm

  4. We are first time homebuyers who are not in a risky loan, so will get no benifit from the government bailout and we pay over $13,000 a year in property taxes. There are just 2 of us with no children, but voted for prop H for the benifit of other peoples children.

    The reason I complain about the $13,000 we pay isn’t fair is because I have a friend who owns a house in the gold coast tax assessed at $70,000 and they are selling it for $1.25 million…that isn’t fair, and by the way they have 3 kids and voted against prop H.

    Go look up some of the tax assessed values online of some of these gold coast mansions and see how little they are paying. Further more a lot of these are not poor people who will loose their homes if they had to pay market rate taxes. My friend was complaining because of the banking situation and the FDIC insurance of only $125,000, they had to scramble and open up a bunch on new accounts all over to spread it out.

    Maybe a percentage of these first time home owners in foreclosers because of the high property tax on there property as well as the risky loans. Spread it out don’t just put the burden on new business and new homeowners. Let Warren Buffet pay taxes on his actual value of his house. You could lower the property tax rate for everyone if everyone was assessed at the actual value. And sure there can be property tax relief for those not making enough such as tax credits and rebates such as other states have.

    I haven’t stepped foot in Pillow Park Plaza since Prop H although prior have bought several things there and planned to buy some other things we saw. I just don’t like Pauline’s it is just to crowded and too much junk.

    DK, just don’t respond, because what ever you say, I am so over you. Anti developer you who wouldn’t live where you are with out one.

    Comment by Gunter — October 22, 2008 @ 8:09 pm

  5. Pauline’s is a junk shop, pure and simple. It’s an embarrassment to Park Street and to Alameda. The most effective thing the Park Street Business Association could do to gentrify the street is to get rid of Pauline’s.

    Comment by Jill — October 22, 2008 @ 9:00 pm

  6. Gunter, et al,

    The fair thing about the Prop 13 basis for property tax assessment is that it is equal for all who buy a house. We all get to know what the financial liability of our home buying decision is, and the outlandishly bad decisions of others, (banks, assessors, realtors, and buyers) will not affect the sound judgment of buyers who buy what they can afford. I think every generation has the same experience – a home purchase for most people is the biggest financial commitment of a lifetime. It was harder for me than my parent’s generation, or so it seems. Well into my 30’s it still seemed the impossible dream. It is a whopping decision, a lifestyle changing commitment, but I should not lose my home because someone else wants to put a false value on it. The only true value of a home is what a ‘willing buyer’ exchanges to a ‘willing seller’, if either party is unwilling, there is neither a sale nor a true revaluation. On average, homes turn over every 5 – 7 years. True, there are many exceptions – many ‘family homes’ get passed to children and grandchildren that have never been reassessed since before the ’70s. I agree that there is some apparent unfairness in the system.

    What do you propose that will:
    a.) Not harm those who bought based on what they could afford with prop 13 protections, or
    b.) Have a chance of being approved by voters?

    I might suggest a reassessment when a home is passed from one owner to another, whether or not it is sold, i.e. if a home is inherited, it is reassessed. This alone would be a significant change, but one I might consider supporting.

    Having considered other alternatives such as reassessment upon refinancing, or a percentage correction every decade other time based period; I would support neither because of the way it could harm the buyer who had exercised good judgment at time of purchase. Again what ideas do you propose that meet both a & b above?

    Comment by David Kirwin — October 22, 2008 @ 10:23 pm

  7. I am a rich guy, I live alone and pay $25,250 a year in property tax and I think everybody should pay $25,250 a year in property tax. Otherwise it’s not fair that I should pay more because I’m only living one life and not using that much city services. Just because I’m rich doesn’t mean I should pay more.

    Comment by John L. — October 23, 2008 @ 8:25 am

  8. #7 — Hey, we have something in common. I’m rich too! Thanks to Prop 13, the property taxes on my refinery are way low. And I get all sorts of other tax breaks. Seems pretty fair to me!

    Comment by Chevron — October 23, 2008 @ 9:32 am

  9. #6,

    One of the ironic things about Measure H is that it excludes seniors, who also are more likely to benefit from Prop 13 because they’ve owned their homes for a long time. So, you get even more shifting of costs from the older generation to the younger generation.

    As far as an idea for fixing Prop 13, how about if the property tax could be reset every 10 years, but the increase could not exceed the lesser of 25% or a certain percent of the home owner’s taxable income? That way, it would avoid putting people in the position of not being able to afford the property tax increase. To make something like this palatable to taxpayers it would need to be accompanied by reform in the same piece of legislation because there is a hell of a lot of waste in State government, not to mention overpaid prison guards, etc.

    Comment by Mike Rich — October 23, 2008 @ 11:39 am

  10. #9

    I got an idea! How about if initially you’re taxed on how much you pay for your home then only increase the tax each year by the same percentage as every other home. Nah, that’s too simple.

    Comment by John L. — October 23, 2008 @ 12:16 pm

  11. #10 — You talk about homes, but don’t forget us commercial property owners too. I would be totally bummed to see the property taxes on my refinery increased. After all, as a direct descendent of John D. Rockefeller’s Standard Oil empire, I’m old too. And only the truly heartless would tax a corporate senior citizen like me based on the fair value of my property. How will I eat and pay for my medicines and my exhorbitant executive compensation packages?

    Comment by Chevron — October 23, 2008 @ 1:27 pm

  12. #9 MIKE? – Reality check time!

    At a time when most are having a hard time just breaking even from check to check, do you really think it would be fair to increase their tax bill by 25% of their total income?

    ARE YOU KIDDING ME?

    I am glad you gave it a shot, but your idea will not meet requirement B of post #6

    Comment by David Kirwin — October 23, 2008 @ 3:04 pm

  13. I meant requirment A or B of post #6

    Comment by David Kirwin — October 23, 2008 @ 3:05 pm

  14. Kirwin, step away from the computer, and take a reading comprehension course. Come back when you have a certificate.

    Comment by notadave — October 23, 2008 @ 3:57 pm

  15. DK. Are you screaming again? And no one is listening? Deep breaths.

    Comment by BC — October 23, 2008 @ 4:49 pm

  16. #14 — Don’t spoil the fun — seeing DK go off the deep end for no reason has some entertainment value.

    Comment by June Cleaver — October 23, 2008 @ 5:23 pm

  17. From post #9 – “the property tax could be reset every 10 years, but the increase could not exceed the lesser of 25% or a certain percent of the home owner’s taxable income”

    What does this mean then? “the lesser of 25%”;
    25% of what, if not income?
    Does Mike mean 25% of the difference between actual value (purchase price) and the appraised value (based on speculation of others), but limited, reduced, or set, by income levels? Should a property tax increase be based on income levels instead of property value? If such an idea is plausible, why not base the added property tax on the owner’s net worth, including all holdings, not just income? Would this meet the criteria of both A & B of post #6? As a reminder; Prop 13 does establish an annual property tax value increase.(2%) Perhaps this year that increase will even exceed the appraised or perceived change in property values, at least on a state average.

    Why not also have a special tax to assess total net worth of all residents, owners, renters, and those owning or doing business in Alameda; a one-time shot to boost the coffers of the city, made with the conditions, such as; that all future bond issues must be approved by voters, not just CC or CIC; that the voters must be queried at the ballot for the direction, methods or limits of development within the City? With such a huge new tax opportunity, the percentage would be set very low, like less than 1%. Would the flat % tax would be considered “fair”? Would this also meet the criteria of both A & B of post #6?

    BTW, I also learned that not only is property not reassessed for tax purposes when it is inherited within a family, Prop 13 protection can be used (or misused) by adding names to a title. In this way, by inheritance or gift, property ownership can be transferred over time without triggering a new tax valuation. Just closing these loopholes would have a huge effect Statewide. Would this also meet the criteria of both A & B of post #6?

    Comment by David Kirwin — October 23, 2008 @ 6:17 pm

  18. #17, I don’t like tax increases, either. You asked for ideas and I’m a sucker for that sort of thing, so I offered one in my usual offhand manner. It wasn’t a legislative proposal, it was an idea offered in the interest of furthering a discussion. So I accept any and all criticism, but it would be more interesting, I think, for people to offer other ideas as an alternative to picking apart what was not intended to be a comprehensive solution. The basic idea is to allow for adjustment to the property tax during ownership, while putting in place limits that prevent the type of situations that led to taxpayer revolt in the first place, along with reform.

    Comment by Mike Rich — October 23, 2008 @ 9:11 pm

  19. Here are some more off-the-cuff ideas to help spread around the tax burden more equitably:

    -Eliminate Prop 13 protection for all property besides a property owner’s primary residence. This would affect owners of commercial properties and owners of vacation homes.

    -Eliminate the ability to transfer the property tax basis for inherited property. I could see maybe excluding property inherited by spouses of the dead owner (to use the politically correct term).

    -Raise the annual amount by which taxes can be raised from the current 2% to the increase in cost of living. The same measure that is used for Social Security payment increases could be used for this, eliminating the argument about the poor old people on “fixed incomes.”

    If all of the above were implemented, state and local governments would get a heck of a lot more than they do now. Maybe we could even afford to pay for that exotic luxury, decent public education. Maybe it would even be enough to stop gouging people who had the poor judgment to be born after the days of cheap home prices.

    Comment by Jill — October 23, 2008 @ 9:58 pm

  20. Thanks Jill and Mike

    Comment by DK — October 23, 2008 @ 10:17 pm

  21. Jill,

    Your first bullet point would cause the increase to pass through on rental property. On the one hand, most landlords jack rents along with the market and pocket the savings on tax, but you have to wonder whether that would insure even higher rents, so it’s hard to know where to draw that line.

    As a renter in 1979 I voted against Prop 13. As a home owner in 2008 I appreciate that my taxes aren’t as high as Lauren’s, but wonder how we could have cut the baby in half. My parents paid the increased tax assessments over their twenty year mortgage and beyond without being bled to death, but that was not in California, and started back in the day when real estate had not become an insanely speculative market. Supposedly 20% of the real estate in our state which is in foreclosure was bought purely for speculative purposes.

    Comment by Mark Irons — October 24, 2008 @ 8:43 am

  22. Mark,

    I think that if this proposal meant renters shared in the cost to fund services that benefit everyone, that is actually a good thing. What’s the logic in making property owners solely responsible for funding services that everyone uses?

    Jill

    Comment by Jill — October 26, 2008 @ 3:59 pm

  23. # 22

    I think what Mark’s saying is, just like corporations, rental property owners pass on expenses (including taxes) to their customers.

    If that’s true, renters already share the costs you speak of.

    Comment by Jack Richard — October 26, 2008 @ 4:08 pm

  24. If there is a need to increase city revenue because our city managers cannot manage our budget without additional taxes, why shouldn’t renters feel some of the burden too? Is that a bad thing?

    Comment by David Kirwin — October 26, 2008 @ 6:23 pm

  25. I am not that sympathetic to the whole anti-tax crusade, but I do kind of wonder, where would public entities be right now if the speculative real estate bubble had never taken place? What if tax revenues continued to rise at the usual, predicted, whatever level prior to the RE bubble? The “loss” of tax revenues now is really in the same league as the “loss” of wealth experienced by home owners.

    I am sympathetic to the schools as well (and who wouldn’t be), but here again, what if homeowners were willing to pay $180 or even (god forbid) $240. I think the authors of Measure H knew that wouldn’t fly, so they kept it at $120, let the discussion focus on the squawking over that, and then went after the small property owners for the rest of the money, knowing it would have no real effect on the vote.

    Comment by DL Morrison — October 26, 2008 @ 8:08 pm

  26. Correction: small business owners.

    Comment by DL Morrison — October 26, 2008 @ 8:10 pm

  27. # 24

    I think what Mark’s saying is, rental property owners pass on expenses (including taxes) to their renters.

    If that’s true, renters already share the costs you speak of.

    Comment by Jack Richard — October 26, 2008 @ 4:08 pm

    Comment by Jack Richard — October 26, 2008 @ 10:06 pm


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