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School Funding and Prop 13 and California's Education Challenge

Original post made by a common myth, College Terrace, on Aug 23, 2009

This is a spin-off from the Star report thread. These two posts are really about the related but separate topic of California's education challenge, school funding and Prop 13.


Posted by a common myth, a resident of the College Terrace neighborhood, on Aug 21, 2009 at 7:38 pm

Another Parent -

The fact is that California is spending more per student now, in inflation adjusted dollars, than it did before Prop 13. It is simply false that Prop 13 caused reduced spending, because spending increased.

You may not think Prop 13 is fair, or may dislike it for other reasons, and you may believe California should be spending more on education, but Prop 13 did not result in a reduction in spending for education.

I personally believe that for what the schools are trying to do, which includes compensating for uneducated parents and dysfunctional families, along with dealing with English language issues, they don't have enough money.
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Posted by Another parent, a resident of the South of Midtown neighborhood, on Aug 22, 2009 at 12:11 am

To a Common Myth, Dollars spent per child is a meaningless way to measure what is being invested in education. As you point out, the job of educating students in this state has changed since prop 13 was enacted and therefore to try and educate children with the same resources doesn't make sense. I do agree that our schools are expected to not only teach the basics but overcome all those other issues as well, which, as I mentioned, are actually the responsibility of the parents. Having children is a huge undertaking and passing on the difficult parts to the school system is wrong however common it has become. But this our current reality and California schools are not funded adequately for the job. Prop 13 does create a host of problems while mitigating the problems of a few. We can and should do better.
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Comments (40)

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Posted by a common myth
a resident of College Terrace
on Aug 23, 2009 at 10:19 am

Another Parent -

We agree on a lot, here. I would like to frame the questions as how we should spend our money and how much money we need.

You can't just say that we need unlimited spending on education here now, and Prop 13 limits spending, therefore it creates problems. You must ask, "What should the limit on education spending be?" and "Has Prop 13 materially impacted that limit in the current structure of the budget and the way it limits education spending outside of Prop 13?"

Are dollars spent in our public school system, designed to educate, effectively applied to a need for better parenting? I don't think they are. How can the dollars be best spent to meet the need that ineffective parenting is creating?

It may be that money would be better spent educating parents, or in intervention programs separate from the educational system, or in family planning, or law enforcement, or drug abuse etc. It's a big problem. Would our elementary schools be competent to address this even if they had an infinite amount of money?

We could justify more money spent on schools or on this problem if we could show that the money is used effectively. But that isn't happening. We don't measure, report, or analyze impact of dollars spent on student attitude, stress reduction, patience, or self-discipline. And that is not the charter of the public school system.

II think we share the feeling that education is so important that we shouldn't scrimp on it. But I don't think it follows that we should pour infinite resources into our current public school system.

We have to ask, "how much?" and "how effective?"


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Posted by Walter_E_Wallis
a resident of Midtown
on Aug 23, 2009 at 10:25 am

Walter_E_Wallis is a registered user.

[Post removed by Palo Alto Online staff.]


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Posted by OhlonePar
a resident of Duveneck/St. Francis
on Aug 23, 2009 at 2:03 pm

Actually, Proposition 13 did lead to a HUGE drop in per-student funding. What happened is that the school systems started falling apart so badly that voters looked for other ways of funding schools and brought the funding levels back up to a certain degree--though our funding per student is relatively low--particularly when you consider the state's cost-of-living.

By the time funding had been picked up, a lot of damage had been done--i.e. in Palo Alto a third of the schools were closed, across the state facilities aged and deteriorated. New schools were a no-go.

And, yes, per-student spending *does* affect results. Anti-tax types love to bring up Washington DC as an example about how high per-student spending doesn't mean a thing. What they leave out is that there's a strong correlation in per-student-spending and educational achievement in the vast majority of cases. The Eastern Seaboard states spend on kids and have great schools. The South underspends and has dismal results.

Compared to other states and our pre-Prop. 13 rankings, we don't spend a lot on our kids.

ESL students are an issue in this state, but this is hardly the first time the public schools have dealt with educating immigrants. I do think a couple of things help--smaller disctricts and smaller schools. I think the relative success of some charter programs has to do with local investment and control.

In the private sector, you get what you pay for--not sure why people think that this isn't the case with public schools. Certainly, on some level we all believe that when we choose to live (and pay accordingly) in Palo Alto.


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Posted by Same old argument of emotion versus reason
a resident of Midtown
on Aug 23, 2009 at 7:14 pm

It is like saying that 70% of all people in car accidents had orange juice for breakfast sometime in the last week, and therefore OJ caused the accidents.

Again, we spend 30% more per student now than we did 30 years ago. Why are we producing much less educated children, roughly 48th or 49th in the nation?

In real estate it is location, location, location. In education I would say demographics, demographics, and expectations.

Think DC, the highest per student spending in the nation, and ...51st out of the 51 in output.

Sorry, money simply isn't the problem there, is it?

There is the separate issue of NOT capping taxes Prop 13 style, resulting in ever escalating taxes as housing prices ( used to) quadruple every 20 years,so that after 40 years of owning a home, one is entering retirement with more than 8 times the taxes one originally thought one would pay and having that pretty much match your retirement pay...what is an elderly to do but be forced to sell and move out of state?

We could let housing taxes rise with the value of the home, I suppose..as soon as we enact that law, the value of the houses drop even more than they already have in California, as home buyers are willing to spend even less.

How about going back to basics, and not passing kids from grade to grade until they have mastered a minimum level? How about going back to the way it was when were number one, and guess what? No music and drama and PE teachers in elementary school. It was read, write, math drilling,..and for all the complaining about how horrible our education was, somehow we did a heck of a lot better job then with the kids.

Of course, no special ed, virtually no ELL, and virtually no after school day care. Kids went home to Moms, snack, play, then homework, dinner, bed.

Demographics, demographics, demographics ( and how we spend our school day)


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Posted by Walter_E_Wallis
a resident of Midtown
on Aug 23, 2009 at 8:05 pm

Walter_E_Wallis is a registered user.

Much of the divisive social engineering has had the negative effect of ghettoizing the ones it is supposed to help, justifying ethnic studies at the expense of core curriculum, sometimes by denigrating the once majority culture. Had government grown at the rate established by 13, there would be no disparity.


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Posted by Anarchy, State, and Utopia
a resident of Duveneck/St. Francis
on Aug 23, 2009 at 8:29 pm

It is extremely misleading to argue that the school spending has increased 30% (in inflation adjusted) reflects an increase in the amount of resources provided to students. In case you haven't noticed, wages (especially California wages) and retirement funding have increased much more that 30% in real terms since 1978. Since the vast majority of school cost are wages for teachers, administrators, and other services, the amount or resources spent on each student has decreased.

Examples of increased school spending that does not lead to increased performance does not support the conclusion that increased spending is useless. There are far too many factors involved to logically arrive at that conclusion, e.g., the assets of the parents in community, crime levels, drug use, the availability of qualified teachers, the way money is spent, etc.

There are many ways to deal with the "problem" that increased tax revenues would send too much money to the schools. Many school districts (outside of California) have a school tax that is separate from the property tax. Annual school budgets are passed and the bill is paid for by taxes (proportional to property value) that are determined by the budget.


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Posted by OhlonePar
a resident of Duveneck/St. Francis
on Aug 23, 2009 at 9:03 pm

Same old,

Nah, correlation may not be causation, but it doesn't mean that there's no link between the two. Our kids are educated in schools and various factors are strongly linked to better results, some of those take money.

The DC example shows that money isn't everything. Doesn't mean it's irrelevant either. DC, by the way, does not have the highest spending per pupil--it's third, after New York and New Jersey.

Of course, computing the numbers only makes sense when you factor in cost-of-living. $40,000 per annum buys you a nice house in Utah and won't pay the rent in Palo Alto.

Demographics create an uneven playing field, but that hardly makes money a nonissue. That's a sort of sloppy wishful thinking.


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Posted by a common myth
a resident of College Terrace
on Aug 23, 2009 at 10:58 pm

"Since the vast majority of school cost are wages for teachers, administrators, and other services, the amount or resources spent on each student has decreased."

Don't teachers, administrators and other services count as resources for our students?

What would you consider resources spent on our students to be? Textbooks?


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Posted by a common myth
a resident of College Terrace
on Aug 23, 2009 at 11:20 pm

"our funding per student is relatively low"

Please support this. I believe it to be a myth. California enjoys greater economy of scale than any other state. This includes a lot of HR substance around teachers, largely driven by unions. And resource centers and opportunities for teachers funded privately and publically.

The standard of living is so low for many Californians that their best meal is school-paid lunch. Even if you sustain visceral hatred for Prop 13 and think the funding is coming from elsewhere, that does not support this statement.


"And, yes, per-student spending *does* affect results."

Again, please support this. I believe this to be a myth. The money is often thrown at exploratory programs, attempts to handle problems the education system is not set up to handle (family dysfunction), and reworking content and delivery so that it appears to be politically correct. The result is counterproductive; the additional resources often actually work against effective teaching and reduce the effectiveness of the education system.

Parents with more money tend to talk more to their kids and encourage and support them more. Makes them better students. Their schools show good test scores. That doesn't mean more money would help the schools of parents who don't talk to their kids enough and don't encourage them and don't support them as much.

It's easy to claim that other people's money will fix the problem, hard to apply limited resources in an effective way that actually does fix the problem.


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Posted by Mike
a resident of Crescent Park
on Aug 24, 2009 at 12:22 pm

The cry for increases in spending/student is a union message. As mentioned above, there are numerous examples to disprove the asserted direct relationship (i.e. Wash DC) between spending and results.

The cost for wages and benefits has increased dramatically at public schools over the last 20 years.

Look at many charter schools to see that superior outcomes in terms of student scores and college admissions can occur with less (not more) spending, but changes in other areas of focus.

At the request of a friend who helps fund local charter schools I discussed incentive compensation plans as used in the tech industry with the executive educator who is building a plan to offer incentives for teachers who improve students' scores. I think that is a productive path.

Even Obama, despite the obvious union bias, seems to as well or he would not have put the Federal program in place to give grants to states offering teacher incentives. Now our state needs to undo the law specifically forbidding it.


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Posted by Paul
a resident of Downtown North
on Aug 24, 2009 at 3:18 pm

"The cry for increases in spending/student is a union message. As mentioned above, there are numerous examples to disprove the asserted direct relationship (i.e. Wash DC) between spending and results."

So, if we make our teachers work for nothing, all the students will be Einsteins?


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Posted by Mike
a resident of Crescent Park
on Aug 24, 2009 at 10:55 pm

Paul,
How in the world do you jump to a conclusion like that from what I stated?

If what you say above were true, it would absolutely support the idea of a direct relationship between spending and results-an inverse one.


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Posted by Paul
a resident of Downtown North
on Aug 25, 2009 at 11:41 am

"Paul, How in the world do you jump to a conclusion like that from what I stated? If what you say above were true, it would absolutely support the idea of a direct relationship between spending and results-an inverse one."

Au contraire. If you understood statistics you'd know my scenario is a quite possible outcome if no causal relationship in fact exists. It's called an outlier. Many people like to front favorable outliers as the norm, as with your Washington DC example. (It's cited all the time, BTW) Many people fall for the trick. As the man said: lies, d--- lies, and statistics.

Now then, do you really believe your thinly veiled implication that we could spend less and get more? Heck, I'd be ecstatic to achieve that little miracle just at my neighborhood gas station.



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Posted by Mike
a resident of Crescent Park
on Aug 25, 2009 at 12:33 pm

Paul,
My 'implication' is not 'spend less and get more'. It is 'spend the same or less, and get at least the same.'

I do not believe that throwing in more money is the cure for every education problem or goal. However many do believe that more money for increased teacher compensation is always the cure, and that is not our current problem.

Outliers are called such for a reason. They often are used to help explain away discrepancies in flawed theories.


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Posted by Paul
a resident of Downtown North
on Aug 25, 2009 at 1:01 pm

"My 'implication' is not 'spend less and get more'. It is 'spend the same or less, and get at least the same.'"

Spend the same, get the same: Normal causality, right? Spend less, get at least the same: Be sure to tell us how you make that work at the local gas pump. The cops usually call it 488.

"They [outliers] often are used to help explain away discrepancies in flawed theories."

But far more often to promote flawed dogmas.


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Posted by a common myth
a resident of College Terrace
on Aug 25, 2009 at 7:49 pm

Paul -

By comparing this to the price of gas, you seem to be arguing that you always get more when you pay more, and only get more when you pay more.

But this is just not true.

You do not get more by paying more for medicine, if it is the wrong medicine. Many times, even if it is the "right" medicine.

Corporations do not get more of a contribution to profit or growth from an IT department that spends more than those of other corporations.

These are not outliers, rather, they point out that when it is not obvious to the key stakeholder how to obtain results from an activity, service, or product, and there is a large and complex delivery mechanism for the results, it's easy for agents in the mechanism to take money out of the system without providing any value to the end result.

That's why it's possible to spend more money on education without seeing any benefit, and why some people think we can reduce the money spent without hurting results. And why some people think spending more money is not the answer to improving our education sysetm.


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Posted by pat
a resident of Midtown
on Aug 25, 2009 at 8:42 pm

"common myth": You make valid points about spending vs. benefits.

There are lots of theories and "I thinks" in these posts. How about some real data? A quick search brought up:

Table 1. Summary of Public School System Finances for Elementary-Secondary Education by State: 2005-06
Web Link
This shows DC was third in spending.

US Department of Education Institute of Education Statistics at Web Link

Has anyone in the CA education system talked to states who rank in the top 5 to find out what they're doing to make their systems work? Or is there just a lot of thrashing going on, e.g., arguing over textbooks or new math vs. new new math or blaming the teachers' union or blaming the parents or .?

Obviously there are states that know how to educate their kids. Why don't we just ask them how they do it?


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Posted by a common myth
a resident of College Terrace
on Aug 25, 2009 at 10:50 pm

Pat -

Thanks for acknowledging the possibility that money does not always equal results. It's true that we are armchair analysts here. It's hard to get enough real, unspun data regarding California's public education system to support understanding the whole.

I think your question is a case in point on money not always yielding results.

"Obviously there are states that know how to educate their kids. Why don't we just ask them how they do it?"

I would be very surprised if there is not money in the California public education budget allocated for this and spent on this. I would be shocked if there have not been expense reports filed for travel for this specific purpose. Probably including travel to Hawaii and also to other countries to learn about how their schools are so effective.

Yet we seem not to have seen the benefit.


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Posted by pat
a resident of Midtown
on Aug 26, 2009 at 9:20 am

I don't understand why parents aren't marching in the streets with torches and pitchforks. There are union rallies and gay rights rallies and political rallies – all important. But education -- the most personal issue and the bedrock of our country – doesn't get much in the way of public outcry. WHY NOT?

Why aren't parents rallying in Sacramento demanding answers?


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Posted by Paul
a resident of Downtown North
on Aug 26, 2009 at 3:50 pm

"Corporations do not get more of a contribution to profit or growth from an IT department that spends more than those of other corporations."

Finally, a definite statement. But why do you believe return is completely decorrelated from investment? What failed school taught you that? You certainly didn't learn it in the real world.

And note this conundrum: Our schools have been allegedly failing since 1955, when "Why Johhny Can't Read" came out. And our current education critics are products of those "failing" schools. What could they know about proper education?


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Posted by a common myth
a resident of College Terrace
on Aug 26, 2009 at 4:44 pm

Paul -

We are degenerating to ad-hominem arguments, I prefer to avoid them.

I have previously acknowledged a correlation between money and school output. Basically, families that provide better support for students tend to live in places that provide more money to schools.

I am trying to open the minds of those who think the only way to improve our schools is to throw more money at them. I don't agree that in our current public education system more money will result in more effective education.

You have two children, one a spendthrift and the other an investment genius. You will give more money to the spendthrift; the genius doesn't need it. Is there a correlation between your financial investment and your financial return?



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Posted by Paul
a resident of Downtown North
on Aug 26, 2009 at 5:29 pm

"We are degenerating to ad-hominem arguments, I prefer to avoid them."

Me too. That's why I focus on ideas, not people.

Maybe you are referring to my non-person-specific conundrum. Everyone I challenge tries to deflect. If you have a response I'd like to see it.

Now, your argument is that "families that provide better support for students tend to live in places that provide more money to schools." Presumably these families are reasonably intelligent. Why would they give more money to their schools knowing it makes no difference, that they could buy the same education for less? Could they be astutely investing in their schools to help their children? Palo Alto does that consistently and well.

"You will give more money to the spendthrift; the genius doesn't need it. Is there a correlation between your financial investment and your financial return?"

The question is badly posed: who would give money to a spendthrift expecting a financial return? However, savvy private equity firms have gotten very wealthy by cannily investing in undercapitalized enterprises.


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Posted by Another parent
a resident of South of Midtown
on Aug 27, 2009 at 4:14 pm

Another Myth, Do you have some ideas about how to go about improving the education children are getting without spending additional money? In Palo Alto we already have many parents volunteering in many classrooms doing things teachers used to do such as grading papers, working with small groups, leading projects, setting up computers, cleaning, organizing, etc. I remember having a room parent in grade school who brought in a batch of brownies from time to time but not one parent ever spent time in the classroom. We have PIE and PAFE on top of our high property taxes. Each semester we write many checks to pay for things like lab fees, special notebooks, gym clothes. In my day these were provided by the school or we did without them. So why do the dollars spent per child, if adjusted for inflation, not match up with what the children receive? I believe there are countless additional costs associated with running a school than in my day. Building codes are far more stringent, many a rule has been made and must be followed and that costs money. From earthquake safety standards to fire prevention measures, all this adds up. Add in Tinsley, whereby Palo Alto must educate children from other communities, who may not be paying into the system, a penalty for having worked so hard and succeeded. Now throw in the extra time that is now occupied with teaching multiculturalism, catching up ESL students, enforcing peanut bans, political correctness, and reworking the math curriculum ad nauseum and you have few classroom hours to spend on the three rs. In my case, I had a bare bones primary education, for the most part dull, uninspiring, and disheartening. To try and learn in that environment was to exert the full force of my will just to stay awake during the tests. High school was similarly tedious and perfunctory. I'd trade it for the problems we have here in a heartbeat. However, in all its argumentative, irritating, contentious weirdness, somehow when my kids go to school they are presented with a wonderful array of engaging, colorful, challenging, mind expanding experiences. In spite of all that is wrong here, they do learn and this is why I'm happy with their STAR test results. Now we return to what matters the other 364 days out of the year - everything else!


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Posted by a common myth
a resident of College Terrace
on Aug 27, 2009 at 11:06 pm

Another Parent -

I think we could benefit from a measure of longitudinal progress in students. The biggest problem from my point of view is vacuuming money in order to provide higher average scores as output, when the input to the system includes so many non-native English speakers and children from dysfunctional families relative to what's required for a successful school experience. Let's define progress and measure it for individuals.

As I see it, Palo Alto is in a separate world from the overall Prop 13 and educational funding issue in the state. The students in Palo Alto are not nearly so difficult to educate.


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Posted by Elena
a resident of South of Midtown
on Aug 28, 2009 at 2:14 pm

It would be interesting to do the analysis of all Palo Alto properties cost values to see how much Prop 13 is costing Palo Alto. I know you can look up any property taxes at County of Santa Clara, Tax Collector's Office website and figure out what cost basis they are calculated off. I looked up property taxes for all houses on our short street of 1950-ies track houses, all pretty much the same, and was shocked at how big is the difference in property taxes paid. We bought our house 5 years ago and pay $17,000 a year while all of our neighbours pay between $2,000 - $5,000/year. Most are not the original buyers of the houses, they inherited them from parents or trusts, several do not even live there but rent the houses out.
I did not realize that Prop 13 protects against value increase of all properties, not just primary residencies. But it seems rather unfair to see a family of lawyers or doctors moving in the inherited house and pay such low property taxes. Hope the decent Palo Alto beneficiaries of Prop 13 make up by donating bigger $$ amounts to schools and communities.


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Posted by Another parent
a resident of South of Midtown
on Aug 28, 2009 at 3:56 pm

We also pay a very high property tax compared with our neighbors. It seems unfair to be paying this much when the neighbors benefit from the increase in property values which is a direct result of the schools that we are paying for, but are not expected to contribute much to them. Also I agree that the next generation in the home, who are in the same job market as we are, are paying so much less than we while sending their children to the school we are funding. It is just not fair. And no, I doubt very much that they are making up the difference by donating to the schools!


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Posted by a common myth
a resident of College Terrace
on Aug 28, 2009 at 10:28 pm

I'm glad there is interest in discussing Prop 13.

I have my own views on it, and would like validation or enlightenment, in whole or in part.

I think it is fair, because everyone knows what their tax is and the limit on how much it can be. I think a tax that forces people out of their homes because their neighborhood has become expensive is unfair.

Someone moving into California now gets the result of the efforts of those who previously bought here. Everyone steps on the train with the same rules.

I agree that inheritance is a perturbation and don't know what to make of the ability to sustain low property taxes while increasing the cost basis of inherited property to market value for capital gains purposes. I guess the thinking is that one ought to be able to work their whole life in order to provide something more for their children, rather than to provide something more for a famous movie star to spend as he sees fit.

But mostly I see Prop 13 in the context of taxation overall. I see three main avenues for tax in California: income tax, sales tax, and property tax. Income tax and sales tax can be arbitrarily raised by transitory governmental representatives to any level the state determines to be necessary. Prop 13 limits the increase in property taxes.

Income tax and sales tax take money from those who are earning a lot or spending a lot even if they own very little; property tax takes from those who own a lot even if they earn very little or spend very little.

In a sense then, a bias away from property tax rewards those who save or invest by allowing them to increase home asset value more than asset tax. These people do not help the short term economy. A bias against income tax rewards those who help the short term economy by generating income; a bias against sales tax rewards those who help the short term economy by spreading their wealth. Obviously, we don't have these last two biases.

For long term economic stability, those who save and invest provide the backbone of the economy by ensuring there is capital to help generate income and eventually enable those who pay sales and income taxes. I don't know if it follows that the savers and investors should reap tax benefits to help the state economy, but maybe they should.

This whole analysis ignores the putative allocations of these various taxes, and I think it is appropriate to ignore them because the state government moves money from one pocket to another as gracefully as a pick-pocket.


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Posted by Another parent
a resident of South of Midtown
on Aug 28, 2009 at 11:21 pm

That is all too true about the state government. And I agree with you about the main concepts you outline. However, the people in Palo Alto who are sitting on properties worth millions when they paid thousands for them, and who will then sell them for a giant profit or leave them to the next generation who will perpetuate the disparity between what they pay into our city and what people like me pay are not pulling their weight and are reaping huge benefits at the expense of the rest of us. The reality is that the infrastructure, including schools, police, transit, roads, etc., cost a huge amount and they are not paying for it. I agree they should not have to lose their homes because they have increased in value. However I also do not agree that they should not pull their weight in the community. It is just pie in the sky to believe people are entitled to a free ride for many many years and on into eternity. The gap should be narrowed enough that those of us who have only been here ten or fifteen years are not paying a hugely disproportionate amount. It simply isn't fair and it isn't working.


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Posted by a common myth
a resident of College Terrace
on Aug 28, 2009 at 11:54 pm

Would the overall scheme be fair if property tax protection ended at death?

Also, if I remember right, part of the reason for Prop 13 was disgust at an inability of our state government to curtail spending.

Which is the stronger objection, that Prop 13 is unfair, or that the government needs more money?


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Posted by OhlonePar
a resident of Duveneck/St. Francis
on Aug 29, 2009 at 12:37 am

Common myth,

No, it wasn't outrage at government spending. The real spur was a system of frequent property assessments that resulted in frequent property tax increases. So not how the money was spent, but on how much was collected. Property owners were paying increasingly higher taxes as a result of a real-estate boom.

And as a lifelong Californian, I've been adversely affected by Prop. 13--it helped wreck the schools, which means I had to wait and wait before I could afford to buy in a decent school district. And, since I had to wait, I pay a lot in property taxes.


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Posted by Goose Watching Gander
a resident of Barron Park
on Aug 29, 2009 at 8:26 am

Common,

"I think it is fair, because everyone knows what their tax is and the limit on how much it can be." You seem to be saying that any tax is fair, provided that you know what it is in advance. So, for instance, you'd be OK with a system that doubled the property taxes of anyone with a Z in his or her name. Sorry, I'd have to agree with Another parent here: The system is unfair and most people are not pulling their weight.

If we feel it is unfair to turf out retirees on fixed incomes because of property taxes, the fix should be to turn those taxes into a lien. The whole thing of passing the property to kids or grandkids is pure scam.

Obviously, I have not been living here for 20 years, and I am one of those who shoulders the burden for his neighbors. Although I moved here for the schools, I make it a point to give absolutely nothing to PIE and vote against every additional tax burden benefitting schools (the last one is particularly egregious since it is pegged to property value).


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Posted by Ada
a resident of Midtown
on Aug 29, 2009 at 12:39 pm

Why do you think Palo Altans vote for additional taxes for schools and libraries and the like - because they are pegged ot property values and most palo Altans have low cost basis, so of course they say yes to these measures, because it $100/year for a library bond is not as big of a deal for them as $1,000/year for those of us who have market value cost basis. If the propositions were changed to a fixed amount, perhaps such measures won't get such an overwhelming approval rate.


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Posted by Another parent
a resident of South of Midtown
on Aug 30, 2009 at 8:42 pm

Goose, I agree with you. And Myth, having the property tax boondoggle end at death would be a start. On the one hand, people who work hard and want to leave their children something have the right to do so. On the other, letting them continue to live on the backs of those of us who have not been so fortunate as to inherit such a skewed situation is just wrong. It's enough that they inherit a property that has inflated in value. Inheriting a tax on it from yesteryear hurts our city and our schools and me.


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Posted by a common myth
a resident of College Terrace
on Aug 31, 2009 at 9:45 am

Paul -

"You seem to be saying that any tax is fair, provided that you know what it is in advance. So, for instance, you'd be OK with a system that doubled the property taxes of anyone with a Z in his or her name."

This objection is not fitting. Equal treatment is a given and is a separate matter from visible impact or predictability. Prop 13 doesn't care if you are old or young, rich or poor, can afford the house you bought or not, doesn't care about skin color, sexual preference, racial or ethnic history, doesn't care if you're smart or stupid, have a "z" in your name or not. Everyone buying a house at a given time gets the same treatment by Prop 13.

Here's a way to see the point: Which mortgage agreement is more fair: 1) the terms can be changed arbitrarily by the lender at any time without limit; 2) the terms can be changed depending on described circumstances subject to pre-established limits?

As I see it, you are essentially arguing that a house is (or should be treated for tax purposes as) an investment rather than a home. So you think when the value goes up a lot the taxes should go up a lot, too.

Would you think Prop 13 would be fair if it applied only to owner-occupied homes?


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Posted by Another parent
a resident of South of Midtown
on Aug 31, 2009 at 3:39 pm

Myth, When the cost of running a community rises, it is up to all members to carry their share of the burden. I am not suggesting that we make the taxes equal for all, only that it not be so outrageously out of balance. When we bought our current home, we were not guaranteed that our taxes wouldn't go up. They go up any time the assessor chooses to value our home at a higher price. In fact, the assessor claims we have an extra bedroom which has never been in our home, so we are taxed for that as well. Since the value is relatively high already, our taxes are outrageous and an increase is huge compared with what our neighbors have to adjust to. Again we are being penalized and made to shoulder their share simply because of our timing. To add to this, when they leave a home to their children, those children inherit this same exemption from responsibility for their share of the costs of having a community. I suggest there must be a way to spread the responsibility more fairly without bankrupting anyone. I'm certain that with creative thinking this can be done. Prop 13, while well intentioned has created a situation that is not only unfair, but is bleeding our communities dry for the benefit of a few. These few seldom turn around and donate more, rather they keep this boondoggle in the family, allowing others to provide for them. It does not engender positive feelings among neighbors.


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Posted by Unpleasant Extrapolation
a resident of Duveneck/St. Francis
on Aug 31, 2009 at 5:20 pm

The ability of homes that are taxed at very low rates to be rented to families with school age children places a tremendous burden on the school system. Revenues are effectively capped, while the expenses can be increased without limit. At some point Palo Alto must cease to be basic aid district.

Prop 13 has created many landlords who are free-riding on the financial backs of more recent purchasers.


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Posted by a common myth
a resident of College Terrace
on Aug 31, 2009 at 8:42 pm

Well, I think that the several posts articulating how unfair Prop 13 is represents a view held by many.

OP thinks Prop 13 was not driven by outrageous and unlimited government spending; do these people who see Prop 13 as being unfair think that it should simply be repealed? Unlimited property tax increases with money "borrowed" for whatever purpose politicians choose just like we are seeing with PA utilities?

I personally am in favor of limits on tax increases, but completely agree the limits should be fair. And I agree that fairness has emotional, cultural, and intuitive components. I want to limit tax increases not just because I want to pay less tax; but primarily because historically civilizations with high taxes go bad. The people just don't live well enough to be creative and motivated, and learn to hate their government.


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Posted by Another parent
a resident of South of Midtown
on Sep 1, 2009 at 10:19 am

Myth, It does seem that we agree on the main points. I don't think a mindless repeal of 13 is the answer. The basic idea behind it was sound - when given a blank check, politicians will expand the spending until everyone is overtaxed beyond a reasonable limit (for a lovely example you have only to look at the bill(ions) for the current wars). Since 13 does exactly that with regard to people in my situation, and people who need to buy property here, for us it results in what you mentioned:

"The people just don't live well enough to be creative and motivated, and learn to hate their government." and I might add, 'those of their neighbors who receive a free ride.' Actually, I don't hate my neighbors - who can blame them for taking advantage? However I would support a change in the rules that eliminates the huge disparity and brings them more in line with their contributing neighbors. We are not hapless victims of our government. It is up to us to shape the laws and taxes in ways that work the best for all.


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Posted by OhlonePar
a resident of Duveneck/St. Francis
on Sep 1, 2009 at 2:31 pm

common myth,

It's not what I think--I was there and I know what people were complaining about--an overly efficient assessment situation. People thought very little about what the costs of Prop. 13 would be--there was no debate whether we were spending too much on our schools or freeways. It was all centered around people feeling that they were getting socked by high property taxes because the market value of their homes was rapidly increasing--even though owners didn't benefit from this unless they sold.

If there had been no real-estate bull market, there would have been no Prop. 13.

I favor a change to the state constitution which would time-out propositions. In other words, Prop. 13 would have to "pass" every ten years. A good law would, a bad law wouldn't. The voter proposition situation has led to many sloppy mindless laws over the years and it's screwed up the state government pretty seriously. I knew Arnie came in that he wouldn't be able to fix it, the problems are severe and structural. As it is, the state's ungovernable at a certain level.

And Prop. 13 benefits long-term property owners--and that means they're more likely to be older and more affluent. And white as it happens because of the way the state's population has changed in the last 30 years. It's intrinsically unfair because it almost guarantees that two properties with the same market value will not have the same property tax. Knowing that a system is skewed doesn't mean it's suddenly fair. Commercial property owners benefit the most--more likely to be long-term owners (particularly if the owners incorporate) and able to charge market value rents while still paying low property taxes.

Prop. 13 benefits the few at the expense of the many--that's kind of the definition of unfair.



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Posted by a common myth
a resident of College Terrace
on Sep 1, 2009 at 10:54 pm

OP -

It's what you think. I was there, too. Heard of Howard Jarvis? I recall the tax revolt aspect of the issue.

By the way, the impact on schools is what you think also. I saw the rapid degradation of Santa Clara Unified in the 70s, before Prop 13 passed. More recently, it has recovered nicely although it's been living with Prop 13.

A school system invests in long term programs, rules, processes, etc. and adopts values that take time to manifest themselves as quality education or poor quality education. If the money is gone, school quality gradually ebbs, if it ebbs at all. The schools were already poised for degradation, or already degrading, when Prop 13 passed. And I don't think the problem was money.

It may be that "Prop 13 killed our schools" is the best way to look at it. But it's not the only way for informed, thinking people to see it.

Do you consider housing prices to be as unfair as property taxes? Is it equally unfair that someone has to pay 10x now what someone else had to pay for the same house 20 years ago?

I agree that Prop 13 introduces skews, such as encouraging long term property owners. I happen to think that particular skew is a good thing (other things being equal), it promotes a long term view of community and individual property; it behooves owners to add genuine value as opposed to doing the kind of thing house flippers do.

I think rent control does the same thing. (It usually doesn't actually keep overall rents low. It's usually a lot like the Prop 13 scene, with neighbors in identical units paying vastly different rents. But it encourages long term living arrangements).

I also agree that propositions (and legislated laws) should time out, including Prop 13. But is there some way to prevent an anomaly caused by bad timing, such as an expiration during a depression or boom?


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