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Buffet to Bestor: Let's share the pain if
the Gov gets tough on Proposition 13
Original post made
on Apr 21, 2010
Jennifer Bestor didn't know what to expect last month when she mailed a rather whimsical letter to billionaire Warren Buffet about her research on how Proposition 13 has shifted the state's property tax burden away from commercial land owners. His subsequent response, though, has left the Menlo Park mother of a school-age son smiling — and energized.
Read the full story here Web Link
posted Wednesday, April 21, 2010, 12:00 AM
Posted by Jennifer Bestor
a resident of Menlo Park: Allied Arts/Stanford Park
on Apr 23, 2010 at 8:40 am
In 1978, both San Mateo County and Santa Clara County were 50% single-family residential and 50% commercial (industrial, retail, agricultural, and multi-family). By 2008, both had shifted to approx. 67% SFR/condo - 33% commercial. (In 2009, Santa Clara shifted back a bit, due to [a] the proactive reassessment of 90,000+ SFR/condos down to the current market value, and [b] an addition of an unidentified $1 billion of new improvements in property that had been bought a year before. Commercial properties were not proactively reassessed, so those of us who follow this stuff are waiting for the 2010 Annual Report, due out in three months.) The San Mateo information is available by request from the Assessor's office. I don't know if Terry updated it for 2009, since, by then, I'd decided to narrow my research just to Menlo Park's city school district.
I actually feel it's crucial to make the commercial-residential distinction because, otherwise, the majority of people seem to think that commercial property owners are paying an increasing (!) proportion of the lion's share (!) -- and that retirees and 'oldtimers' are dragging the system down.
This misperception makes it seem more likely to me that, if California crashes, Prop 13 will be revisited in toto, rather than surgically improved. The turnover in residential means that, now, over a third of Menlo homeowners and 48% of Santa Clara County homeowners have bought in the last ten years and are paying 10-20X what 25-33% of their neighbors are in taxes. So an ever larger proportion of voters is not getting what they're paying for -- and blaming the 'oldtimers.'
What I'm trying to highlight is the extent to which it is not oldtime residents, but rather commercial property owners, who are disproportionately benefiting ... and whose benefits will proportionally grow, given the legal ways such property can be held to escape reassessment. What amazes me is the way that 'oldtimers' have been stirred up to fall on their swords for commercial property owners.
When you commented on the original article, I actually looked up LVT and tried to figure out how it would work in Menlo Park. After a little work, I realized that understanding it would take a lot of analysis and assumptions. Looking at my street and just reapportioning the current tax against each parcel, I could see that 33 houses would pay more, four about the same, and 16 less than currently. (For the record, ours would pay $2358 less.) I didn't see that as a likely political winner.
Turning to commercial, even more would pay more (since even more are now paying less, if you know what I mean) and, most particularly, I could see that four-story office buildings would pay much less under LVT -- and the same as one-story office buildings. Given that higher-density buildings are bigger drains on public services (e.g., roads, firefighting), I just don't see this as even a long-shot win politically.
And, contrary to my public avatar (fame-seeking desperate OC housewife), I have no interest in being the Boadicea of Tax Revolt ... but would love to finish my will index for 1640 - 1740 Archdeaconry Court estates in Bluntisham-cum-Earith, Hunts. Instead, because I don't feel that the growing discrepancy between residential and commercial property should go unmentioned, I have strangers pinching my middle-aged tummy like a toddler's cheeks. Egads.