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So I got a lot of shit for damning the California Proposition 13. Understandable. Most people would perceive this as a threat to their “home”.. or that I am proposing a bigger government.

Consider this. Local schools are funded by the property taxation revenue. If you live in a shitty neighborhood and thus cheap properties, tax revenue is gonna be small. Thus, decreased revenue for the schools. I am not advocating that more money solves the problem in the US, well California anyway, education system. (In fact, I think more money leads to more problems, even for schools. Instead we should raise standards for teachers and students.)

The current slide in the real estate market is a perfect example of how prop 13. is the dumbest taxation ever. Shrinking property value means shrinking property assessment, thus shrinking tax revenue. During the real estate boom, schools get more money. During bust, they get less.  BUT… do teachers and students need less things or resources b/c the real estate market is sliding? Of course not. Do they need MORE things when the market is going up? Nope.  (Do proponents of prop 13. even think that students even KNOW if there’s a real estate boom or bust?) Take a look at this article:

Declining assessed valuations will have several impacts.

In the 12 counties surveyed, the tax roll was down more than $68 billion combined, which translate into at least $680 million in lost tax revenue at the state’s basic 1% tax rate.

Since that basic rate can’t be adjusted, a declining tax roll will impact general fund revenues for cities and counties.

A declining roll has the potential to affect local school districts and governments that have issued or plan to issue general obligation bonds, which are backed by voter-approved property tax pledges above the 1% rate. It could lead to potentially unpopular decisions to increase the tax rates, or to the deferral of issuance that has been authorized by voters.

A tax roll drop would also roll up to the state budget. The state guarantees minimum per-student spending levels for K-12 education that for the vast majority of school districts is higher than their property tax receipts, meaning lower school district tax receipts could increase the state’s funding share.

Yeap, because of 13, the schools in those counties will get less AND the people there will have to pay more taxes because of idiot, financially illiterate bureaucrat dickwads who don’t understand how debt works… yet decide to put the burden on the people that voted those idiot fatcats into office.