Established in 2006 to reward informants for reporting unreported transfers of real estate and the underpayment or property taxes, San Francisco’s Real Estate Watchdog Program has resulted in 62 “referrals,” of which only two (2) were deemed to be eligible over the past five years and resulted in $1,074,349 in additional property tax collections and $66,000 in rewards (up to ten percent of the underpaid amount).
With a five year trial term, the Watchdog Program officially expired this past February. Tomorrow, San Francisco’s Board of Supervisors will vote on an ordinance extending the program for another five years while reducing the maximum payout per referral from $500,000 to $100,000 based on the Assessor and Controller’s belief that “a reward of up to $100,000 will sufficiently incentivize watchdogs.”
No word on any program for simply identifying reported transfers which the Assessor’s office has seemingly never gotten around to reassessing.
∙ San Francisco Board Of Supervisors Agenda: 3/8/11 [sfbos.org]
∙ Ordinance Extending San Francisco’s Real Estate Watchdog Program [sfbos.org]
ahhhhhhh…… the kapo program.
Just repeal prop 13 already!
I know this is totally off topic, but this morning on NPR the oil industry was stating how a new proposed severance tax is unfair because the already pay property taxes. Of course they ignore the fact that those property taxes are essentially frozen at 1978, unless it’s a newly acquired land, greatly reducing any tax burden.
Of course the ability of companies to merge or acquire each other without every actually changing ownership of the property puts a wrinkle even in that strategy.
Which of course is just another in a long string of examples of how prop 13 really screws any CA resident or business that wasn’t here when it passed.
You don’t need to be a property owner in CA prior to Prop 13 to benefit. Plenty of people/entities who bought before the late 1990s run-up (and almost two decades into prop-13) are reaping prop 13 benefits.
Nice “Rockwell” reference!
This has nothing on the Dodd-Frank whistleblower provisions.
Benefits like IOUs from the state, elementary education cuts, higher tuition at U of CA schools, fewer police, cuts to fire prevention programs, inadequate roads, rail, bridges?
You mean those benefits?
Is it really a benefit for the state to pay market rate wages to maintain sewer, gas, and electic lines but for property owners to pay taxes to maintain these things as if it was the 1990’s, 80’s, or 70’s in 2011?
Look I understand why people don’t want to give up Propr 13. I mean if I can be garunteed all the same government services my brand new neighbor gets but I pay 50% less in property taxes it’s like government services on clearance for me.
But is it good policy?
And I know, I know … “But without Prop 13 grandma and grandpa would have to downsize into something smaller!” Fine, once someone reachs retirement age lock the property taxes. But don’t let them pass on that value to their kids or grandkids and certainly don’t let corporations (that never die) benefit as well.
This would be known as expanding the base, which would then allow for a lower tax rate. Something conservatives are always arguing is good for the economy, business, and individuals.
Instead we are wasting money of some whistle blower program which we wouldn’t need if CA just had normal property taxes like the other 49 states.
Are you guys seriously arguing that Prop 13 should be repealed?
At the risk of sounding like a grump.
California politicians are among the most corrupt, and fiscally un-disciplined in the world.
I could literally spend a month documenting the waste and inefficiency for you….and yet…..I doubt you would believe it.
So go ahead…..keep yelling for the repeal of prop 13…..it ain’t gonna happen. At least not until we have a new batch of leaders in place…and they have proven thru their deeds that they can be trusted.
“Are you guys seriously arguing that Prop 13 should be repealed?”
Of course it should. It’s overbroad and doesn’t actually achieve what people think it achieves. What Prop 13 really does is redistribute money from newer buyers who have higher valuations to corporations and older buyers (and their heirs) who have extremely low valuations. In addition, it takes away local control from local governments, whom the people have better control of, and gives it to state legislators instead. This has made our school systems go into a downward spiral, among other local services.
If we wanted to keep grandma in her house, there are better and more efficient ways to do it. If we wanted to constrain state budgets, there are better and more efficient ways to do that as well. Prop 13 does almost nothing well and does most everything badly.
I don’t begrudge anyone keeping their own money. Take it away from them in taxes and it just goes down a rat hole.
All the BS about “services”. What services?
All the BS about “services”. What services?
Police
Fire
Jails
Roads
Bridges
Rail
Hospitals
Ambulances
Sewers
Water Treatment
Courts
Public Parks
Earthquake monitoring
Schools
the thing about the parrots who always trumpet “waste, fraud, and abuse” is that they never get to specifics. It’s because they are either totally ignorant as to what government actually funds or they are just making noise for the sake of making political hay. The fact is that there is very little “waste, fraud, and abuse.” It’s really nonsense. And of the “common man’s” view of what might constitute “waste” is actually a very small percentage of government budgets, whether here in SF or at the state or federal levels. And cutting these “frivolous” things amounts to nothing. The fact is that no one wants to take on the big programs or realize that things cost money. For instance, the biggest shares of the federal budget is made up of Social Security, Medicare, and Defense, the last of which is probably the only legitimate source of “waste, fraud, and abuse” in the american government at any level. If we stopped paying Halliburton billions, there’d be a lot more of our own money to go around. And at the state level, if we stopped pouring all our money into locking up a higher and higher percentage of the population, the state would be much better off.
Even if the parrots who are always trumpeting their refusal to paying taxes because their money will be “squandered” due to “waste, fraud, and abuse” actually get to specifics and identify the “waste, fraud, and abuse” they want eliminated, it always, always amounts to just a “sparrow belch in the midst of the typhoon” (tip of the hat to former Senator Alan Simpson, who coined that phrase for another context).
“Even if the parrots who are always trumpeting their refusal to paying taxes because their money will be “squandered” due to “waste, fraud, and abuse” actually get to specifics”
That is very true. Even when someone talks about earmarks, we’re talking about a drop in the bucket, compared to actual items that could be reformed. Think agriculture subsidies, stupid Cold War-style defense spending (as opposed to modern warfare), etc. Earmarks are a tiny percentage of our budget at about $10B in 2010’s $3.6 trillion budget, and even so, they don’t always add new spending, but rather dictate to the executive branch where already authorized spending must go:
http://thehill.com/homenews/house/71951-11-billion-in-disclosed-earmarks-expected-in-fiscal-year-2010
For too long, the “government wastes all our money” people have gotten away with their misleading statements, without having to identify actual solutions. It’s easy to complain, when you’re not the one who has to actually do things.
Also, hyperbole like “California politicians are among the most corrupt, and fiscally un-disciplined in the world” doesn’t really help. 🙂 Surely one can think of a more corrupt government than even our Sacramento overlords.
The parrots who cite “that there is very little ‘waste, fraud, and abuse,'” never cite specifics but are good at calling other people ignorant.
I’ve spent some time on this topic– will be back tomorrow with specifics if time allows.
It’s a great country and state . . . and city. But efficient? are you serious?
Kudos to BDB and sfrenegade; I completely agree. Unfortunately, I don’t think Jerry Brown can be the one to lead a repeal effort given that he was the governor when Prop 13 passed.
I pay more taxes than BDB and sfrenegade and their families all put together, yet they feel virtuous in demanding ever more.
While you may pay a higher dollar amount, if true, I doubt you pay a higher effective rate.
Assuming you do fall into the top twenty percent, if you make more then me you easily do, then it is clear that your income and tax burden has been dropping since 1979 and that you sir, have no clothes
In 1939….
just sayin’
Systems like this encouraging “reporting” on others are Fascist.
Just sayin’
Socialist … Fascist … Obama. What’s the difference, really?
Yeah, reporting tax evaders is just like what the facists did in 1939…
***
I have relatives that live out of state and they just had their property taxes raised significantly from last year because of one sale nearby that the assessor used to say the value of the land under their houses just increased by 30% yoy. There was a reason the voters got fed up with the property tax system and voted in prop 13. Now its been exploited a bit and needs some changes but I wouldn’t want a blanket repeal of it.
Canceling prop 13 for corporations and anything other than primary residences would go a long way towards fixing some of it’s most egregious problems… But I’d prefer it were eliminated entirely… Although then the money should go directly to the cities and counties rather than the state
hmmm wrote:
> the thing about the parrots who
> always trumpet “waste, fraud, and
> abuse” is that they never get to
> specifics. It’s because they are either
> totally ignorant as to what government
> actually funds or they are just making
> noise for the sake of making political
> hay.
Let’s just look at SF…
The two gardeners that work for my parents do more work in a day than the Union gardeners in Golden Gate Park typically do in a week. Why don’t we put the park gardening contract out to bid and save millions?
My SF cop friends all make close to $200K and since most only went to Junior College they are not good at writing, yet they are forced to spend about half their time on the clock writing reports (not going after bad guys with guns). Why don’t we let the cops give oral reports on to a memory chip and pay a $15/hour clerk to type them up and save millions?
In the late 90’s I walked through the Protrero Hill projects that were getting renovated at a cost of about $250K a unit with all union labor (a friend’s Dad gave a ton of cash to Willie Brown and got a no bid contract to do some of the electrical work). Why not hire a non union private firm to do the same or better work for half the cost and save millions.
I could go on all day…
P.S. If you want to get some hard numbers on waste look at the cost per foot of any government funded new construction in SF. On average they are about double the cost of a private building to cover all the kickbacks…
Attacks on the government are more often than not orchestrated by people with a clear agenda: squeezing taxpayer’s money into private hands, promising better bangs for the bucks.
Where does this come from?
Apart from the ideology, pushed by a few very influential billionaires who bought themselves a party and the news conglomerate that comes with it, there’s something else at play.
This country was built by pushing towards the next frontier. Settlement, Independence, Expansion, Infrastructure, Freedom, Space, Information.
The US is mostly all built up and population growth will not have the effect it used to have before. Emerging (actually: EMERGED) countries are eating up most of the world’s natural growth. The reason we still have 2-4% average growth is because of innovation. There’s always a next frontier to conquer, but it is mostly knowledge-based.
It shouldn’t be a surprise to see that people who benefit from these advances are in the Blue states. Red states are mostly left out, apart from a few exceptions. They are our own personal emerging market.
The only chance at growth in less qualified and less knowledge-based domains is by privatizing most pieces of the government and doing a one-time fire sale. Then what? The same guys that have been pushing for privatization will own what the community used to own. Privatized army? Privatized roads? Privatized police? 100% privatized retirement? The new owners will decide who deserves the services and at what cost. I am pretty sure it will not come cheap. Think the HMO f@ck-up expanded towards every part of the government. You think we have red tape today? Just wait and see what private entities without any constraint for service will deliver.
Does your parents yard have 13 million visitors a year? Do they have homeless encampments? Does their yard have an aging infrastructure? How many cars park in the back yard, on a Tuesday let’s say? Hauling away hedge clippings from your folks backyard does not equate to maintaining a large park.
If your SF cop buddies are making close to $200k, isn’t it because they are working at least 10-20 hours/week Overtime? As for hiring typists, wouldn’t be easier to just buy voice recognition software?
As for the no-bid contract, they are like the sightings of Bigfoot, often talked about, but when looked for they never seem to be there. His dad may have gotten a “last look” from Willie, which is also illegal but not surprising.
You complain about public contracting, but need to do more research. Every day the engineer estimates are being bid at 60-70% lower cost. People say this stuff costs too much money because of Davis-Bacon which was reportedly penned by the unions.
That is also not true, Davis and Bacon were Republicans, one a Senator and former Sect of Commerce, and the other a Representative. The Law was signed by a republican president, Herbert Hoover. An excellent overview is available here:
http://digital.library.unt.edu/ark:/67531/metadc26044/m1/1/high_res_d/94-408_2007Nov30.pdf
The law was enacted to prevent unfair competition to contractors, with labor being a secondary beneficiary.
In my opinion, if you want to see waste in our system, look no further than the 6% realtors charge for walking paerwork through their office.
IMHO, the real problem with property taxes is not whether or not they are limited. The problem is that they exist at all, as they are a tax that you pay over and over just because you happen to own something. They should be replaced by some sort of local income tax, so that the tax can be based on actual income.
No taxing system is perfect, including income taxes, but income taxes are at least better than taxing you just because you happen to choose to own something, and worse, based upon the value of that thing you own.
There are all sorts of arguments about how property taxes are supposed to support the local government of where you live, but that could arguably be achieved through a local income tax instead.
At a minimum, if there has to be a property tax, it should be a flat tax, or based on number of residents, or lot size, or something like that. Just because the value of the property you happen to own went up or down, it shouldn’t change how much you must support the local government.
There are all sorts of arguments about how property taxes are supposed to support the local government
This is only the second-best argument for a property tax system. The best argument is that it strongly encourages efficient utilization of property. How many blighted, seemingly-abandoned properties have you seen that could be put to much better use? If only there were a little bit of pressure to do something useful with these…
“I pay more taxes than BDB and sfrenegade and their families all put together, yet they feel virtuous in demanding ever more.”
I doubt it, but I guess we’ll never know.
“How many blighted, seemingly-abandoned properties have you seen that could be put to much better use?”
Since such blighted properties would probably have a low value, a property tax based on value would only seem to have a modest effect on that. In some ways, it would encourage you to let them become even more blighted, since the worse shape they’re in, the less you have to pay.
Since such blighted properties would probably have a low value
Relative to other properties, you should be right about that. Too bad that Prop. 13 distorts this reality.
This is a defect of Prop. 13, not of the concept of property tax.
“This is a defect of Prop. 13, not of the concept of property tax.”
I disagree. It is a defect of having a tax on the value of something you own. Such a tax by definition encourages you cause the value of that something you own to be lower and discourages you from doing things that increase it’s value.
As I said originally, if there must be a property tax, it would be better if it would be a flat tax or based on lot size, building size, or some other more accurate measure of the impact that building has on the local government. That way, even if the building became “blighted” you would still be paying the same tax, thus encouraging you to do something with it.
It seems that Prop 13 could be modified in such a way as to cause much less damage. Let the annual increase raise to CPI-U without any caps. That way the revenue to govt would increase based upon an inflationary rate and it would not be left to some arbitrary assessor. If a local community felt the need to increase revenue, do so through the ballot box.
At the same time, if Prop 13 were modified it would be essential to abolish or modify rent control to accomodate the increased costs of property owners.
there’s nothing more wrong with property taxes than there is with income taxes.
Your idea of flat tax, or lot/building size based tax punishes owners of lower value properties.
Example:
2 homes, exact same lot size, same building size, same condition, one in Pacific Heights, another in Bayview would be taxed exactly the same, even though one is worth much more than the.
“fairness” can certainly be argued with regards to taxes, but this seems much less fair than value based.
I like the idea of inflation limited adjustments. It allows one to have a reasonable idea of how ones taxes will change, but not artificially limit the change to a number well below reality as prop 13 does.
“That way, even if the building became “blighted” you would still be paying the same tax, thus encouraging you to do something with it.”
That’s not how it works. Productive use of property is encouraged by a tax based on value. If you have to pay more, you need to engage in more productive use. A flat tax is closer to what Prop 13 is, and it encourages property owners to have empty or underused properties to just sit, rather than sell them to someone who would do something productive. crazyme is exhibiting a fundamental misunderstanding of taxation theory.
“I like the idea of inflation limited adjustments. It allows one to have a reasonable idea of how ones taxes will change, but not artificially limit the change to a number well below reality as prop 13 does.”
Right, but if your problem is the size of government, trying to put an inflation limitation on property tax is not helpful. Attack the source of the problem first, which is the politicians and their spending.
I’m fine with (in fact I’d prefer) a complete repeal of prop 13 and have prop taxes based purely on value. I mention the inflation adjustment as what I think would be a reasonable middle ground (when combined with eliminating prop 13 entirely for all non-primary residence and corporate owned properties).
“crazyme is exhibiting a fundamental misunderstanding of taxation theory.”
That’s funny. So you say that if I have to pay more tax the more something is valued at, that will somehow encourage me to make it even more valuable so that I have to pay more tax? I would say that you misunderstand plain old human nature.
“2 homes, exact same lot size, same building size, same condition, one in Pacific Heights, another in Bayview would be taxed exactly the same, even though one is worth much more than the.”
That’s exactly how it should be, of course. Just because I own a house that is valued at more than yours, why should I have to pay more tax for that reason alone? I should only have to pay more tax if my house is for some reason more of a burden on the government or the city than yours. If our houses are the same externally, but mine is all top rate inside by my choice, whereas yours is all cheap and rundown inside by your choice, thus making mine “more valuable”, why should I pay more taxes than you? Doesn’t seem particularly “fair” to me.
it will encourage you to use it, or lose it (AKA sell it to somebody who does want to use it).
Also, just letting a property deteriorate does not mean it’s value will go down, as if neighboring properties are improved it can put upward pressure on yours as well.
“Just because I own a house that is valued at more than yours, why should I have to pay more tax for that reason alone?”
Your idea is a regressive tax (i.e. more impact on the poor). As I said, one can argue fairness all day long, but your strategy seems less fair to me (and I suspect the vast majority of people).
“If our houses are the same externally, but mine is all top rate inside by my choice…”
you seem to have missed the “same condition” part of my example.
I’ll be happy to agree that taxes should be dramatically reduced from where they are, and that many services that are being provided would be better provided by private parties, or are completely unnecessary, but in my opinion the tax reductions should be targeted towards the middle class more than the wealthy.
It’s fairly well documented that the wealthy actually pay a lower marginal tax rate than the middle class, and that the wealthy have grown their wealth in relation to the middle class, and continue to do so.
crazyme — you still don’t understand ad valorem taxation. Flat taxation encourages unproductive use of land. You are mischaracterizing what I said. If you have ad valorem taxation, you encourage productive use of assets and discourage concentration of ownership. Instead of a Pacific Heights house staying empty because of a trivial amount of property tax required, you encourage someone to either rent it out or sell it to someone who will use it. Instead of grandma living in a 5 bedroom house, a family gets to live there. Etc.
Furthermore, if you think people are too stupid to realize that investing in their property results in a higher resale value, I think you’re the one misunderstanding human nature.
“it will encourage you to use it, or lose it (AKA sell it to somebody who does want to use it).”
The mere fact that there is a property tax will do that. My only point is that the fact that the property tax is based on valuation will NOT do that… in fact it may tend to counteract that. You seemed to be asserting the fact that the tax is based on valuation would somehow encourage someone to increase a place’s value, which is what I find questionable.
“Your idea is a regressive tax (i.e. more impact on the poor)”
It is no more regressive than any other fee that you have to pay to the city that is not based on income. Would you have the fees for parking stickers, meter prices, water and sewage service, and all other services the city provides also be based upon the value of what you happen to own?
“you seem to have missed the “same condition” part of my example”
Not at all. I was just giving an example of a case where basing the tax on valuation results in unfair discrepancies. (Unless you consider it “fair” to charge people more simply because of the value of the things they happen to own.)
“The mere fact that there is a property tax will do that.”
Nope.
“My only point is that the fact that the property tax is based on valuation will NOT do that… in fact it may tend to counteract that.”
Nope.
“I was just giving an example of a case where basing the tax on valuation results in unfair discrepancies.”
Nope.
I think what crazyme is missing is that there’s a difference between productive use and simply increasing the value of a property. If I put in solid gold toilets, I may very well increase the value of my property, but I likely won’t engage in any additional productive use.
In contrast, I am saying that “blight,” while it may result in lower property values, is a symptom of unproductive use of property, regardless of value.
“crazyme — you still don’t understand ad valorem taxation”
Oh, I understand it, I just don’t agree with it, as it results in what I consider fundamentally unfair taxation. If you think it is proper to do that (in your case, because you’re want to do social engineering by encouraging the use of properties for the purposes that you believe that they should be used for by penalizing people who don’t fit into your goals), then that’s fine. I’ll just disagree with that goal and we can leave it at that.
“Furthermore, if you think people are too stupid to realize that investing in their property results in a higher resale value, I think you’re the one misunderstanding human nature.”
No, I don’t think I’m that stupid. I just don’t think having a property tax based on valuation is in itself going to encourage someone to improve a property, as not many people are usually motivated to do something that will cause their taxes to increase. They’ll only do it if they think there’s a net gain. So, it may encourage them to do some things, but may discourage them from doing others. The only issue is whether that is an appropriate goal of taxation and whether property taxes should be such a big part of support for local goverment.
“whether property taxes should be such a big part of support for local goverment”
Except that in California, due to Prop 13, property taxes do not play a big part of support for local government. Sales taxes do.
You seem to think increasing the value of property for the sake of increasing value of property is a worthwhile goal. I think productive use of property is far more important. I’m willing to agree to disagree.
Sure we’ll agree to disagree. However, a small parting comment on:
“You seem to think increasing the value of property for the sake of increasing value of property is a worthwhile goal”
Not sure how you arrived at that conclusion. You’re the one who wants to encourage “productive use” (whatever that means to you). I don’t have any desire to encourage anything. I don’t particularly care whether the property changes in value or not. I just don’t think someone should have to pay more (or less) taxes simply because it did.