Bloomberg "Editor" Mark Tannenbaum

RE:  http://www.bloomberg.com/news/2011-10-17/california-diminished-by-1978-tax-revolt-shows-u-s-in-decline.html

California Diminished by Tax Revolt of 1978 Shows How U.S. Invites Decline

Q

By Christopher Palmeri - Oct 16, 2011 9:01 PM PT

. . .

RIDER COMMENT:  Remarkable.  You publish a 2,000 word anti-Prop 13 "news" story without a single quote from a supporter of Prop 13.  Not one!   Apparently your reporter called the usual liberal California suspects to get the requisite quotes desired to validate your deeply flawed thesis. 

I will be circulating this story via my blog and on Facebook as a classic example of the bias of your "news" service.  People need to be clear that Billionaire Bloomberg has simply set up a Big Government propaganda mill pretending to be a news organization.

The only thing I liked about your article was that it didn't make the slightest pretense at impartiality or objectivity.   Such clumsy writing deters even the apologists for the liberal media from defending such blatantly biased "journalism."  Obviously it's not a commentary, as the author is listed as a "reporter."

BTW (not that you care), here's a piece I put together last year that destroys your core hypothesis that Prop 13 starved CA governments for revenue.  Also below that is a comparison of CA with the other states -- note the high taxes in CA.

========================

A Defense of Proposition 13 Property Tax Revenues

by Richard Rider, Chairman, San Diego Tax Fighters

10 July, 2010                                                                    

Blog:  www.RiderBlog.Not.Long.com

When it comes to gathering sufficient property taxes, Prop 13 is no problem at all – except for profligate spenders.  Look at the history of my San Diego County – a history which pretty much reflects the history of property taxes in the urban/suburban counties that hold over 90% of California's population.  

According to the SD County Tax Assessor, in 1977 – the year BEFORE Prop 13 took effect – our countywide property tax revenue was about $639 million.  For this past 30 June concluding 2009-2010 fiscal year, our county assessor reports revenues of $4.596 BILLION.  For every property tax dollar collected in 1977, the county this last year collected $7.20.

During that time frame, our county population has grown about 85%, and inflation has gone up about 260%. Hence property tax revenues today are substantially higher than the bloated PRE-Prop 13 year, even after adjusting for inflation and population growth.

For 2008, California was ranked 14^th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states.  But CA property taxes per home were the 10^th highest in the nation that year.

http://www.taxfoundation.org/taxdata/show/251.html   and    http://www.taxfoundation.org/taxdata/show/1913.html

 

To see how CA ranks against the other states on various taxes and other economic factors, go to: www.RiderBlog.NotLong.com and read the latest updated version of my fact sheet “Breaking Bad – CA vs. the other states.”

 

 ***

It turns out that, under Prop 13, property tax revenue is FAR more stable than our other forms of tax revenue.  Income tax revenue is plunging, and sales tax revenue is dropping.

But property tax revenue seldom goes down AT ALL.  Since the year Prop 13 passed, San Diego County property tax revenue has ALWAYS gone up – every year – until this 2009-10 fiscal year.

The SD County Assessor reports that real estate property tax revenue for the fiscal year ending June 30, 2010 is down – but only 1.0%. This in the 4^th year of California’s real estate meltdown.  The year before, real estate property tax revenue was actually up 4.1%.  Not one person in a thousand knows this – the press has not (yet) covered these amazing facts.

Revenue is up because Prop 13 has the little-known added benefit of smoothing out real estate property tax revenue from year to year.  Most properties this year (generally those purchased prior to 2003) had their property tax go up 2%.  Add to that the resales, property improvements and new structures (which establish new tax assessment levels), and the revenue stayed rather constant in the teeth of our economic downturn.

Consider what happens without Prop 13 protection:  In the real estate boom years from 1998 through 2005, property taxes would have SOARED.  (Even WITH the Prop 13 limitations, San Diego County property tax revenue collection during this period STILL rose 111%.)   But then in the last four years, dropping property values would have caused a dramatic plummet in property tax revenues – revenues that governments would now be hooked on – just like we see with our volatile sales taxes, and especially with our erratic income tax revenues. 

—30—

===========================================

Breaking Bad:  California vs. the Other States

by Richard Rider, Chairman, San Diego Tax Fighters

Version 1.781            Revised: 6 October, 2011              

Updated version online at:    www.RiderBlog.NotLong.com      

Email:  RRider@san.rr.com               Phone:  858-530-3027       

Facebook blog page:    www.Facebook.com/Richard.Rider        

 

Here’s a depressing but documented comparison of California taxes and economic climate with the rest of the states.  The news is breaking bad, and getting worse (I keep updating this fact sheet):

California has the 3^rd worst state income tax in the nation.  9.3% tax bracket starts at $46,766 for people filing as individuals.   10.3% tax starts at $1,000,000.  

http://www.taxfoundation.org/files/bp59_es.pdf  

 

Highest state sales tax rate in the nation.  7.25% (as of 1 July – does not include local sales taxes)

http://www.taxfoundation.org/files/bp60.pdf    Table #15

 

California corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska.     http://www.taxfoundation.org/files/bp59.pdf     Table #8   – we are 8^th highest nationwide.

 

California’s 2011 Business Tax Climate ranks 2^nd worst in the nation – close behind New York state.

http://www.taxfoundation.org/news/show/26806.html

 

Fourth highest capital gains tax   9.3%      http://www.thereibrain.com/realestate-blog/capital-gains-tax-rates-state-by-state/109/

 

In virtual tie with CN and NY for highest gasoline tax (averaging 67.5 cents/gallon) in the nation, (July, 2011). 

http://www.api.org/statistics/fueltaxes/   (also CA has the highest diesel tax – 76.9 cents/gallon)

 

California is ranked 14^th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states.  But CA property taxes per owner-occupied home were the 10^th highest in the nation in 2009.

http://www.taxfoundation.org/taxdata/show/251.html     and  

http://www.taxfoundation.org/taxdata/show/1913.html

 

California’s 2011 “Tax Freedom Day” (the day the average taxpayer stops working for government and starts working for himself) is the 6^th worst date in the nation – up from 28^th worst in 1994, but down from 4^th worst in 2009.  CA “improved” only because of our state’s soaring unemployment rate – the new tax dodge!  

http://www.taxfoundation.org/research/show/387.html

 

California has the 2^nd highest state unemployment rate.  (August, 2011) – 12.1%.  National unemployment rate 9.1%.   National unemployment rate not including CA is only 8.69%, making the CA unemployment rate 39.2% higher than the other 49 states.    http://www.bls.gov/lau/

 

California needlessly licenses more occupations than any state – 177.  Second worst state is Connecticut at 155.  The average for the states is 92.    http://cssrc.us/publications.aspx?id=7707

 

For the 2007-08 school year, the Los Angeles Unified School District spent $29,780 per student.  The district also has the country’s second lowest graduation rate of 40.6%.       http://www.calwatchdog.com/2010/08/20/lausd-spends-30k-per-student/

 

CA public school teachers the highest paid in the nation.  CA students rank 48^th in math achievement, 49^th in reading.

http://www.lao.ca.gov/reports/2011/calfacts/calfacts_010511.aspx   page 36

 

1 in 5 in Los Angeles County receiving public aid.      

http://www.latimes.com/news/local/la-me-welfare22-2009feb22,0,4377048.story

 

California has 12% of the nation’s population, but 36% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 7 states combined.  Unlike other states, this “temporary” assistance becomes much more permanent in CA.            http://weblog.signonsandiego.com/weblogs/afb/archives/034662.html

 

California prison guards highest paid in the nation.          http://www.caltax.org/caltaxletter/2008/101708_fraud1.htm

                                                             
For every dollar California pays to D.C., we get back 78 cents. We rank 7^th worst. http://www.taxfoundation.org/research/show/266.html

 

California is the worst ranked state for tax administration – another anti-business factor.

http://www.sacbee.com/static/weblogs/capitolalertlatest/2010/03/cal-rated-worst.html

 

California now has the lowest bond ratings of any state, edging out Louisiana.    

http://tinyurl.com/CA-worst-bond-rating

 

The American Tort Reform Association ranks CA the worst state “judicial hellhole” – extremely anti-business.

 http://tinyurl.com/CA-worst-judicial-state

   

California is tied with 3 other states (Hawaii, Texas(!) and Florida) for having by far the least competitive property & casualty insurance markets.     http://heartland.org/policy-documents/heartland-institute-releases-new-property-casualty-insurance-report-card

 

America’s top 500 CEO’s rank California “the worst state in which to do business” for the 7^th straight year (May, 2011).

http://chiefexecutive.net/best-worst-states-for-business  (It’s worth reading the short article, and especially the part about California.)

 

California, a destitute state, still gives away college education at fire sale prices. Our community college tuition is the lowest in the nation.  How low?  Nationwide, the average community college tuition is about three times higher than California CC’s.   

http://www.hecb.wa.gov/research/issues/documents/TuitionandFees2009-10Report-Final.pdf      Chart 5 on page 8   

This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion.  In addition, 2/3 of California CC students pay no tuition at all – filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition.  http://tinyurl.com/ygqz9ls

 

On top of that, California offers thousands of absolutely free adult continuing education classes – a sop to the upper middle class.  In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense.       http://www.sdce.edu

 

Protests about increased UC student fees too often ignore one crucial point -- all poor and most middle class students don't pay the “fees” (our state’s euphemism for tuition).  There are no fees for California families with under $80K income.  Moreover, Pell Grants and federal tuition tax credits covered the total 2009-10 fee increases for nearly 3/4 of all undergraduates with household incomes below $180K.

http://www.universityofcalifornia.edu/blueandgold/  and    

http://www.universityofcalifornia.edu/news/article/22415

 

California residential electricity costs an average of 32.4% more than the national average (far higher in San Diego County).   For industrial use, CA electricity is 70.8% higher than the national average (May, 2011).

http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

 

It costs 38% more to build solar panels in California than in Tennessee – which is why European corporations have invested $2.3 billion in two Tennessee manufacturing plants to build solar panels for our state.  

http://tinyurl.com/llussb

 

California is now ranked as the 2^nd worst state to retire in.  Only basket-case Illinois is worse.  We “beat” NY, RI and NJ.

http://www.topretirements.com/blog/great-towns/our-worst-states-to-retire-list.html/

 

Consider California’s net domestic migration (migration between states).  From April, 2000 through June, 2008 (8 years, 2 months) California has lost a NET1.4 million people.  The cumulative net annual income lost from this 8 year out-migration comes to about $26 billion.  Net departures slowed in 2008 only because people couldn’t sell their homes.  In 2010 we lost “only” 72,000 net people to domestic migration.   Again, note that this is NET loss.

http://www.mdp.state.md.us/msdc/Pop_estimate/Estimate_08/table5.pdf  and  http://tinyurl.com/2010-CA-lost-72000   and  http://interactive.taxfoundation.org/migration/

These are not welfare kings and queens departing.  They are the young, the educated, the productive, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their pensions provide more bang for the buck. Some of these departing seniors are retired state and local government employees fleeing the state that provides them with their opulent pensions – in order to avoid the high taxes that these same employees pushed so hard through their unions.  And once they move out of California, our state can no longer tax their California-paid pensions.

 

As taxes rise and jobs disappear, we lose our tax base, continuing California’s state and local fiscal death spiral.  This downward spiral must stop NOW.

                                                                                                                             

NOTE:  To see the latest version of this “Breaking Bad” column, plus other taxpayer items of interest, go to my blog at www.RiderBlog.NotLong.com, or my Facebook page at www.Facebook.com/Richard.Rider.  This fact sheet also is available free upon request as a 2 page Word file for printing.