Capitol Alert

The latest on California politics and government

MC_REALTOR_04.JPG

The revival of California's economy and a rising housing market mean some hefty property tax increases for homeowners, the Legislature's budget analyst believes.

When property values were dropping sharply during recession, county tax assessors adjusted tax rolls downward, which then lowered property tax bills. Many property owners also applied for reductions.

The average homeowner saw a $1,600 property tax cut while those for commercial property averaged $7,500. "In total, temporary property tax reductions depressed local government property tax revenues by an estimated $7 billion in 2013-14, amounting to a 15 percent reduction statewide," the Legislative Analyst's Office (LAO) says in a new report.

But with a rising market, the LAO says those cuts are being rescinded, as state law allows, and some property owners may see tax increases as high as 20 percent. It notes that home values rose statewide by 12 percent in 2012, but those increases were not immediately reflected in property tax bills.

Proposition 13, passed by voters in 1978, limits annual increases in taxable values to 2 percent, but state tax law also allows temporary decreases in those values to be fully recovered later if the market increases. Increases of up to 20 percent were reported during the 2013-14 fiscal year, based on the 2012 market rise.

"Looking ahead, property tax payments for many owners that received temporary property tax reductions during the real estate crisis could increase by more than 10 percent annually for the next several years," the LAO said. "These increases likely will cause local property tax revenues to grow swiftly over the next several years as well."

The taxable value decreases were heaviest in communities — mostly in inland areas — that had felt the sharpest effect of the housing industry meltdown. Stanislaus County saw the steepest decline in home sale prices, 65 percent, and tax assessments were reduced for 51 percent of the county's properties, so it could see the one of the biggest upticks.

The $7 billion reduction in local property tax revenues also affected the state budget because the state was required to make up the schools' losses of about $3.2 billion. Therefore, the increases in property values and property taxes not only are increasing revenues to local governments but reducing the state's constitutionally required level of education spending.

PHOTO: Real estate agent Pat Quan, of Coldwell Banker, puts flyers in front of one of his home listings in El Dorado Hills on Oct. 9, 2013. The Sacramento Bee/Manny Crisostomo



FOLLOW US ON FACEBOOK

More Capitol Alert

Capitol Alert on Twitter

FOLLOW US | Get more from sacbee.com | Follow us on Twitter | Become a fan on Facebook | Watch Bee news, lifestyle videos | View our mobile versions | e-edition: Print edition online | What our bloggers are saying

Popular Categories

Categories


May 2014

Sun Mon Tue Wed Thu Fri Sat
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Monthly Archives


Latest California Clips