How to read your property tax bill

By Jon Coupal | Californians are keenly aware that we bear a heavy tax burden.

Progressives claim that the tradeoff is low property taxes, but that’s just not the case. California ranks 17th out of 50 states in per capita property tax collections. What can be said about Proposition 13 is that it has made property taxes reasonable, not low.

A weekly column by Jon Coupal

For most property owners, tax bills were due last week and many were surprised that the increase was more than they anticipated. But that isn’t because Prop. 13 isn’t working, it’s because there are far more items listed on property tax bills than ever before. It’s important that taxpayers know how to read their property tax bills.

When reviewing your tax bill, the best place to start is to pull out last year’s bill and do a side-by-side comparison. For most California counties, the property tax bill will show three categories of charges. They are the General Tax Levy, Voted Indebtedness and Direct Charges and Special Assessments.

The General Tax Levy is what most people think of when talking about property taxes. It is based on the assessed value of land, improvements and fixtures. This charge usually makes up the largest portion of the tax bill and it is the amount which is limited by Proposition 13.

The annual increase in the General Levy of Assessment should be no more than 2 percent, unless there have been improvements to the property, like adding a room to the house. However, if a property had previously received a “reduction in value” reassessment under Proposition 8, the taxable value may go up more than 2 percent to reflect the recovery in the market value. But remember, in no case will the taxable value be more than the initial Prop. 13 base year plus 2 percent annually from the date of purchase.

The second category of charges is Voted Indebtedness.

To read the entire column, please click here.

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Do your own digging

By David Crane | Some Americans yearn for what they believe were the good old days of journalism when — so it is believed — citizens could rely on journalists to uncover lies. But for every Watergate, multiple events went undiscovered.

Vietnam is one example. While the New York Times and the Washington Post published the Pentagon Papers in 1971, seven years earlier they failed to uncover, much less report, the lie about a supposed attack in the Gulf of Tonkin that President Johnson used to justify US troop expansion in Vietnam. Over the next four years journalists buried or failed to discover more information. Not until 1968 — after the death of 30,000 American soldiers and countless Vietnamese — did the country’s leading journalist, Walter Cronkite, start telling viewers the truth.

Another big lie not uncovered by journalists took place in California in 1999 when state officials passed a bill (SB 400) granting a massive retroactive increase in pension benefits to government employees and temporarily hid the consequences through the use of a deceptive accounting technique. Over the next two decades, pension liabilities quadrupled:

To meet those liabilities, schools, local governments and the state have had to lay off teachers, understaff police, fire and other departments, and seek higher taxes. Meanwhile, other pension plans without similar liability growth that have participated in the same investment markets as California’s pension funds — including the recessions of 2001–3 and 2008–9 — are doing fine, exposing yet another lie that pension costs are rising as a result of market declines or Wall Street shenanigans. The shenanigans behind California’s exploding pension costs are SB 400 and deceptive accounting.

Of course, some journalists are excellent at digging, but citizens should get in the habit of doing their own digging, too. It’s not just tweets and posts that deserve skepticism.

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Bait and switch on public employee pensions

By Dan Walters | Local officials, particularly those in California’s 400-plus cities [including Fullerton], have been complaining loudly in recent years about pension costs, raising the specter of insolvency if they continue their rapid increase.

Last year, the League of California Cities issued a report declaring that “pension costs will dramatically increase to unsustainable levels.”

The California Public Employees Retirement System (CalPERS) confirms that projection in a new report.

The report reveals that mandatory “employer contributions,” including those from the state and school districts, as well as local governments, rose from $12 billion in 2016-17 to $20 billion a year later.

It also warns that the payments will continue to rise well into the next decade as the giant trust fund tries to recover from dramatic investment losses in the Great Recession, adjusts to lower earnings projections and handles a surge of baby boomer generation retirees claiming benefits.

“The greatest risk to the system continues to be the ability of employers to make their required contributions,” the new report declares, adding, “It is difficult to assess just how much strain current contribution levels are putting on employers. However, evidence such as collections activities, requests for extensions to amortization schedules and information regarding termination procedures indicate that some public agencies are under significant strain.”

Pension costs for “safety employees,” police officers and firefighters mostly, are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.

However, as much as they complain about CalPERS forever dunning them, California’s local officials are largely unwilling to directly ask their voters for more taxes to pay pension bills.

Hundreds of local tax increase measures were placed on the ballot last year and hundreds more are likely to be proposed next year, but almost universally they are billed as improving popular local services, such as “public safety” or parks [or in Fullerton, to fill potholes].

It’s where the concept of “fungibility” kicks in. If a city’s voters can be persuaded to raise their taxes for parks and recreation [or street repair], for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.

We saw a wonderful example of fungibility last year in Sacramento, where voters were persuaded to raise local sales taxes on the promise of civic improvements by an amount that closely matched increases in the city’s obligations to CalPERS.

We may be seeing another in Oakland next year.

The Oakland City Council is placing a “parcel tax” — a form of property tax — on the March ballot to improve parks, recreational and homeless services and stormwater drainage. The tax, $148 annually per real estate parcel, would generate an estimated $20 million a year.

As it happens, however, the most recent CalPERS report on Oakland’s pension obligations reveals that they will increase from $194 million in 2020-21 to $226 million by 2025-26, which would more than consume the revenue from the parcel tax.

So why don’t city officials just own up and publicly acknowledge that pension costs are driving their budgets into red ink and ask voters for more tax money to cover them?

They — and the unions that finance tax increase campaigns — clearly fear that being candid would backfire. If voters knew they would be paying more taxes to support pension benefits for city workers that are probably much better than they have themselves, they might refuse to go along.

Bait and switch is more politically expedient.

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Habitat for Humanity presents homes to Fullerton families

Three families spent nine months working alongside volunteers to build their own homes, which are sold to them at a discount. Dedication of the homes was held Saturday. Christine Kim reported the story for NBC4 News.

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Another California tax revolt

By Jon Coupal | While 1773 and 1978 may seem like they have nothing in common, both years go down in history books as two famous taxpayer revolts.

A weekly column by Jon Coupal

The Boston Tea Party’s protest on December 16, 1773 by American colonists sent a strong message to Britain that Americans would not take taxation sitting down.

Fast forward two centuries later, inflation and property taxes were skyrocketing 3,000 miles away from the Boston Harbor.

Families were being pushed out of their homes because their property taxes were unbearable, and a taxpayer revolt was brewing in California.

On June 6, 1978, California voters overwhelmingly passed Proposition 13, which tied property taxes to one percent of the purchase price and capped annual increases at two percent a year, bringing certainty to homeowners and businessowners by allowing them to predict their property taxes long into the future.

Sadly, California politicians have forgotten about the taxpayer revolt that occurred just over four decades ago.

To read the entire column, please click here.

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True to form, California lawmakers ignore dark pension clouds

By Steven Greenhut | It’s been a little more than 20 years since the California Legislature passed, and Gov. Gray Davis signed, Senate Bill 400, which granted 50-percent pension hikes to employees of the California Highway Patrol. The law’s clear intent was for every other California agency to follow its model. They mostly did [Fullerton included]. So, these pension deals spread across the state like a contagion – leaving a debilitating level of pension liabilities that threaten to obliterate city and county budgets and push some less affluent localities toward insolvency.

Steven Greenhut

The legislation granted the pension increases retroactively, which meant that government employees didn’t just gain these additional benefits beginning on the day of its passage. The increases were granted back to the day the employee started on the job, even if it were 30 years ago or more. This was more than your garden-variety gift of public funds, but it passed overwhelmingly on a bipartisan basis, and with virtually no public debate. Those few officials who raised red flags were derided, even though their warnings were prescient.

Lawmakers apparently gleaned a cynical – but useful – lesson from Orange County’s bankruptcy, which took place five years earlier. (Its 25th anniversary was last Friday.) In that debacle, Treasurer Bob Citron had brought in unbelievable returns for the county investment pool by leveraging assets to make investments tied to interest rates. He was betting on lower rates. It all worked perfectly, until it didn’t – and then the Fed’s rising rates led to what was, at the time, the largest municipal bankruptcy in U.S. history. County officials had enjoyed the windfall and seemed angriest at the few voices who warned about the coming unpleasantness.

What’s the lesson? It’s best summarized by the great Baltimore journalist, H.L. Mencken, who wrote, “The men (Americans) detest most violently are those who try to tell them the truth.” In other words, don’t level with the public, especially if you have plans for higher office. Tell everyone what they want to hear – or at least stick to the rosiest scenarios. Promise people something for nothing, and by no means take on the role of a Cassandra.

During the SB 400 debate, supporters said it wouldn’t cost taxpayers a dime because of ongoing boisterous stock-market returns. The California Public Employees’ Retirement System (CalPERS) promised that “no increase over current employer contributions is needed for these benefit improvements.” It would mostly be funded from excess returns on retirement systems that were so awash in cash that they really – I swear – had no other choice but to give it away to their union friends.

To read the rest of the column in the Orange County Register, please click here.

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Good news, bad news about California

By Jon Coupal | A son once told his father that he had both good news and bad news and asked his dad which he would like first. The father said, “Give me the good news first.” So the son says, “The good news is that the air bags in your car work perfectly.”

California is a state with both good news and bad news. The good news is that we remain an economic powerhouse with the world’s fifth largest economy, the Bay Area remains the epicenter of venture capital, we have a diverse population, great climate and recreational opportunities that are unparalleled.

Yet despite all this good news, California still feels like a state in decline. High taxes, heavy regulations, business flight, crumbling infrastructure, a housing crisis and seemingly insurmountable problems with our vast homeless population are the issues that confront us every day in the headlines.

Much of the discussion about what is good or bad about California is anecdotal. For example, we all know friends or family members who have moved out of California to escape its high cost of living. And every day we hear about another company, either large or small, which has pulled up stakes because it can no longer tolerate California’s anti-business environment.

To read the entire column, please click here.

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Hidden agenda in masquerading big bond measure

By Jon Coupal | In a bit of irony, this March there will be a Proposition 13 on the California statewide ballot. But unlike the landmark taxpayer protection of 1978, the Prop. 13 of 2020 will put taxpayers on the hook for $27 billion.

There’s another big difference between Prop. 13 (1978) and Prop. 13 (2020). The first was the result of a massive grassroots campaign by citizen taxpayers and homeowners striking back against out-of-control property taxes while the fake Prop. 13 was put on the ballot by the California legislature.

Prop. 13 (2020) is a huge $15 billion statewide school bond chock full of hidden traps for taxpayers. First, it reflects typical credit card math by Sacramento politicians because it would borrow $15 billion from Wall Street and then make taxpayers pay it back plus 80% in total interest costs. That’s an additional $12 billion we’ll be forced to pay, bringing the entire bill to $27 billion.

While no one disputes the need for adequate school facilities, the problem is that the state’s education establishment has failed to show that it uses existing school facility bond money effectively. California voters already have approved big school bonds, including a recent 2016 $7 billion measure, only to see much of those funds squandered. (Remember the infamous Belmont High School scandal when LAUSD wasted hundreds of millions building the nation’s most expensive high school on top of a toxic waste site?)

But this measure also presents a huge threat to homeowners.

To read the entire column, please click here.

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Legislative report card promotes truth to protect taxpayers

By Jon Coupal | In football, defensive coaches tell their players that the best way to avoid missing a tackle is to keep their eye on the ball carrier’s belly button.

The runner may duck, weave, or spin but the belly button is always at the center.

This is a fitting metaphor for the annual Howard Jarvis Taxpayers Association legislative scorecard.

Politicians will try all the dance moves they know in an effort to get to the tax-and-spend end zone, but report cards like ours hold them accountable to the people who matter most: the taxpayers who elected them.

In 2019, many taxes were stopped short of the goal line.

Assembly Constitutional Amendment 1 (ACA 1) would have lowered the two-thirds vote for bonds and parcel taxes to 55 percent and thus fundamentally altered Proposition 13 in the process.

Had it been approved, it would have resulted in billions of dollars of additional property tax increases, above and beyond the one percent cap established by Proposition 13.

Thankfully, it fell ten votes short of passage and was therefore defeated.

Other taxes that were tackled in the 2019 session included taxes on handguns and ammunition, water, soda, a sales tax on services, and a severance tax on oil, taxing it as it comes out of the ground.

However, victories in the Capitol are always short-lived.

To read the entire column, please click here.

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Fullerton City Hall is closed today for another three-day weekend

City Hall Closure Dates and
Observed Holidays

2019
January –1*, 11, 25
February – 8, 18*, 22
March – 8, 22
April – 5, 19
May – 3, 17, 27*, 31
June – 14, 28
July – 4*, 12, 26
August – 9, 23
September – 2*, 6, 20
October – 4, 18
November – 1, 11*, 15, 28*, 29*
December – 13, 24*, 25*, 26^,27^, 31*

*Holiday observed
^Winter Closure

Fullerton City Hall
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