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Income taxes down. Sales taxes down. Property taxes down.
Can you guess what's next?
http://www.sfgate.com/cgi-bin/articl...MNGP1EAU7A.DTL
The real estate slump has spurred record declines in property taxes this year, with every Bay Area county slashing the assessed values of many homes and businesses. In seven of the nine counties, the overall property tax roll is down from the prior year - in some cases the first such decline since the Great Depression.
Postcards and letters notifying residents of their new assessed values go out this month. While homeowners welcome saving hundreds or thousands of dollars on their property taxes, the fallout is likely to be brutal for the counties, cities, schools and special districts that depend on this revenue.
"Property tax is the single largest discretionary source of revenue for counties; it's how they keep libraries and jails open and keep deputy sheriffs on the street," said Paul McIntosh, executive director of the California State Association of Counties. "This is devastating impact upon impact. Many counties already lost property tax and sales tax revenue last year and had to dip into their reserves to sustain programs. Now they've exhausted those and have to make very, very dramatic cuts."
Compounding declines because of sagging market values is the fact that California had a negative Consumer Price Index this year for the first time since Proposition 13, which governs property taxes, passed in 1978.
Ordinarily under Prop. 13, assessed real estate values increase 2 percent a year - unless the inflation index is lower than that. This year, every property in California will get at least a 0.237 percent reduction in assessed value, in line with the CPI decline.
Looking at market value
A related law, Proposition 8, says assessors must temporarily reduce properties' taxable values in line with market conditions. That means about 600,000 Bay Area homes and commercial properties will see significant reductions in their assessed worth this year because of the continuing free fall in real estate values.
"It's historic; we've had a complete collapse of the residential market over the last few years," said Larry Stone, assessor of Santa Clara County, where the tax roll is down 2.43 percent this year compared with last year. "The last time we had a reduction in the roll was in 1936 during the Depression, other than the political reduction when Prop. 13 passed in 1978." (Prop. 13 rolled property values back to 1975 levels.)
About 118,000 Santa Clara County properties received reductions averaging $175,000 in their assessed values. Because property taxes are roughly 1 percent of assessed value, on average, each of those homeowners will save $1,750 in taxes.
Contra Costa County had one of the biggest declines in the Bay Area, but it's still better than last year's 7.6 percent plunge.
"With the state of the economy as bad as it is and nothing getting better in the foreseeable future, the powers that be should be pleased that it's only down 3.39 percent this year," said Contra Costa County Assessor Gus Kramer.
San Francisco stood out as the sole Bay Area county clocking an increase in its tax rolls, which were up 4 percent compared with last year. Napa County's property tax roll stayed the same, according to Assessor John Tuteur.
"I think we're the only county in the state with positive (property-tax roll) numbers," said Phil Ting, San Francisco assessor.
Although about 12,000 properties received value reductions under Prop. 8, that was more than offset by commercial and residential properties that changed hands at new, higher values, as well as new development in areas like Mission Bay and Bayview-Hunters Point, Ting said. Housing in San Francisco, with its tight supply and desirability as a place to live, has held its value much better than inland counties.
"Our strong property-tax base means we won't have to have the significant cuts in public safety, public health and public transit that other locales are doing," Ting said.
Even after housing values start to recover, for many counties, lower property taxes are likely to be a fact of life for years to come. That's because all the foreclosed homes that changed hands at bargain-basement prices have locked in those low prices as their new tax valuations.
Lower values for future
In Alameda County, for instance, 11,120 properties sold last year for less than their previous assessed value. An additional 11,700 sold for a higher value and about 5,600 sold right at their assessed value.
"That's very unusual," said Russ Hall, chief deputy assessor. "In a good year, 95 percent or more would (sell for more than their assessed value). This year a lot of the change of ownership indicates lower values that will now be the assessment for future years."
Property owners can dispute their assessed value by contacting their county assessor's office. The deadline is either Sept. 15 or Nov. 30, depending on county.
Can you guess what's next?
http://www.sfgate.com/cgi-bin/articl...MNGP1EAU7A.DTL
The real estate slump has spurred record declines in property taxes this year, with every Bay Area county slashing the assessed values of many homes and businesses. In seven of the nine counties, the overall property tax roll is down from the prior year - in some cases the first such decline since the Great Depression.
Postcards and letters notifying residents of their new assessed values go out this month. While homeowners welcome saving hundreds or thousands of dollars on their property taxes, the fallout is likely to be brutal for the counties, cities, schools and special districts that depend on this revenue.
"Property tax is the single largest discretionary source of revenue for counties; it's how they keep libraries and jails open and keep deputy sheriffs on the street," said Paul McIntosh, executive director of the California State Association of Counties. "This is devastating impact upon impact. Many counties already lost property tax and sales tax revenue last year and had to dip into their reserves to sustain programs. Now they've exhausted those and have to make very, very dramatic cuts."
Compounding declines because of sagging market values is the fact that California had a negative Consumer Price Index this year for the first time since Proposition 13, which governs property taxes, passed in 1978.
Ordinarily under Prop. 13, assessed real estate values increase 2 percent a year - unless the inflation index is lower than that. This year, every property in California will get at least a 0.237 percent reduction in assessed value, in line with the CPI decline.
Looking at market value
A related law, Proposition 8, says assessors must temporarily reduce properties' taxable values in line with market conditions. That means about 600,000 Bay Area homes and commercial properties will see significant reductions in their assessed worth this year because of the continuing free fall in real estate values.
"It's historic; we've had a complete collapse of the residential market over the last few years," said Larry Stone, assessor of Santa Clara County, where the tax roll is down 2.43 percent this year compared with last year. "The last time we had a reduction in the roll was in 1936 during the Depression, other than the political reduction when Prop. 13 passed in 1978." (Prop. 13 rolled property values back to 1975 levels.)
About 118,000 Santa Clara County properties received reductions averaging $175,000 in their assessed values. Because property taxes are roughly 1 percent of assessed value, on average, each of those homeowners will save $1,750 in taxes.
Contra Costa County had one of the biggest declines in the Bay Area, but it's still better than last year's 7.6 percent plunge.
"With the state of the economy as bad as it is and nothing getting better in the foreseeable future, the powers that be should be pleased that it's only down 3.39 percent this year," said Contra Costa County Assessor Gus Kramer.
San Francisco stood out as the sole Bay Area county clocking an increase in its tax rolls, which were up 4 percent compared with last year. Napa County's property tax roll stayed the same, according to Assessor John Tuteur.
"I think we're the only county in the state with positive (property-tax roll) numbers," said Phil Ting, San Francisco assessor.
Although about 12,000 properties received value reductions under Prop. 8, that was more than offset by commercial and residential properties that changed hands at new, higher values, as well as new development in areas like Mission Bay and Bayview-Hunters Point, Ting said. Housing in San Francisco, with its tight supply and desirability as a place to live, has held its value much better than inland counties.
"Our strong property-tax base means we won't have to have the significant cuts in public safety, public health and public transit that other locales are doing," Ting said.
Even after housing values start to recover, for many counties, lower property taxes are likely to be a fact of life for years to come. That's because all the foreclosed homes that changed hands at bargain-basement prices have locked in those low prices as their new tax valuations.
Lower values for future
In Alameda County, for instance, 11,120 properties sold last year for less than their previous assessed value. An additional 11,700 sold for a higher value and about 5,600 sold right at their assessed value.
"That's very unusual," said Russ Hall, chief deputy assessor. "In a good year, 95 percent or more would (sell for more than their assessed value). This year a lot of the change of ownership indicates lower values that will now be the assessment for future years."
Property owners can dispute their assessed value by contacting their county assessor's office. The deadline is either Sept. 15 or Nov. 30, depending on county.
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