Proposition 13 says that your property tax cannot go up more than 2% per year no matter how high inflation is. Since 1978 inflation has usually been over 2% so that incremental property tax increase has become routine. In both 1999 and 2004, the Consumer Price Index grew less than 2%, so the property assessments and taxes went up by the actual amount for those years, 1.85% and 1.86% respectively.
But what has never happened is for inflation to be less than 0%. Never until now. While the year for the CPI calculation runs to October, right now this year is running negative. If in these economic times prices decline over the entire year, then the official CPI index will be negative for the first time in the history of Proposition 13.
So each of us property owners should see a small yet real decline in property taxes. Right? Not so fast– the taxacrats are working on legal arguments to claim that a negative CPI change does not require a property tax change.
Since this has never happened before and has not been addressed by the Legislature or the Board of Equalization, any decision will provoke some real controversy.
I believe the spirit of Prop. 13 should be respected. When the economy declines then property taxes should decline for all property owners. When the CPI goes negative, base year property values should be adjusted down accordingly.
August 17th, 2009 at 12:00 am
Geesh…..let it alone….you made the 2% deal….live with it. Only p
Pikers, carnie types, posers and RINOS go back on their words!!!
August 18th, 2009 at 12:00 am
Some things to note — we are talking about next year’s property taxes. This year was based on the CPI calculated as of October 2008, which rose 3.5%. Also, in the July 29 OC Register, the OC assessor stated emphatically that even if the CPI as of October 2009 is negative, tax assessments will not decrease. They will merely stay the same, instead of increasing up to 2%, as they usually do. Exception, of course, for properties where current market value is less than Prop. 13 tax assessed value.
August 18th, 2009 at 12:00 am
Mr. Bosich, your comments seldom seem to have much constructive value, but in this case, you are simply wrong. The “deal” was not 2%. The “deal” was CPI, not to exceed 2%. Read Prop. 13.