By David Warren–
As the city places Measure M to increase the municipal sales and use tax in the amount of 1% on the ballot, The Sentinel has published guest opinions in support and opposition to the proposal.
It is ironic that if State ballot Proposition 15 is successful, there will be no need for Measure M taxes, something not commented upon by either the supporters or opponents of Measure M.
Generally speaking, Proposition 13 in 1978 limited real estate property tax assessment increases on residential, commercial and agricultural real property to (1) the result of a sale or (2) 2% per annum. The ballot proposition was sold to the public as a method to prevent seniors and low-income families from being forced to sell their homes and family farms because they could not afford to pay increases in property taxes.
However, in order to obtain business interest support, commercial property and large agribusiness farms were granted special provisions which has insured that using tax shelter transactions would not result in an increase in property tax assessments.
Since 1978, the cost of providing municipal services has increased annually at a rate greater than 2% per annum. The need for better trained and more public safety officers, police and fire, is self-evident by examining current events, as is the need to repair and replace roads and the physical structure of municipal buildings and schools.
The dramatic need for more funding for schools is made only that more obvious as the COVID-19 pandemic has required the implementation of distance learning, either in the form of home schooling or safe spacing on school grounds.
The un-repaired potholes in our streets is solely the result of the inability of all state, county and municipal governments to receive sufficient funds for maintenance over the past 30-plus years because revenues remained in too many instances based upon 1978 values.
By way of example, a senior whose residence was appraised at $30,000 in 1978, but which value had appreciated to $600,000 in 2020, is still paying taxes based upon the 1978 assessment limited to 2% per annum increases, although it is fair to assume as the homeowners have aged, their need for fire, ambulance, health and public safety services is greater with no concomitant increase in revenue to the municipality.
To ensure that seniors remain in their homes, younger individuals subsidizing senior citizens is morally reasonable. When a senior sells his/her home, the purchaser will be assessed, and pay property taxes, based upon the new purchase price.
In some instances, there is an exception to a new assessment for seniors who then purchase a new residential parcel.
Attorneys for commercial property purchasers have utilized a tax dodge contained in Proposition 13 to avoid an increase in assessment. As a consequence, commercial property owners have not in the past and continue to this date fail to pay their fair share of taxes to support municipal services, despite their use of police and fire services at current prices.
It is the middle-class home purchasers who must therefore carry the burden of being called upon to pay a disproportionate share of the costs for municipal services through sales and use taxes, or go without.
Proposition 15 remedies this disparity by removing the tax loophole for only commercial because it requires a reassessment for property tax purposes of the parcels. Proposition 15 will amend the California Constitution and require commercial and industrial properties, except those zoned as commercial agriculture, be taxed based upon market value.
Residential properties will continue to be assessed and taxed based upon the purchase price. This is known as split tax assessment roll.
Driving down almost any street in Citrus Heights is an unpleasant experience because of the deteriorated streets. Repairs based upon SB 1 gas and registration fee taxes have had to be delayed because of the COVID-19 pandemic which has resulted in a dramatic drop in fuel consumption.
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One street repair in Citrus Heights was estimated to cost more than $1 million dollars for less than a mile. Municipal repairs beyond street repairs have had to be deferred due to a lack of funds. The city has significant unfilled municipal staff vacancies, including 16 at the police department.
Instead of the two municipal “power broker” factions arguing over a 1 cent sales tax, it will be better for the supporters and opponents of Measure M to endorse Proposition 15 so that not only the city, but also the San Juan Unified School District and Sacramento County would benefit from a split property tax roll which would base commercial property tax revenues on current values, not 1978, commercial property values.
As a resident, I want to be assured that the city municipal staff does not have necessary positions vacant because of lack of funding. I want to make sure that the CHPD has no vacant but unfunded positions.
As a crime victim, intellectually I understand that the excellent individuals who staff the CHPD cannot resolve all crimes due to the lack of staffing compared with the number of crimes reported, even as I emotionally want a resolution of the crime I reported. It is not rocket science to realize that an increase in CHPD staffing will result in an increased number of investigators resolving an increased number of criminal complaints.
Municipal services are not free, they are only as good as what we are willing to pay. No one purchases a Cadillac if one is only willing to pay the price for a Yugo.
It is time for all of us to bring our municipal tax base to 21st century values, a superior solution to a 1 cent sales tax increase.
David Warren is a legislative advocate at the State Capitol with Taxpayers for Improving Public Safety, and can be reached at David@forpublicsafety.com. His commentary here is not an endorsement of any ballot proposition or measure by Taxpayers for Improving Public Safety.
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