Friday, February 26, 2016

Flint, Michigan Meet San Jose, California

If you think the problems in Flint and other struggling cities are entirely the fault of local leaders and not a reflection of fundamental problems with the U.S. economy and how we fund and support cities, you really should read this story about San Jose in The Atlantic. Even if you don't agree with it, the article provides a sobering overview of the issues affecting American cities. It's focused primarily on Prop. 13 and other issues specific to California, but it illustrates some distressingly common themes —dwindling tax revenue, infrastructure needs, and reduced city services.

Alana Semuels writes:
One would think that the richest city in America would have better roads. And more police officers. And more adequate housing for the poor. 
And yet, San Jose, which has the highest median household income of any major city in the country, at $77,000 a year, and is home to billion-dollar companies such as Cisco and Adobe Systems Incorporated, also has some of the worst roads in the country, a shrinking police department despite a growing population, and, until the city shut it down, one of the largest homeless encampments in the nation.

2 comments:

  1. One thing that bugs me about these attacks on Prop. 13 is that they never point out how many people struggled to pay property taxes in the boom and bust real estate cycle of California. If you are not selling or refinancing, having your taxes jacked up just because your property went up in value on paper was not a good system. You got no financial benefit from the paper gain, but you had a big, unexpected tax bill. Not easy to budget for that, especially on a fixed income.

    So I wish authors would devote at least another paragraph to point out that Prop. 13 actually helped a lot of people. It's really the commercial property loopholes in the law that don't really help individual homeowners and rob the state of valuable tax revenue.

    Besides, any attempt to change how individual homeowners are assessed — millions of whom are still paying really high property taxes — will be political suicide for any elected official who supports it. So it might be time to think of alternative ways to fairly raise revenue for the state.

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    1. Speaking personally, I definitely fell into this category. There were definitely times when a big spike in property taxes would have been tough for me to handle financially. And the notion that no one is paying any significant property taxes in California is misleading. I pay $7,500 for a 700 sq. ft. house. But the commercial property elements of Prop. 13 really are a problem, especially for a law that was supposed to help individual homeowners.

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