• Should Kaua‘i try Proposition 13?
Should Kaua‘i try Proposition 13?
To fix Kaua‘i’s problem of long time residents being taxed out of their homes, we should copy California’s Proposition 13. It was overwhelmingly voted in by angry citizens facing exactly the same problems in 1978.
The Friday, August 1 TGI article “How did California get into such trouble?” correctly describes the key features of Prop 13. It froze property taxes at 1 per cent of 1976 values and limited increases to 2 per cent per year. When a property is sold, the assessed value is kicked up to the sale price. New buyers know what they face in terms of property taxes.
California’s property tax revenues have grown steadily since the passage of Prop 13 due to new construction and properties changing hands. They just didn‚t go up as fast as they would have without Prop 13. The same will be true of Kauai.
Governor Gray Davis is about to pay the price for the gross mismanagement, the real cause of California’s problems. He made too many blunders related to electric power “deregulation” to list here. Buoyed by huge tax revenues from the dot.com bubble, he expanded state government feverishly. The bubble burst, and California can no longer afford all that expansion.
Prop 13 did result in neighbors in similar houses paying very different taxes. We are unaware of those disparities creating any problems between neighbors. It’s a fact of life just like disparities in other taxes.
Finally, the “circuit breaker” approach proposed by some may have unintended consequences. If the property taxes for those “able to pay” are allowed to soar, their standard of living drops. Whether still working or retired, some of those people will sell and move to friendlier tax climates. Is that how Kauai should treat current residents?
John A. Love