The idea of tax assessment becomes thorny when we consider who is paying and who is not. There is a point where we as a society need to accept the responsibility for our social system, just because it is the right thing to do.
To support a system that does not equitably spread the cost over all its members is just wrong. As we all must share the cost of providing access to disabled or aged, we must also share the cost to educate our children, provide emergency services, and facilitate health and well-being for all.
Our property tax is one way to provide for services. Service areas for fire, emergency services, recreation, hospital and such are examples of where some of our property tax goes. We also pay for road maintenance, college support, planning and administration of the borough with property tax. The exemption of persons over 65 years of age to pay no property tax is something that must change.
At the same time the ad valorum property tax system we currently use allows little or no control for the taxpayer, especially those on fixed income, to plan for cost of housing. If we all are going to share in the cost of government and services, we should consider that certainty in taxation must lay in the hands of the taxpayer instead of the tax collector.
California’s “Proposition 13” set up an “acquisition value system” that treats all homeowners alike in that they pay 1 percent of the market value established at the time of purchase. It limits increases to 2 percent a year.
A man named Joel Fox wrote a retrospective on “Proposition 13” of California:
“On June 6th, 1978, nearly two-thirds of California's voters passed Proposition 13, reducing property tax rates on homes, businesses, and farms by about 57 percent. Now, according to the newly amended state constitution property tax rates could not exceed 1 percent of the property’s market value and valuations couldn’t grow by more than 2 percent per annum unless the property was sold. Prior to Proposition 13, the tax rate throughout California averaged a little less than 3 percent of market value, and there were no limits on increases either for the tax rate or property value assessments.
“Some properties were reassessed 50 percent to 100 percent in just one year and their owners’ tax bills jumped correspondingly. Under the tax cut measure, property tax valuation was set at the 1976 assessed value. As stated above, property tax increases on any given property were limited to no more than 2 percent a year as long as the property was not sold. Once sold, the property was reassessed at 1 percent of the new market value with the 2 percent yearly cap placed on this new assessment. Thus, the new buyer is aware of what the taxes will be and knows the maximum amount property taxes can increase each year for as long as he or she owns the property…”
If we on the Kenai Peninsula are going to seriously look at re-evaluating our property tax structure we should take the lessons learned from Proposition 13 to heart. It has worked for both government and citizen.
John Fenske is a longtime Homer resident and former Homer City Council member.
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