Mercury News: Reject Property Tax Hikes of TT and UU, Which Will Make Piedmont More Exclusive
The Mercury News Editorial –
Editorial: Reject Piedmont property tax hike for pool repairs
The Mercury News editorial is copied below:
“Piedmont residents tax themselves to ensure that they have the best schools and premier city government. The average homeowner pays $4,400 in extra taxes for schools and another $635 for city services.
But those taxes also drive up the cost of housing in the exclusive city surrounded by Oakland and further ensure that those with average means will not be able to crack the city’s residential market.
Voters in Tuesday’s election will face two tax hikes. Measure TT, which we have previously recommended voters reject, would increase the city’s tax on property sales to state record-high levels. Now we look at Measure UU, a $19.5 million bond proposal to pay for replacing three old community pools with two new ones. Voters should reject that, too.
Based on the city estimates provided to voters, Measure UU would add an average $263 annually to the tax bill for a home assessed at the city average of slightly over $1 million.
It a bit of a tricky calculation for voters because city officials in the ballot wording obfuscated the projected average tax rate as 2.6 cents per $100 of assessed value rather than an easier-to-understand $26 per $100,000.
It turns out that the city overstated that rate, especially for the latter part of the 30-year tax. The firmer number is that city taxpayers would collectively pay about $1.3 million annually to retire the bonds needed to finance the construction.
To put that number in perspective, the city spends more than that – nearly $1.7 million to be precise – just to cover the interest payments on public employee pension debt. Put another way, most of the pool bond payments could be covered by Measure TT, which is expected to add about $948,462 annually to the city’s transfer tax revenues.
Individually and collectively, the two measures raise a question of, how much is too much? Rather than throwing multiple tax measures at voters, city leaders need to prioritize and look for savings elsewhere.”
Both Oakland Unified and Piedmont Unified have in total about $14,000 per pupil to spend on education. Piedmont receives about $5,000 less per pupil from the state than Oakland. Local taxes close this gap.
I’m sure you agree kids and the community deserve a pool and good schools. 50 years ago the good people living here built a pool for the community to share, now its our turn.
Sadly most jurisdictions use less than transparent language in their summary ballot statements. The details and counter arguments are in the accompanying literature that is often unread.
Nevertheless, Piedmont needs a swimming pool. And whatever it costs now, it will cost more in the future.
I don’t think the editorial opposes the pool, just how to pay for it. They have a point – both the UU assessment and TT projections are highly flawed, dumping a higher tax burden on recent and future Piedmont residents, unless you are a second generation resident. UU ballot statements use $1M as the average house price for assessment. Over the past 10 years, home prices in Piedmont have averaged over $2M. Last year’s average was $2.5M. Recent and new families will pay 3 to 4 times more for the pool than other families over the next 30 years.
Measure TT claims because transfer tax receipts will be $2.8M, the rate must be raised on new families to bring in $950,000. The transfer tax has averaged $3.5M over the past ten years and projection show it will exceed $4M by 2030 (see link below). Normal transfer tax growth could well cover the pool bond payments.
If the community is going to build a new pool, it should share the cost equally amongst all residents.
https://www.piedmontcivic.org/2020/06/23/opinion-piedmont-property-transfer-tax-increase-is-not-needed/