Thursday, July 2, 2009

But It's Value Can Only Go Up!

It's no secret that California is at a low point, and Governor Schwarzenegger has his share of critics.

One critic
claims that the state is in the current mess because the governor is lockstep with his big business campaign donors and is refusing to consider budget alternatives:
This column and others have detailed how merely changing the rules under which some real estate is not reassessed to current market values on changing hands would provide between $3 billion and $12 billion in new state money each year. All that would take is a majority vote of lawmakers and a Schwarzenegger signature.

This solution seems a little disingenuous. First, if it were so obvious and easy, what has prevented a simple majority of congressmen from getting behind it? Are they all in the pockets of the real estate lobby? And second, wouldn't reassessing property values only increase revenues if property values went up? The article itself acknowledges it has been a tough year for real estate, but only to claim, "Competitive pressures in today's miserable real estate market make it doubtful most owners of properties that have long enjoyed the no-reassessment loophole could pass their expense on to tenants or customers." I thought housing prices dropped in miserable real estate markets.

I am intrigued by Bill Lockyer's solution to the budget stalemate, though I doubt it will garner popular support.


Pete Abbate said...

Locklyer seems a little jaded for my taste.

Josh Knox said...

...a lot of people in this state are a little jaded.

Pete Abbate said...

But it never rains. Californians don't know how good they have it. They should try living for a year in Pittsburgh.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty