I have to admit that when the State of California raised the tax on cigarettes, I thought, hey I’m not a smoker, what do I care? It means they are not coming after me for more money to give public employee unions. Then when the State went after alcohol, beer and wine, I thought the same thing.
Hey, the State of California government is like a drug addict–once you give them a few taxes, they keep coming back for more. Taxes are like Crack for government! Government cannot tax in moderation.
Then the State raised the Vehicle License Fee. I like cars and own too many, and everyone that owned a car had to pay. Then I got pissed. But it was too late, nobody else was pissed. Everyone had been paying all along and this wasn’t new to them and they weren’t affected that much.
The Dock Tax
That is the way that it is with the Dock Tax. Most people don’t own a dock in Newport Beach, and most people think that the people that own the docks are rich enough to pay the tax, so who cares. Besides, the City Council says the money is going to fund the harbor improvements and that benefits the dock owners anyway, so what is the big deal?
Well, the City made a deal with property owners a long time ago. The property owners were given permission to build a dock in front of their homes. It was their dock, they built it, and they paid for its maintenance. The docks increased the values of their homes and the property taxes went up and the city got 17 percent of that tax. Commerce and activity resulted in all the boat ownership and usage (which is all taxed as well). So basically it was a win-win for the owners and the city.
Real Damages to Property Values
Last year the city decided that the docks were there on state Tidelands which are operated by the City. They decided that they were not receiving rent for this very valuable land, so the city decided that the land is a leasehold interest and that the docks were there by permission of the city and if you didn’t pay “rent,” you can lose your dock.
So on Balboa Island earlier this year, a resident decided to sell his property, including his dock. When the buyer reviewed the “Dock Tax Permit,” and saw that the dock was a land lease and not owned by the homeowner, they reduced the offer on the property by $800,000. This may be an isolated incidence, but it has now come as an actual market based reflection on the change in ownership of the docks to the city.
This has a real downstream impact to the neighbors as well. Now that home on the water is worth less, and that may affect neighboring home values as well.
Another Opportunity to tell the Council What you Think
The city is sponsoring a couple of public hearings on the Dock Tax as they promised they would. One occurred Thursday this week, and the other will occur next Wednesday, August 21, from 6 to 8 p.m. at the Oasis Senior Center in Corona Del Mar. Come out and let the council know that you don’t support taxes.
The city has an opportunity to admit its mistake and reverse their decision and revoke the Dock Tax based on some of the negative, real world implications that are becoming known. I am an optimist, I know, but I don’t think this issue is going away, and I think this council can step up and make this course correction.
Scott Peotter is an Architect and former Planning Commissioner in Newport Beach. Scott can be reached at [email protected].
Terrific article. Spot on. Keep giving it to them, Scott. They need it.
Scott, one thing I learned many years ago, I don’t care who is getting taxed on items I don’t purchase or have, I don’t want them taxed any more. I know soon something I have or want to buy will be heavily taxed. We should all be supporting each other and oppose new or increased taxes.
But you’re right Scott. Taxes are like crack to the government. I looked up that cigarette taxes bring in over $25M each year (per 2010 data) in both state and federal taxes. Taxes and taxes collected on smokes have sky rocketed even though cigarette sales are half what they used to be in 1980. Once the government outlaws cigarettes (and they will, it’s coming), where will that $25M come from? Ya think they’ll just forget about it? Nope, it’ll be another or increased tax somewhere else to make up for the loss.
Dock Tax Permit?? Now they’re really stretching! And it’s a shame you know, that 8 years later the same politicos hankering after, addicted to, more & more tax revenue — are actually trying to kill off property tax relief in California, which makes this state so unique and incredible — actually trying to give middle class homeowners and commercial property owners a fair shake — whereas most other states cater this way ONLY to the rich, to the millionaires and billionaires and mega wealthy corporations. Only they get the breaks generally. Not so in California — the middle class property owners get the breaks — except the property tax addicts keep trying to take down property tax breaks in this state! Their latest efforts were Proposition 15, failed thankfully — and then a deceptive, sneaky little effort called Proposition 19… which did not fail and as you all know instituted limitations to the Proposition 58 “Parent to Child Exclusion” or “Exemption” (from paying reassessed property taxes). Yet, we still have healthy property tax relief options in this state.
So maybe property tax relief is not exactly the same… after Feb 15, 2021. But we thankfully still have Proposition 13 intact. We beat back their efforts to unravel it. We still have the “Parent to Child Transfer” albeit with limitations. The critical Proposition 58 tax break – if we’re inheriting property from a parent, and are moving into that inherited property within 12-months, as a primary residence only, if we wish to avoid property tax reassessment at current market rates. We still have viable property tax relief options… such as popular inheritance cash advance assignments, if we’re inheriting liquid assets and property, we can get fast cash from an inheritance loan or probate cash advance firm like https://www.inheritancefunding.com We can also look to property tax appeals, as long as we have the right firm with a high success rate, with realistic property tax reduction solutions and established programs, from firms like https://paramountpropertytaxappeal.com — actually offering a free tax appeal and property tax reduction evaluation to property owners. Or, strictly for beneficiaries – if inheriting a home, we can get approved to take advantage of Proposition 58, with a large six-figure Prop 19 trust loan, typically to buyout co-beneficiaries who are trying to sell their shares in the same inherited home – if we’re smart, from a reliable trust lender like https://cloanc.com – who is also offering a free consultation, and will help us nail down a low long-term Proposition 13 property tax base – with a property tax transfer from a parent, if we want to transfer parents property taxes when inheriting property taxes… and keep parents’ property taxes for the long haul, as we could prior to Prop 19. So we do have a few reliable, lucrative options still… in a post Prop 19 California. Until we repeal it, once California property owners realize they have been sold a bill of bad goods!
Just a quick comment on property taxes in California… this great article still holds up, with one change I’d like to comment on — namely, Prop 58 has now morphed into Proposition 19, with a good deal of buyer’s remorse among homeowners…
As Mr. Wyatt at Michael Wyatt Consulting and CEO Jon Coupal at Howard Jarvis Taxpayers Association both said to me recently – the CA state government is doing just fine without extra revenue squeezed out of middle class property tax payers. Californians need to use what’s there to use to keep the taxman away! Besides new property tax benefits for those over 55, for those with severe disabilities, or victims of natural disasters, floods, earthquakes or forest fires – Proposition 19 is still hanging in there with tax relief for middle class estate heirs or trust fund beneficiaries inheriting a home, with low or no cash in the estate or trust, which is often the case with middle class families –We should also step back and acknowledge that Prop 19 and Proposition 13 allow California beneficiaries and heirs to transfer parents property taxes when inheriting property and inheriting property taxes – and keep parents property taxes basically forever, establishing a low property tax base through a parent-to-child exclusion. The key here is avoiding property tax reassessment. For info on all this, go to the CA State Board of Equalization at https://www.boe.ca.gov ; or go to a property tax relief blog like https://propertytaxnews.org or maybe a trust fund lender like https://cloanc.com The more you know, the better off you’ll be when the situation arises that requires this kind of know-how!