Title transfer fee: Part 1 of my Save Our School—Tax the Super-rich plan

This evening I outlined part one of my equitable revenue enhancement plan.

Under Article 13D the District can levy a fee on local property owners. The District board can meet in an emergency session and pass the fee. Those who wish to oppose the fee have 45 days to send in their written objection. If they get a majority of the voters to oppose the fee it goes for a vote of all registered voters who then must pass it with a 2/3's vote. If they don't the fee goes into effect. This can be done in under 60 days—if the board has the political will to do so. The incumbents made it clear tonight that they do not have the political will.

The first fee that can be passed would have no effect on current property owners and taxpayers. The District can impose a title transfer fee that may be either a single rate or scalable.

For example, 27 homes sold in the past year totaling about $14 million. A 2% fee would have generated $280,000. A 3% fee would have generated $420,000.

A transfer fee would go a long way to rectify the inequitable property tax base inflicted by Prop 13 since the last 1970s.

It would also not only allow the District to avoid the further expected lay off of a Middle School teacher in 2012-13 but help us hire back the instructional aides and staff time cut in the past 2 years and even finally give the teachers and staff a pay raise.

And to top it off it would help us do all the facilities work that is expected to be needed at real current dollars instead of yet another inflated Wall Street funded bond measure that may be coming down the pipe line. We haven't paid off the past one from 1997 yet. The expected $4-6m bond measure in the works will end up costing us 100% interest over the next few decades.

Why do we want to sell off our school to Wall Street when we can fix the problems now?

Keep in mind that this is just one possible way to raise additional tax revenue in an equitable manner. I give the flat rate as just a hypothetical example. A flat fee is not as equitable as a scaled fee based on the sale price. I would exempt those buyers over 65 and homes for buyers who make less than the median income for their size household.

If it were scaled up it would link the fee to household wealth. For example, because a family with two income earners in the top 20% (~ $228,000 per year) would be able to afford a mortgage for a house around $900,000 and up (at about the standard 30% of their income spent on housing).

Scaling it up this way may generate less revenue than a flat fee since fewer homes sell for these prices. However, it would provide a long-term solution if home prices continue to rise.

I will be posting more about how to raise revenue on the super-rich in the Valley in the coming days.