San Diego Housing Bubble News and Analysis

This chart won't tell you exactly what it is spent on, but it will tell you who gets it:
http://www.co.san-diego.ca.us/ttc/insert...

The money gets buried in a big hole outside Sac. Unfortunately, nobody kept a map of all the hiding spots.

Come guys. Haven't you all noticed the four fold increase in the number of Police, Fire, and other civil service personnel around making your lives better and safer? I am sure all of that extra money has found its way into the hands of people who do not need it and likely misuse it. Although, maybe aside from all of the foreclosures going on, tax lien sales could start to sprout up more? After all, the city HAS to have its money in order to keep funcitoning, right?

Hey that chart doesn't show the billions allocated to our sports teams!

Local property tax revenue surpluses have largely been used to hire more public safety employees and to increase the salaries/benefits of those employees over the past few years, to probably unsustainable levels. San Diego is the poster child for this. Local public safety agencies statewide have been playing leapfrog with salaries and benefits for police and fire for several years. Most safety employees can retire at 50 with 3 percent of their highest salary for every year worked, plus lifetime medical benefits. Many of these employees get disability retirements due to the strenuous nature of their jobs and therefore only have to pay income tax on 50 percent of their pension income.

The state gets very little property tax, its revenues come from the "big 3"--the personal income tax, the sales tax, and corporation tax. That (among other reasons) is why the state continued to face structural deficits even when real estate was booming from 2001-2005. Income tax revenues are very volatile. The locals have been riding a gravy train since 2001 and are going to start howling soon because the revenue growth has come to a halt. The smart ones, that spent the funds on one-time purposes like infrastructure improvements or set aside rainy-day funds will be fine. But those that expanded safety employee benefits are in for some hard times, with few options for cutting costs. Trying to reduce or eliminate pension benefits from public safety "heroes" is political suicide.

Its in a reserve fund right now because of all the owners who won't be able to make their payment in the next few years

I don't feel like I'm getting quadruple the services from a few years ago.

Where are the true fiscal conservatives and small government advocates?

..maybe paying the guys working on I56 digging a hole, filling it back up, digging a hole, filling it back up...

Sorry, I doubt our property taxes actually go to the 56 work. But, I'm a little peeved because I'm not exactly sure what the hell they are doing using our tax dollars to do whatever the hell they are doing on 56 near the 5 interchange these days.

For awhile, I thought they were expanding both eastbound and westbound with a third lane. Now it looks like they are just spending money just to widen the left hand shoulder and add some shrubs, because the shoulder is too narrow to be a third lane.  I hope it's just a precursor for a third lane, otherwise I don't get what the heck is the point, except possibly to make it easier for the CHP driving in the opposite direction to cross over to nab you for speeding.

I have to take issue with jenny on this one. Normally I avoid true conflict but the state is a fiscal disaster and what does the fed give me. Before I became a reverse flipper, I paid the state more than double my property taxes and the fed quadruple my property taxes, for what. At least my property taxes buy me firemen, cops, teachers, paramedics, roads, etc. From the graph linked earlier, half the propery taxes go to schools so lets not blame the "heroes" for all of the governemnt's fiscal problems. Give me numbers, what is Iraq costing me, what are illegal aliens costing me, and what are the cops and firemen costing me? I'll bet the emergency workers aren't costing me all that much. I don't want much from the government but I do want the emergency workers and the roads, traffic free, heart attack revival and crime free, that's utopia and for that I will pay gladly, now as far as the delta smelt, what kind of bun do i want it on is all I want to hear. I don't live in Carlsbad but I went to the city's website for some data since that city has been getting some extra tax revenue. 107 cops, 75 fireman, 550 teachers (from the teacher's union website). I also read a news article where they were adding five cops this year, whoopeee. I hardly feel that is where all the money is going. So you are telling me that those 180 emergency workers pensions is where all the money went, doubtful. I also recall reading an article about the life expectancy of retired "hero" types (military, police, fire, emergency room doctors, nurses, parmedics, etc.) being far less than than the general population but I can't recall the specifics yet it seems logical to me. Sure, many of those workers get better pensions than the average joe but they also die earlier so the total payout is probably similar. If it's so great then go be one, almost every category is hiring and having trouble hiring at that. Those guys and gals do stuff i don't want to do so pay I will. I wouldn't be so bitter if the state actually built a freeway in my lifetime other than a carpool lane. At least my property taxes get spent locally, state and federal taxes collected here are not spent here, and not on things i care about, that I am sure of.

FLU, I thought the same thing about the 56. I thought for sure they were widening it and now it doesn't seem that way. Unless they take down those barriers then maybe a third lane can be added but for what a mile then all of a sudden a brutal bottleneck will occur causing an even worse backup of traffic.

I just don't see where this money is being spent. Money for schools? Why the f*ck do people have to pay mello roos for schools if they are collecting bank from the property taxes. Something isn't right here at all.

TG-I wasn't saying that the "hero" types don't deserve more pay or a pension. I think they do, my father was a SD City firefighter for 35 years, and I am a public employee as well. But the OP asked where all the additional property tax went during the housing appreciation boom. A great deal of it went to higher salaries and benefits for these local employees. Probably rightly so because for years their salaries were too low. Prop tax goes to schools too, but it doesn't necessarily result in increased spending because whenever prop tax revenues are up, the state is able to back off the General Fund share of the prop 98 guarantee. That is one of the only ways the state benefits from higher property tax revenues. Now property tax has stopped growing, but the Prop 98 floor will continue to increase, even as the number of kids in K-12 decreases.

I have worked on the state budget for 10 years-through three governors-and one thing that never changes is that the locals always feel like the state is ripping them off. The state didn't do that, Prop 13 did that. But recently, for once, the locals had more money coming in than the state, and they have much more discretion with which to spend it.

What is left out is the amount of money that is not used for public purposes. The City of San Diego is a case study in diverting property tax revenues to developers. In downtown San Diego, where significant growth of property tax occurred, 80% of new property taxes went to the redevelopment agency. At Naval Training Center, which was public property, 80% of property taxes also went to the redevelopment agency.

The redevelopment agency can only spend their money on salaries and paying off development bonds.

That was the same rationale for creating the Grantville redevelopment district. Well connected landowners of property bordering the San Diego River wanted the extra profits that can be garnered by pleading poor and then getting the subsidies that can be obtained in a redevelopment district.

So, yes, there is problems with the portion supposedly going to schools. But there is a bigger problem with funds being siphoned into redevelopment scams.

The public needs to find a way to implement basic accounting.

sdactive, excellent post.