Originally Posted by Kingfish

So many people here are off the mark here as to what caused the problem. California is the victim of a wacky conservative economic experiment called Proposition 13. It forever hampered the state’s ability to raise revenue the way most other states do. That is why there are so many high fees and other things in California because they simply can’t generate revenue the way most of the other states in the country do through property taxes.

There are people that have multi-million dollar homes that get taxed on what the property was valued at 30-35 years ago. For example if you purchased a home that was valued at 100k in the mid 70s that is worth 10 million today you would only pays taxes on the 100k value even though you now rent the home out based on the 10 million dollar value. The same goes for commercial real-estate if a developer built an apartment complex for a million dollars in 1975, but because of location and inflation the complex is now worth 30 million dollars the developer still only pays taxes on the original value of 1 million dollars even though the rents he collects in 2010 reflect the 30 million dollar value.

The free riders are the long term residential and commercial real estate owners.