Here in Colorado, our “third rail” is TABOR, the evil “drown the government in the bathtub” amendment that not only mandates refunds to us taxpayers (who don’t pay enough in the first place, IMHO) in bad budget years, it requires us to shrink government in bad budget years and won’t let us re-grow it to an adequate level when the good times return. So even if in FY ’11 and ’12 many states are singing “Happy Days are Here Again,” it won’t be happy times here in the Centennial State.

The effect on home prices is more complicated. Yes, 13 rolled back assessments to 1978 levels, but it permits re-assessments every time property is sold, so you get look-alike adjacent homes, one in the same hands since 1978, one that’s been resold a few times, paying vastly different taxes. We did foresee, 30 years ago, that because commercial property changes hands much less often than homes, 13 would mostly benefit commercial landlords and agribiz; instead of 13, we urged voters to support a measure on the same ballot that would have allowed different tax rates for commercial and residential property. But homeowner rage, very much fueled by racist notions about who pays for government and who “sponges off” it, was unstoppable, and even now, with our roads crumbling and our schools terrible etc. etc., Prop. 13 is considered untouchable, a political Third Rail.

And Geoff and Liz–thanks for your further clarification on Prop 13. It still screwed at least a generation–MY generation–of public school students in California (ca. 1978-1990-something, when the prices really skyrocketed). For the record–I didn’t grow up in CA, but the “taxpayers revolt” there had implications in school districts across the country. My memory is of my school district constantly putting school levies on the ballot–like every year–and that sometimes they passed, and sometimes they didn’t. I’m not saying that California is entirely to blame–clearly there was a zeitgeist linked to stagflation and the incredibly shrinking American dollar–just saying that it was probably the most dramatic and most publicized anti-tax measure of the time.

I think some kind of tax relief is appropriate for longtime owners on fixed incomes–and in the 1970s, there weren’t as many ways to make home equity work for you as there came to be in the 1990s and 2000s. But there are an awful lot of people who enjoyed profit without paying their fair share. (Why not just adjust everyone’s tax rate downwards, if property tax valuations were going through the roof?)

Sounds exactly like how people talk about mothers — and women who aren’t mothers, as well. Oh, wait!

he’ll always have a reason to beat us pathetic $35,000/yr. schoolteachers.

I wonder what gender most of those pathetic school teachers are? Ooh ooh, and which gender is more associated with consumption and irrational spending?

And someone beat me to the Prop 13 reference, which, along with our stupid stupid stupid law that says we need 66 percent to pass an annual budget, is at the root of a lot of our state’s fiscal problems.

And Nathan–thanks for the additional data points. The situation is so complex that there are clearly no single causes, and I take your points about Arizona and Florida. But, to be clear–I wasn’t arguing that it was money spent per pupil that drove the real estate bubble, but rather test scores. It’s entirely possible to spend lots of money for not so great outcomes–and equality of money spent is not necessarily equitable. My argument here isn’t that we need to equalize funding–it’s that we need to pay what it costs to get the results we want. It will cost a lot more money per pupil to get the same result in (for example) the Denver Public Schools than it will in the tony suburb of Cherry Creek, where nearly all of the children have breakfast, proper clothing, and at least one parent who plays an active role in their children’s educations. Teachers who have to do their students’ laundry, feed them breakfast, and purchase their school supplies for them can’t just jump right in first thing in the morning with the 3 Rs.

I’m still of the opinion that much of the bailout should go to people stuck in bad mortgages/bad mortgage situations because they’ve since lost their jobs but just buying up the mortgages (if paid off immediately, the banks lost the interest, but the goernment would get it) and re-financing so people can stay in their homes. That and national health insurance.

The people who got crazy mortgages on second or third homes, or because they were speculating? I’m not so worried about.

It is true that the subprime meltdown is concentrated in only “some neighborhoods” something like half of all home foreclosures are taking place in 35 counties. http://www.usatoday.com/money/economy/housing/2009-03-05-foreclosure_N.htm A sizable portion of our foreclosures are taking place in states where differences in education spending are not a major consideration when deciding where to buy. Many of the foreclosures are taking place in retirement states like Florida and Arizona where new home buyers are more concerned with the quality of the golf courses then the quality of the schools. Also cutting against the school-funding/foreclosure nexus is the fact that California interprets the equal protection clause of its constitution as requiring equal spending per-pupil (see Serrano v. Priest, (Serrano II ), 557 P.2d 929 (1976).