I'll go with Palo Alto, since that's what I'm most familiar with. It's still a city with >65,000 residents. You need tax revenue to support a city that large, along with all the services and maintenance that comes from supporting a 3-4x larger daytime (pre-COVID) population of people coming in to the city to work.

Prop 13 limits the % you can raise property tax each year, unless they sell the property (at which point the property tax resets to the sale value). That leads to a lot of people not moving and holding onto their old, low tax property.

It’s not just a California issue. Pretty much all of post-war (World War II) American development is functionally insolvent. Actually, not having enough residents per square mile is a leading driver of the need for more tax $.

https://news.ycombinator.com/item?id=3090385

Most likely they chronically overspend, just like any other organization with chronic budget issues. The people there seem to think that everything comes for free, and as long as the city can secure additional debt, they're right.

But it's not sustainable, and imo, downright evil.

Spending. Endless spending.

There is no amount of money that is enough.

Not spending fast enough? Maybe a high speed train would solve things!

Grew up there. Been traveling country since. Shocking how well states do with a lot less money.