Prop 13 vs. Split-Roll Property Taxes

A Strong Movement in Sacramento is Pushing to Remove the
Protection of Prop 13 from Commercial and Industrial Properties.

California Voters amended the state constitution when Prop 13 was passed with an overwhelming consensus that our property tax system was broke and needed fixing.

Opponents to the landmark legislation have continued to find ways to blame CA Prop 13, often referred to as the 'Wolf in Sheep's Clothing', for the shortcomings of California society, at every opportunity . The battle cry is always the same, "If only there was more money to spend this or that would have been different".

The Los Angeles Times is clearly in favor of a Split-Roll tax as they reported on July 13, 2009 that "California's property tax burden has gradually shifted to homeowners because commercial and industrial property taxes doesn't change hands as often as homes and the sales can be easily disguised."

The LA Times cites Disneyland as an example as property that has never changed hands and pays approximately five cents per sq ft of land while the average homeowner is paying $2.06 per sq ft in property taxes.

Through the years, since the passage of Proposition 13, there have been several attempts to change the law-including another ballot initiative in Prop 167 which was rightfully rejected in 1992 by 59% of voters.

As recently as September, 2009 the California State Senate unanimously voted to approve SB17, known as the "Smart Grid Systems" Bill which began as legislation aimed at unraveling Prop 13 and allowing commercial/industrial property owners to carry the cost through a split-roll property tax system.

On May 28th, 2009 the Sacramento Bee reported, "The idea of a split roll has been gaining steam among Democratic lawmakers and interest groups that would like to see the state's fiscal problems solved by generating more revenue, not solely by program cuts. Ting (S.F. Assessor Phil Ting) said there are many ‘split roll' possibilities including creating a different tax rate for commercial property, reassessing it more often, or allowing it to increase at a faster annual pace then homes. Ting said he launched the new political committee ("Close the Loophole") at the urging of numerous private individuals in the Bay Area and Northern California, but that he did not act at the behest of lawmakers or Capitol interest groups."

The California Teachers Association (CTA) filed two initiatives with the Attorney General on November 6, 2009 for ‘Title & Summary'. These will end Prop 13 protection for commercial real estate, by enacting a split roll property tax in spite of the Constitutional Amendment being successfully defended in several venues over the past year, including the state budget and the Tax Commission.

To sweeten the appeal to the residential voter who must pass this law, the homeowner property tax exemption is doubled, the renters credit is doubled and small business is exempted on the first million dollars of personal property tax.

One of the measures has a laundry list of benefits to education in an attempt to sway the public and control of the monies collected to assure the benefit for teachers and has built in rhetorical devices for the campaign; i.e. Vote for Prop XX to "Increase Class Size Reduction" and "Improved School Safety"... all at the expense of the nasty big businesses who have taken advantage of loopholes in the system.

To read more articles I have published about California Properyt Taxes and Prop 13, please follow this link.