Opportunity Arises to Revise California's Prop 13

Proposition 13 has long been associated with California's budget woes and "fiscalization of land use" policies. Meant to apply primarily to residential property, commercial property owners have benefited more. 'Split role' could correct the problem.

"The landmark 1978 measure (known as Proposition 13) imposed a tight limit on property taxes, which previously had been the chief support for schools and local governments, and had the indirect effect of shifting much of that burden, especially for education, to the state.

"There's almost no chance that Proposition 13's limits on residential property taxes would be touched". However, a strategy known as "split roll", whereby residential and commercial property are evaluated differently, has been a longstanding favorite amongst reformers.

"One section of Proposition 13 requires taxable values to be upgraded when a parcel changes ownership. Homes almost always change hands in one sale, but business property is most often transferred incrementally, as ownership of corporations changes through stock sales. And unless more than 50 percent changes hands in one transaction, Proposition 13's reassessment provisions are not triggered.

It's still not likely to happen, but as the state's budget crisis deepens, even the politically unthinkable surfaces."

Thanks to Roundup

Full Story: Dan Walters: Proposition 13 limits return to the agenda



Irvin Dawid's picture

Prop 13 'split role' fix urged by SacBee:

"Faced with the need to make draconian cuts because of the current budget crisis, elected leaders are eyeing a so-called split-roll property tax system seriously as a way both to increase revenues and to make the property tax system, at least as it relates to commercial property, more fair."
Editorial: Time to look at Prop. 13 again, Jun. 1, 2009

Irvin Dawid, Palo Alto, CA

Why not just eliminate it?

I know it's "politically impossible", but let's face it, most of these jokers are about to get the axe in the next election anyway. California government is a total mess, but in times of crisis come opportunity. They have the opportunity to do something politically courageous for a change: 1) drop Prop 13, 2) sell/privatize their highway system and other infrastructure to raise revenue, and 3) amend the state Constitution to prohibit ballot box public policy (a procedure which is proof that the average voter doesn't understand trade-offs - do you want more services or lower services? The answer of course has always been "yes" to both.), and 4) at least freeze, if not cut spending in nominal dollars.

If they can't do it, get ready for the Obama/Bernanke money printing train to come to a CA locale near you.

Not Going to Happen

Prop 13 is terrible, it was a huge windfall to those Californians who owned property in 1978, but now and potential savings for new folks is just capitalized into higher homes prices (i.e. everyone buying property now is just paying higher prices than they otherwise would if prop 13 had not been in effect). However, at this point the state government of CA is basically a scam to enrich the public sector employees that infinite revenue could not satiate. So, without a constituional convention I don't think there would be much in the way of support to repeal of prop 13, even this stupid split roll idea (where will the increased costs go... straight to everybody else in the form of higher prices, lower wages and less businesses on the margin... sad that the average CA public school graduate will never understand this). Plus, these ideas are cute, but just look at where the governor was the day after the big No vote on all the intiatives... at Washington, begging for some "stimlus" cash. I think that's actually got a pretty good shot at happening given all the people/companies on the federal dole already. No real hard decisions will be made, and CA will delay the crisis until next year.

The only solution I can see is a constitutional convention, which should come up as an initiative next year. I'll throw out my ideas, for the liberal-minded: repeal prop 13, get rid of the 2/3rds majority to pass taxes rule two-year budgeting rules and scale back the initiative process. For the conservative minded: disallow public sector employee unions, put all government employees back into Social Security and Medicare, two-year budgeting process and scale back the initiative process. The already passed grand jury redistricting will help somewhat with the gerrymandered districts.

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