CALIFORNIA
FOCUS
FOR RELEASE: FRIDAY, AUGUST 2, 2013, OR THEREAFTER
FOR RELEASE: FRIDAY, AUGUST 2, 2013, OR THEREAFTER
BY THOMAS D. ELIAS
“AT
LEAST TWO MORE YEARS OF FIXABLE PROPERTY TAX INEQUITY”
Maybe Proposition 13 really still is a
third rail in California politics, one that no one dares touch for fear it
means instant political suicide, just as surely as if through electrocution.
That’s about the only conclusion to be
drawn from the way the Legislature has handled the possibility of fixing or
changing parts of both the landmark property tax limitation measure and some of
the regulations and definitions adopted in 1979 to standardize how it is
administered.
There was plenty of brave talk about
fixing Proposition 13 early this year, after Democrats acquired two-thirds
majorities in both legislative houses. Some advocated a “split roll,” where
commercial properties would be taxed on the basis of their market values while
residential would continue to be based on 1 percent of the latest purchase
price.
There was alsoDemocratic state Sen.
Mark Leno of San Francisco purveying the idea of lowering electoral
margins needed to pass parcel taxes for education from the two-thirds majority
demanded by Proposition 13 to 55 percent, the level now required for school
construction bonds.
None of that will now happen. Maybe it
was because of the fierce opposition these proposals drew from the Howard
Jarvis Taxpayers Assn., perpetually a vocal defender of every word in
Proposition 13 and its surrounding regulations. Everyone in California politics
knows how much money the Jarvis group – named for Proposition 13’s co-author –
can raise and funnel into campaigns against those it deems unfaithful or
threatening.
Whatever the reason, attempts to make
any fixes on property taxes lurched to a halt when legislative leaders
pronounced them dead, at least for this year.
Next
year, of course, is an election year for almost everyone in the state Capitol.
With legislators’ jobs on the line, it’s hard to believe either house will
touch Proposition 13. So when the leadership says changes won’t happen this
year, they really mean nothing will happen for at least two years. And most
likely, for many years after that.
This
is because no one knows whether Democrats in two years
will have the
same size majorities they do today. If not, scratch any chance for change.
The
practical effect of all this is that today’s inequities will
continue
indefinitely. Neighbors in essentially identical homes will keep getting
radically different property tax bills, based upon price levels at their
varying times of purchase.
The
current reassessment rules – not part of the original 1978 Proposition 13, but
passed legislatively the next year – will continue. These rules often allow
sold properties to go without reassessment so long as no one individual or
corporation acquires a controlling interest when a property is sold. (Page 42
of the state Board of Equalization assessor's handbook (http://www.boe.ca.gov/proptaxes/pdf/ah401.pdf)
describes how this works).
In real life, this means limited
partners buying properties as varied as vineyards and apartment buildings often
escape the higher tax bills any home or condominium will see the moment a
residential property gets a new owner.
Even Joel Fox, the former chief of the
Jarvis group who now runs both a political/business blog and a small business
owners’ political committee, once said he liked the idea of changing those
rules, which could be done by simple majorities in the Legislature.
But
that change got virtually no consideration this year, even though estimates of
the revenue it might raise range as high as an annual $12 billion. That’s not
what a split roll might produce, but it’s still plenty. One reason for the lack
of attention: the Jarvis group and its current head, Jon Coupal, like to imply
that any slight chink in any aspect of Proposition 13 opens the way to attacks
on all of it.
So the state will keep passing up
revenue it could easily obtain and instead rely on hikes in regressive levies
like the sales tax, which hits poor people much harder than the wealthy. Local
governments and public schools, meanwhile, depend more and more on parcel
taxes, which almost always assess the same amount for each piece of property,
whether it be a one-bedroom condo or a shopping mall. How fair is that?
But courage is in short supply in
Sacramento, which means we will not even see a few simple rule changes that
could make things much more fair and equitable than they’ve been in decades.
-30-
Email
Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough:
The Most Promising Cancer Treatment and the Government’s Campaign to Squelch
It," is now available in a soft cover fourth edition. For more Elias
columns, visit www.californiafocus.net
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