California state senators to propose overhaul of Prop. 13

[alp227]

Source: LA Times

Two Democratic state senators plan to introduce legislation Wednesday to overhaul Proposition 13, the state's landmark restrictions on property taxes, so local governments can raise more revenue from commercial and industrial properties.

The measure would allow for regular reassessments of offices, factories and other buildings, ensuring that they are taxed at closer to current market value. Currently they're reassessed only when there's a change in ownership.

The change would not apply to residences or agricultural property, and there would be new tax breaks to help small businesses.

If approved by the Legislature, the measure would be placed on the ballot in November 2016. The measure is authored by Sens. Loni Hancock (D-Berkeley) and Holly Mitchell (D-Los Angeles), and is backed by the Make it Fair campaign, a coalition of unions and activists who have pushed for changes to Proposition 13.

Read more: http://www.latimes.com/local/politics/la-me-prop-13-20150610-story.html

[question everything]

1. It should start from scratch

Since its passage in 1978 it has been revised many times, like giving seniors a break.

Warren buffet once said that he had a house in Laguna Beach, I think, that was worth a lot of money but his property tax was ridiculous.

[Cleita]

2. Yes.

I think rich guys with second homes and out of state guys like Buffet, Mitt Romney and John MCain with expensive properties they own here should pay a good percentage higher for the privilege, not to mention various assorted ME oil princes and those from Asia, who also own a whole lot of millions of dollars of real estate here and are only paying 1% in taxes.

[still_one]

9. People were losing their homes before Prop 13 because property taxes were too much. Now it is the

housing itself that is too expensive, and people can't afford it

[Spitfire of ATJ]

3. Had to include this...

That bastard caused an incredible amount of damage.

Californians stuck in a commute because their job changed cities while they stayed in the same home to keep their property taxes low. I knew someone who commuted from Redlands to Garden Grove. (120 miles a day)

[merrily]

4. So the Cali legislature finally admits that government cannot provide much without tax money

and taxes must increase as prices increase. Welcome to the real world.

[SunSeeker]

5. Prop. 13 needs to be repealed period. nt

[still_one]

10. no it doesn't. Modified and reformed, but prop 13 came about in the first place because folks were

losing their homes because of high property taxes

[SunSeeker]

12. That reason was used as a Trojan horse to get this horribly regressive tax scheme passed.

First, it is simple enough to pass a law that protects the elderly and the poor from rising property taxes. We don't need Prop. 13 to do that.

Prop.13 put in the disastrous requirement that the legislature must have a supermajority (66%) to pass any taxes. Republicans are a minority, but there's enough of them to prevent tax increases under those rules. Starved for funding, CA schools went from best in the nation in the 1970s to near the bottom now.

Prop. 13 set the property tax basis upon which property taxes are assessed at 1978 property value levels, to be increased by tiny increments each year or to market value upon change of ownership. So that's why my neighbors down the street pay half the property taxes that I pay even though our houses have the same value--they bought their house before I bought mine. That is not fair.

But even more unfair is the treatment of business properties. They are held by corporations, often corporations created for the sole purpose of holding that property. Corporations live forever, unlike humans, so that change of ownership provision hardly ever comes into play for businesses. That is why each year a smaller and smaller percentage of property taxes is paid by businesses, and a larger and larger percentage is paid by individuals. The proposal in the OP only seeks to ameliorate that issue, not the supermajority issue or the disparity in property taxes paid by homeowners of similarly valued properties.

Prop. 13 needs to go.

[still_one]

22. Your neighbor who lives down the street has been living in that area

longer than you, and thus paying lower taxes. If he decides to move to another place in California he will pay a new property tax rate based on the price of the new house, his age, and county if it allows seniors to be grandfathered in at their current rate. Not every California county allows it, and the price difference cannot be more than 20% to qualify for the same tax rate

[SunSeeker]

25. So? Why should the law allow them to pay less property taxes than me? nt

[still_one]

26. Because that is the law, and most in California support it. It is also a constitutional amendment

so I would not hold my breath that it will be repealed

[SunSeeker]

28. It is an unjust law, transferring the tax burden from the rich to the middle class.

But you're right, even this feeble attempt at reform will not pass with people not understanding the issues with Prop.13 and eating up the Prop. 13 propaganda sponsored by the rich and corporations.

[Recursion]

17. Didn't it require a supermajority to raise any taxes? There's no way

that a simple majority should be able to then require a supermajority to change what it voted in.

[jeff47]

20. Yes. You needed a 67% or 75% majority to raise taxes in the legislature.

(I forget if it was 2/3rds or 3/4ths off the top of my head)

Ironically, that caused Democrats to turn to the most batshit insane Republicans to get bills passed.

"You want $100k to study if the Federal Government is using HAARP to control ghosts that move your tomato plants around and disrupt your Chi? Sure, if you vote yes."

[CountAllVotes]

21. +1,000

n/t

[JDPriestly]

6. If taxes rise on our house, we will be forced to move to another state.

We've lived in California a long, long time. I'm not sure whether the proposed law could survive a court challenge.

[gcomeau]

7. You're not sure...

...whether a law to assess taxes based on market value of what is being taxed could survive a court challenge?

I'm not sure what possible grounds any court challenge would even be based on?


(And it's not talking about residential properties)

[JDPriestly]

8. I'm not sure whether a law that requires that taxes on individuals rise only at a certain rate

like 1% per year (I'm not sure what it is, but our taxes do rise each year) while requiring that commercial properties be taxed at a rate that is regularly adjusted to market value will pass a court review. I don't know. Maybe it would, but I am not sure about it.

[SunSeeker]

13. There is a rational basis (the applicable standard) for treating corporations differently.

Business properties are held by corporations, often corporations created for the sole purpose of holding that property. Corporations live forever, unlike humans, so the Prop. 13 change of ownership provision that allows the property basis to be reset to market value hardly ever comes into play for businesses, unlike with individuals. That is why each year a smaller and smaller percentage of California property taxes is paid by businesses, and a larger and larger percentage is paid by individuals. It is OK to "discriminate" against businesses (they are not a "suspect classification" like race or sex); the legislature just needs a rational basis for doing so. Corporations' artificial nature and immortality, and the havoc that plays under the current Prop. 13 scheme, is that rational basis.

[JDPriestly]

14. Good argument. But is there some decision about taxes that lead to Prop. 13?

I vaguely remember something. I'm glad you are responding to my post. Wasn't there some case on this issue? I'm too lazy right now to look this up. I have some hazy sort of memory on this, but I am very unsure of it.

On second thought, was the problem created by Prop. 13. And can the legislature now change the law established by Prop. 13? I have not been paying attention to these issues. Did Californians change the requirements for changing tax laws?

[SunSeeker]

15. Californians only changed the 2/3 vote requirement for passing budgets.

Jerry Brown championed a proposition when he came into office that changed back the required vote for passing budgets to just a simple majority. The 2/3 vote requirement for passing new taxes, or any increases in any existing tax, is still the law. Prop. 13 enshrined that in our Constitution.

[JDPriestly]

16. Thanks.

[still_one]

11. That is the problem, and you aren't alone

[CreekDog]

23. taxes will rise on your house even if the law isn't changed

Real estate in this state is rising and your taxes can go up 2% per year.

Perhaps you mean you can't pay 1% on the full market value of your house right now.

[JDPriestly]

24. You are right.

That's what I meant.

[bemildred]

18. Long overdue. nt

[olddots]

19. Jarvis was the scum of the earth

a Reagan turd maggot extrodinaire Prop 13 destroyed L.A. more than the rest of the state but hopefully things can turn around eventually .

[not fooled]

27. Good news

Jarvis used the idea of Grandma losing her house as a Trojan horse to enact the true intent of the measure, shielding commercial properties from taxation and gradually shifting the burden to homeowners. He (or his handlers) could easily have constructed P13 differently if they had so desired.

Republicans: even when you think they're doing something good for you, it's the opposite.

[roamer65]

29. Does CA have a graduated income tax?

If you don't, you should. If you do, you should raise it significantly on higher income people (aka the rich) and corporations. Repeal Prop 13 on commercial and business properties and they will leave the state. Repeal it for regular folks and your homeless rates will go up. That is economic reality in our global unfair trade environment.

I really REALLY want a graduated income tax here in MI that significantly hits the higher incomes, but not until we have a Democratic legislature and governor. It requires a constitutional convention.