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How Con Con Could Change Prop. 13

Jun24

jimwundermanAfter reading, at Capitol Weekly and Calitics, that the Bay Area Council’s proposal for a constitutional convention would take Proposition 13 off the table, Calbuzz was limbering up to smack the BAC around as a bunch of chicken-livered wusses.

But first we thought we’d do what we like to refer to as “actual reporting.”

And after a wide-ranging investigation, involving two telephone calls and a couple of emails, Calbuzz determined that while the council is suggesting limits on how the convention could change Prop. 13, it is not suggesting a complete ban on changes, as the Capitol Weekly headline says: “Constitutional overhaul would omit Prop. 13 property tax changes.” .

You can understand the confusion, however. There are at least three key elements of Prop. 13 that are often discussed in debates about amending the 1978 tax cut measure: the process for fixing residential rates; the possibility of a “split roll” that assesses residential and commercial properties differently; the two-thirds vote requirement for new taxes.

Here’s what the BAC’s working draft of a convention call says:

“Delegates to the convention shall be prohibited from considering and propose (sic) revisions to the Constitution that would affect
a. Property taxes associated with Proposition 13.
b. Any other direct increases in taxes”

According to Jim Wunderman and John Grubb of the BAC, the proposal — a working draft document — is meant to suggest that delegates to the constitutional convention would not have authority to propose property tax increases as part of their agenda. In other words, property tax rates as established by Prop. 13 would not be on the table.

This means that, at least in the council’s version of a convention call, delegates could not change Prop. 13’s prohibition against a tax increase except when properties change hands. So the oft-reported, two-adjoining houses-pay-very-different-tax-bills situation, in which one neighbor’s taxes are pegged to 1% of a 1975 assessment and the guy in an identical house next door pays 1% of 2009’s assessment, would not change.

Nor would the convention address the notion of splitting the property tax roll, allowing residential rates to remain in place but recalculating commercial and industrial property tax rates based on current values. “It’s an equity issue,” says Wunderman, the BAC chief exec – speaking for his corporate constituents.

But the BAC proposal would not prevent convention delegates from proposing a change in the system by which local jurisdictions are now required, under Prop. 13, to obtain a two-thirds vote for special-purpose tax increases.

“Our view is that local governments don’t have enough authority to fulfill their missions and mandates,” Wunderman said. “We generally believe thresholds (for passing tax measures) should be reduced.”

Wunderman said the current proposal – which would not make property tax rates a part of a convention’s agenda – is designed to minimize political opposition on an issue that is not as serious a structural problem as others that need to be addressed. “That’s the way we see it,” he said.


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There are 7 comments for this post

  1. [...] June 24, 2009 · Leave a Comment Calbuzz: How Con Con Could Change Prop. 13 [...]

  2. avatar OC Progressive says:

    Citizens for Tax Justice got this exactly right, in one of the presentations to the Parsky commission; curiously or conveniently, they ignored the best advice they got.

    Reforming California’s property tax, even on a revenue-neutral basis, would significantly improve the fairness of California’s tax system. The gross unfairness imposing widely different taxes on similar homes and businesses should be gradually ended by repealing the current limits on assessment increases.

    In my opinion, this is the only politically possible change that can be made to Prop 13, and after reading the testimony at the Parsky Commission from the Santa Clara County assessor about the cost of implementing a split roll, I was even more convinced. Doing something as simple as changing the annual increase in assessed value from 2% to 3% or CPI in the name of fairness and common sense.

    And thanks to the Calbuzz / Calitics cage match of snarky comments for pushing me into the original source material rather than being content to read what people said about the source material.

    The essence of new journalism is the ability to point us to the real sources, and ferret out additional information.

    As I’ve commented previously, I don’t know what we did without Calbuzz. The experience you guys bring to the table is invaluable.

    Thanks!

    • avatar OC Progressive says:

      Erroneously thought I could use blockquotes, but this part was a quote from the Citizens for Tax Justice presentation.

      “Reforming California’s property tax, even on a revenue-neutral basis, would significantly improve the fairness of California’s tax system. The gross unfairness imposing widely different taxes on similar homes and businesses should be gradually ended by repealing the current limits on assessment increases.”

  3. avatar jskdn says:

    Here’s what I submitted to RepairCalifornia.org:

    “If the constitutional convention is representative of the electorate, why does the Bay Area Council have to limit their activities at all? If the convention has that representational legitimacy, that is they are chosen in some random way to create a scientifically accurate sample of the electorate that will be called upon to later ratify whatever they produce, why should a body that doesn’t have representational legitimacy, like the Bay Area Council, substitute their judgment for the conventions? It seems the convention should be able to deliberate and consider whatever changes to the laws and constitution it wishes. I would expect those who perform that duty to consider political realities when deciding what if any legislation or constitutional changes they want to put before the voters. After all isn’t this about creating some body that voters can trust because our existing political system lacks that? Yet the constraints being considered suggest the promoters of the concept don’t have that trust. If you don’t trust them to do the right thing, why should voters? “

  4. avatar 1Greensix says:

    Since major corporations and big landowners paid for Prop 13, and have been the major recipiants of its tax breaks, they should pay for their lack of increased taxes by a corresponding decrease in government services. Corporate farms should not recieve police protection, nor road improvements, nor government water. Big businesses shouldn’t get fire or police protection from local governments. Let them supply their own protection. Don’t fix roads in industrial area nor out in the country where the large farms are located. I’m sure these conservatives don’t mind reducing services for the state’s poor, elderly, young, and sick, so why shouldn’t their services be reduced also. Anyone with any common sense knows that Prop 13 was sold to California’s voters as a way for the elderly and middle class to reduce their taxes, but no one happened to mention that it was the state’s wealthiest families that would harvest the fortunes of tax breaks.

  5. avatar miquel95929 says:

    I think everyone is in a California’s busted bubble that could crash just like the Housing Market or Wall Street. All we need are a few corrections:
    1) A Governor who can govern. I used to think we were stuck w/ the current one till Jan 2011 but I’ve seen the light. Send him to Argentina – he even has his own plane. Let the LTG do the job til the 10TH opens up. 2) Get Rid Of 2/3RDS for Both Budgets & Taxes. 3) Modify 98 so that funds that are debt service do not count toward the cap – at least for a while. Try these 3 simple remedies plus a little time and then see where we are. There’s always time for major surgery later.

  6. avatar Wally says:

    Bifurcating business property taxation will only drive still more business out of this state. Eventually, the only “business” that will remain in this state is government. It will be interesting then to watch government employees tax each other for their huge wages, benefits, and 100%-at-age 50, COLA adjusted retirement plans.

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