A change to Proposition 13 that homeowners can get behind
Could a reassessment of Proposition 13 finally be in the wings?
Advocates of the long-needed change have their fingers crossed, now that a measure to revise Proposition 13 has qualified for the November 2020 ballot.
The initiative wouldn’t involve a wholesale review of the 1978 tax-cutting proposition; that’s still considered a politically impossible lift in a state where property tax breaks have become embedded in millions of homes and apartment buildings.
Instead, the measure takes aim at what long has been considered the Achilles’ heel of Proposition 13, namely its treatment of commercial and industrial properties. The idea is to create what’s known as a split roll, in which residences retain their imperviousness to reassessment but business properties don’t.
How long should we allow commercial properties to be assessed at 1975 values, costing local governments and schools billions of dollars?
PROPOSITION 13 CRITIC LENNY GOLDBERG
“My instincts tell me that the split roll is moving into more positive ground,” Los Angeles Assessor Jeffrey Prang told me, “and if next year there is a big Democratic turnout, that is likely to benefit the initiative.”
The proposal would require that commercial and industrial properties be assessed at full market value and reassessed at least once every three years. That’s a big change from the current law, which allows them to be reassessed only upon a change of ownership.
“That’s a ridiculous, outdated, irrational system which causes damage in many different ways,” says Lenny Goldberg, a veteran critic of Proposition 13 who helped craft the new initiative. “We have this huge hole in the heart of our tax system.”
He’s right. Thanks to Proposition 13, massively profitable commercial properties that haven’t changed hands in decades — Disneyland, say — are billed property taxes at 1970s-vintage assessed valuations while homes and businesses around them have much higher bases.
Changing that system could produce as much as an additional $12 billion in tax revenues in its initial years, according to CONTINUE READING: A change to Proposition 13 that homeowners can get behind - Los Angeles Times
