by Brian Leubitz
Prop 13 is still the “third rail of California politics.” When some progressive leaders began arguing that the supermajority should look at tweaking the Property tax measure, Sen. Steinberg immediately responded that it wouldn’t happen this session. And as Warren Buffett learned during his very short stint as an economic advisor to Gov. Schwarzenegger, it still has plenty of juice.
But here is where I buried the lede in yesterday’s PPIC poll post. The poll included a question on the subject:
But one proposed reform gets majority support: 58 percent of adults and 56 percent of likely voters favor a split-roll property tax, which would tax commercial properties according to their current market value. But less than half of Californians (46% adults, 42% likely voters) favor another proposed reform, which would lower the vote threshold from two-thirds to 55 percent to pass local special taxes. (PPIC)
Now, this isn’t exactly all that progressives would want, but split role is a pretty good start. And leaders like San Francisco Assembly Members Ting and Ammiano have at least brought up the issue. Now it awaits a move up the food chain as legislative leaders need to take up the cause before it can really advance.
But what progressives are arguing for is that Prop 13 has fundamentally skewed our property taxes. By gaining consistency over time, we gave up equality between different owners. As this image illustrates, tax patterns have varied wildly. Corporations are able to fudge around the edges with structuring deals in order to avoid reassesments, while homeowners are always stuck with the latest sale price. That means there has been a huge shift from commercial property bearing a strong majority of the property tax burden to residential properties now far outweighing commercial taxes. (See these graphs; the picture to the right is the 2010 residential percentage of property taxes from that page.)
This is hardly the little old lady is going to lose her house issue, but an issue of tax equity. Commercial property owners are unlikely to see any big changes, but as the Sacramento Bee argues voters are going to be the ones that ultimately make the big changes.