Proposal just Act 1 of effort to get rid of Prop. 13
By CAROLYN CAVECCHE | Orange County Register
June 14, 2015 at 12:00 am
California voters in 1978 approved the people’s initiative to limit property taxation – Proposition 13. While Sacramento politicians have managed to keep California taxpayers at the top level of just about every other type of tax, we rank 19th nationally for property tax burden.
One can only imagine where we would rank without Prop. 13 in place. And that is precisely what the politicians in Sacramento would like us to discover. High-tax proponents have introduced Senate Constitutional Amendment 5, which will create a “split-roll” property tax system. It would raise a projected $9 billion more in tax revenue by taking business properties out from under the protections of Prop. 13.
The proponents of SCA5 will attempt to convince homeowners that under Prop. 13 they are being unfairly taxed.
Except, they are wrong. Data from the state Board of Equalization shows that business and nonhomeowner-occupied properties pay the largest share of property taxes under Prop. 13. A study done by the California Taxpayers Association shows that the assessed value of those same properties has grown at a higher rate than homeowner-occupied properties.
A split roll will have a terrible impact on our state’s economy. It would increase the cost to do business in a state already ranked as one of the worst in the nation for businesses.
California businesses, both corporate and family-owned, large and small, cannot afford to be hit with a significant tax increase. CalTax has reported that taxing commercial and business properties without the protections of Prop. 13 would result in $71.8 billion in reduced economic activity and a loss of almost 400,000 jobs over the first five years alone.
How will skyrocketing, unstable property taxes affect every store you shop in and each business you frequent? They will not be able to absorb the increased costs without passing them on to you. California consumers should not have to bear the burden of higher prices because Sacramento cannot live within its means.
The unfair subjective tax policy of a county assessor determining your property value based on highest and best use is what fueled the Prop. 13 tax revolt. Many taxpayers will not be able to afford to keep their businesses open with a return to this arbitrary subjective system.
Furthermore, Sacramento is currently awash in “extra” tax revenues. According the state’s Legislative Analyst’s Office and other sources, it’s anywhere from $4 billion to $8 billion this fiscal year.
There will never be enough. Once businesses are no longer protected under Prop. 13 the only source left for additional property taxes will be homeowners.
SCA5, introduced by Democratic Sens. Loni Hancock of Oakland and Holly Mitchell of Los Angeles, will need to pass with a two-thirds vote of the Legislature, which is not likely to happen. So why even introduce a split-roll bill? Because organizers of a voter initiative for the 2016 ballot want taxpayers to pay for all the research and legal language needed to write their initiative.
Look for that group to start a signature drive under the guise of “Making it Fair” using the language of SCA5 written by the Legislature’s staff and paid for by California taxpayers.
Signature gathers will be standing in front of stores asking for you to sign their petition. Let them know you are not interested in signing anything that will drive businesses out of California, raise prices for consumers and put the first nail in the coffin of Prop. 13.
Carolyn Cavecche is president and CEO,
Orange County Taxpayers Association.