Just last month, the Assembly Appropriations Committee stalled action on a bill that would have indirectly changed the measure by redefining when property transfers trigger reassessment for taxes. Assembly Bill 188 by Assemblyman Tom Ammiano, D-San Francisco, was aimed at raising assessments of business-owned property when more than 100 percent of the ownership entity changed hands in a series of transactions. Current law triggers reassessment only when more than 50 percent changes ownership in one transaction.
AB 188 was a partial movement toward what tax mavens call a "split roll" - one that taxes different kinds of property differently. A full split roll, however, would require a constitutional amendment, approved by voters, to change Proposition 13's limits. Some liberal groups, especially labor unions, have proposed such an amendment, saying that it would counteract a shift of property tax burden from business property to residential property, but have not yet attempted to place one on the ballot via initiative.
Recently, a poll by the Public Policy Institute of California asked a sample of voters whether they would support basing commercial property taxes on "current market value" and 56 percent said they would. However, the California Taxpayers Association, a business-backed organization, criticized the poll's methodology, saying that using the phrase "current market value" did not "state that the proposal in question would be a massive tax increase on businesses, and did not include any context that would let respondents know that such a tax increase would result in job losses, higher consumer costs for goods and services, and higher rents for many Californians."
Cal-Tax followed up on that criticism Wednesday with a report contending that since Proposition 13's passage in 1978, there has not been, as critics allege, a shift of tax burden from business property to homes, which change hands more frequently.
The report, "Proposition 13 Revisited," which Cal-Tax says is based on data from the state Board of Equalization, concludes that homeowner-occupied property bore 41.84 percent of the overall property tax burden in 1979-70 and 39.74 percent in 2011-12. Commercial property, it says, had 58.16 percent of the burden in 1979-80 and has 60.28 percent today.
Cal-Tax's argument with those who would change Proposition 13, however, may be as much about semantics as it about numbers.
Cal-Tax includes residential rental units in its definition of commercial property, whereas those on the other side often exempt apartments and other rentals from their definitions. Increasingly, Californians are renters rather than homeowners, and if one includes rentals on the residential side of the ledger, rather than on the commercial side, the shift of tax burden cited by liberal groups may well have taken place
PHOTO: Paul Gann, left, and Howard Jarvis, hold up their hands on the night of June 7, 1978, as their co-authored initiative Proposition 13, took a commanding lead in the California primary.Associated Press file