calbuzz calls bay area council ‘chicken-livered wusses’

Calbuzz: How Con Con Could Change Prop. 13

Well they almost do, putting it on the table but not going any further. Capitol Weekly had a bit a few days back about the Bay Area Council drafting a proposal for a constitutional convention and part of the language seemed to prohibit revisiting prop. 13. We ran a short piece on it here.

Now Calbuzz has dug a little further into the matter and discovered that the BAC 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.”

So, assuming the Con Con happens, parts of Prop. 13 are up for discussion. Let’s start by talking about what is not up for discussion. Property tax rates established by Prop. 13 are to remain unchanged. Taxes will continue to be raised only when the property in question changes hands. As Calbuzz points out:

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.

Something else that is not not up for discussion, and I believe might merit a slightly more vociferous public objection, is the idea of splitting commercial and residential properties so that the commercial properties could be reassessed according to current market conditions but the house my grandpa has owned in Pasadena for the past 40 years will remain exempt. That is peachy for grandpa, but according to a New York Times article from 1988 (oh yes – we have seen this crisis coming for a long time now) while the ‘younger and less affluent’ shoulder the majority of the tax burden when they are buying a home, the benefits aren’t primarily reaped by the California’s retirees ensconced in their homes for years:

The biggest beneficiaries of Prop. 13 were not homeowners but businesses. The law curtailed assessments on all property, not just homes, and there is considerably more commercial property than residential. According to the sociologist Clarence Lo, author of a forthcoming book on tax revolts, California homeowners received just one-third of total tax relief in the first five years under Prop. 13. A whopping 57 percent of benefits went to owners of commercial and industrial property.

Thus, the guys with the biggest pockets will continue to have their low tax rates locked in and I will get to help make up for our deficit when it comes time for me to buy my first house. There is some good news though. Delegates will be able to propose changes to our current 2/3 rule for raising taxes. This is obviously one of the biggest issues and Villaraigosa mentioned it in his exit speech on CNN Monday.

Why the prohibitions, you might ask. According to Jim Wunderman, BAC Chief Executive, there are more pressing structural problems facing California and the convention needs to have the freedom to address these without being locked into disagreements over an issue that is not as serious:

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.

That’s the way they see it, at least.



4 responses to “calbuzz calls bay area council ‘chicken-livered wusses’

  1. It is a pity that Democrats are still trying to find more ways of getting money, instead of reducing spending to the level of income. Businesses already are running from California as fast as they can and Democrats now want yet another reason to avoid doing business here. I guess when you have leadership like Tax and Spend Obama, AKA Mr. TV, it should be no small wonder that you want to spend even more.

    Democrats are acting like drunken teenagers:
    1) Refusing to live within their means.
    2) Complete disregard for the impact of their actions on their future (credit).
    3) Irresponsible in that they are growing government when revenue is shrinking. Sounds like a teenager, spending more than they have budgets for?

    Take a cue from 35th Assembly candidate Mike Stoker for better behavior:
    1) Layoff non-essential California workers.
    2) Put spending caps in place so spending is 90 percent of revenue.

    There – two simple solutions that alone would take us out of our $ problems. You wont need more money from inventive taxation if you just reduce your overall headcount, and put your spending in line with your revenue.

  2. Matt, the 2/3 rule is undemocratic and Prop 13 has created an uneven playing field regarding property taxes and led to the regressive tax system we have today.

    The issue is not “more” taxes, the issue is “better”taxes”.

  3. Matt –

    I certainly agree that a plan merely to implement higher taxes is not the answer but I believe it might be part of the answer and is worth further discussion. Moreover, I agree with you that reducing our spending is critical but I am not convinced we can solely resort to slashing our way out of this crisis. We do have non-essential spending in terms of state jobs but again part of the burden should also be shouldered by the tax payers.

    I believe we should have the table open to a discussion of solutions that combine tax and cost-cutting measures. I believe we are beyond this being a partisan issue and therefore we need to set aside some partisan paradigms.

    As a responsible adult, I realize that, especially in the current economy, if there are things that need to be addressed in my household I can either make more money or cut back my spending in certain areas and reallocate my funds. However, my finances are easier to manage than the state of California’s and so a reasonable plan of combining raising tax revenues, which might be achieved through a better tax system, and reducing unnecessary spending should be explored. In light of that, the current proposal by the BAC for the con con to prohibit addressing the tax measures of prop. 13 does not seem very conducive to an open discussion on the matter.

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