CCWC is opening its Tuesday lunch twitter talks (#TT) to all candidates running for governor of California. We welcome the opportunity to get to know the candidate’s followers and to share ideas on the way forward in Sacramento. If you are running for governor and would like to lunch with CCWC, please let us know which Tuesday you are available and we will spread the word to our members, readers and followers as to the when and the where.
Here’s a great piece from the LA Times in 2003. Sure, keeping property taxes low can help businesses but the disparity in the market place is staggering!
SACRAMENTO — It’s no wonder Disneyland’s owners call their amusement park the “happiest place on Earth.” For much of its land, Disney pays only a nickel per square foot in property taxes.
In Hollywood, Capitol Records pays a dime per square foot in taxes on the land beneath its famous tower, which resembles a stack of records on a hi-fi. In downtown Los Angeles, owners of the Wells Fargo Center pay about $1.77 a square foot.
imagine what this means for politicians and political movements…stay tuned
If there is an upside to the failures of the current administration in Sacramento, it is the chorus coming out of the press, progressive blogs and grassroots organizations of all stripes that the time has come to fix our government. CCWC will support the candidate who brings these reforms to the forefront of their campaign.
There are several factors that contribute to the state’s recurring inability to deliver an on-time, balanced budget. Among them:
— Partisanship: California’s gerrymandered legislative districts tend to protect incumbents and encourage more political extremes – Republicans on the right and Democrats on the left with less incentive to reach out to the political middle, much less compromise at the Capitol.
— Term limits: Proposition 140, passed in 1990, limits legislators terms to six years in the Assembly and eight in the state Senate.
— Ballot-box budgeting: Initiative-loving Californians mandated set-aside funding for all kinds of single-interest issues, from education to stem cell research.
— Prop. 13: The 1978 landmark law slashed commercial and residential property tax rates, shifting state reliance to other more volatile sources.
— The two-thirds majority rule: The Golden State is one of just three states that require a two-thirds majority vote from each legislative house to pass budgets.
To all candidates considering a run, we are committed to these reforms. We are less interested in what you have accomplished in the past and are focused squarely on what you plan to do to “fix” our government.
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.