Posted on 06/27/2005 9:46:34 AM PDT by NormsRevenge
SACRAMENTO -- A proposed initiative ending Proposition 13 protection for commercial property would cost Los Angeles County taxpayers more than $26 million annually to implement, according to an analysis by the California Assessors' Association.
The Tax Fairness Act has received almost $2.4 million from a group of influential public employee unions to circulate petitions placing the measure on the June 2006 ballot. Proponents say it would generate $2.8 billion per year in additional property tax revenues statewide.
A CAA review of the proposal found it would be difficult and costly for counties to implement, with counties probably having to spend money fighting lawsuits filed by owners of the reassessed properties.
Los Angeles County Assessor Rick Auerbach predicted he would have to hire 300 additional appraisers plus support staff just to comply with it. "It would be a very, very difficult thing to implement. It's a very costly thing to do."
Since its passage by voters in 1978, Proposition 13 has kept property-tax rates low by limiting their growth to 1 percent of the property's market value and allowing the valuation to increase by a maximum of 2 percent a year unless the property is sold.
The Tax Fairness Act would allow commercial property to be assessed at significantly higher rates, more in line with their current value. Revenue generated would be reserved for education, transportation-improvement projects, public safety and a property tax relief program for senior citizens.
The Tax Fairness Act would funnel 50 percent of the new revenue to K-12 education; $2.1 million of the money raised to circulate the measure has come from the California Teachers Association.
An additional $250,000 was donated by the California Correctional Peace Officers Association prison guards union, with $50,000 coming from the Association of California School Administrators.
"Over the past 30 years, corporations have been able to avoid paying their fair share of property taxes, and there has been a steady shift of the property tax burden to homeowners," said Sid Voorakkara, a spokesman for Californians for Tax Fairness, a coalition of public employee unions pushing the Tax Fairness Act.
"This would give us the ability to maintain the spirit of Prop. 13, which was to protect homeowners from skyrocketing property taxes, while at the same time generating funds that communities sorely need."
Passage of the Tax Fairness Act or other similar measures circulating for placement on the June 2006 ballot would increase the county assessor's $133 million-a-year budget by nearly 20 percent, officials said. Around 700 people are already employed; hiring 300 more appraisers and the support staff would represent an increase in personnel of about 50 percent.
Anti-tax and business advocates, meanwhile, say the initiative is unfair and would cost California jobs.
Gov. Arnold Schwarzenegger, campaigning for his budget overhaul initiative since calling a Nov. 8 special election, has said his spending control measure is needed, in part, to prevent Democratic lawmakers and their union allies from approving the kind of growth in government expenditures that could ultimately lead to tax hikes, including a wholesale or partial overhaul of Proposition 13.
"The governor has made clear he is against any rollbacks of Proposition 13 protections," said Todd Harris, a spokesman for Schwarzenegger's special-election campaign team. "He understands that whether you're raising property taxes on residences or small businesses, every working Californian will eventually have to pay the bill."
According to the Los Angeles County Assessor's Office, the value of the county's commercial and industrial property in fiscal year 2004-05 was $155 billion, with that number expected to hit $168 billion in 2005-06.
Commercial and industrial property will generate an estimated $1.7 billion in tax revenue in 2005-06, but could ultimately total $2.1 billion.
The California Assessors' Association review of the Tax Fairness Act and similar measures predicts a number of potential stumbling blocks related to implementation that present both fiscal and practical problems for county assessor offices. In addition to the increases in personnel and operating budgets, the analysis speculates that the initiative's directives could be challenged by commercial property owners en masse.
Among the concerns: Which commercial properties would be chosen to be reassessed first, as they cannot all be done at once and such properties are typically the most difficult to assess. "Regardless, there would be myriad lawsuits," the analysis argues.
Also, Proposition 13, in keeping property taxes very low, has reduced the number of appeals lodged by property owners. The reassessment of commercial and industrial property, claims the review, would engender appeals "that would once again become a very real burden for assessors."
lolol
The usual suspects, the usual activities. I am happy that they are spending (wasting) time on this stuff. Isn't going to get voter approval - even in the PRK.
Fairness? This a blatant robbery attempt by the teacher's union.
If it's on the ballot, I'll vote against it even though it is designed to "help" me as a homeowner.
It's the same scam every time: they refuse to reduce spending, so they come up with ways to try to trick us into a "more fair" scheme of increasing taxes instead.
Oppose the "overhaul" because it's a big honkin' tax hike, not because retooling a multi-Billion-per-year system will cost $20-something Million.
That's no better an argument than the Leftists' current cant against the forthcoming special elections: that they may cost $20-80 million, whereas they seek to fix a budget process of $100Billion per year.
I see the word Fair or Fairness and just chuckle.
This is true. A large fraction of commercial property is held by companies that lease the facilities. It seldom changes hands to avoid reassessment under Prop 13.
Instead of constantly repeating this, it would be more effective to point out that if they can take Prop 13 away from business, they can take it away from you, too.
And they will. Guaranteed.
Proposition 13 is and always was an "incumbant property taxpayer protection racket". It is kinda like a rent control scheme for property taxes, which is why it has such wide populist appeal.
Sold as a way to keep "local property taxes" from increasing too much, to quickly" it simply performs that function for existing property holders and only for existing property holders.
It's basic perverse affects are as follows: Take a street with 13 identical houses built at the same time. Track purchases and sales of them all since Prop 13 began, to a point where each of the 13 current owners acquired their house in a different year; with one having been there since Prop 13 began. They are each paying a different property tax; the most recent owner is likely paying 100s of times more per year than the one who has been threre all along; and many are paying $1,000s more or less than their neighbors.
It's consequential perverse affect is that its scheme, like a rent control scheme, robbed local governments of the ability to even achieve modest, inflation-based increases in the total property tax-revenue, except by increasing the absolute distance between newer and older owners to exorbitant, politically difficult levels. As a result, the normal rate of revenue increase for locally funded public education gradually became impossible, resulting in a massive shift from local funding to state funding (with more state control) of local public education.
Prop 13 has been the biggest economic blunder in the history of California. It has fed the growth of the state government, state corruption and a politically unresponsive political class - everybody sees Sacramento as incompetent but nobody wants their local property taxes to go up, so the money has to keep going to, and coming from the state with state controls.
You cannot reduce the size of the state government and increase local control in California without dumping Prop 13. It is, to use a bad pun, and "abortion" derived from populism without forethought of long-term consequences.
Repealing the three billion dollar stem cell research project would be an excellent start for one.
It's basic perverse affects are as follows: Take a street with 13 identical houses built at the same time. Track purchases and sales of them all since Prop 13 began, to a point where each of the 13 current owners acquired their house in a different year; with one having been there since Prop 13 began. They are each paying a different property tax; the most recent owner is likely paying 100s of times more per year than the one who has been threre all along; and many are paying $1,000s more or less than their neighbors.
The purchasers of those tract houses knew the new tax rate when bought. They AGREED to the new tax rate by signing the escrow documents.
Taxes are to be REDUCED for Californians....NOT raised.
.... for preexisting owners while jacking them up sky-high for new purchasers. A middle class family buying their first modest home may pay much more property tax than an old billionaire pays on his mansion.
The alternative is to tax granny out of her house. I think I prefer to limit the tax rate and the rate at which assessed valuation can increase compared to increasing the amount of money which feeds our ever growing state budget. I say that as a parent of school age children who lives in a district which would otherwise have much increased tax revenues (if rates and valuation could change). I will live with the breaks if that is what it takes to limit the state government.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
That's just the effect of a property tax. Tax assets and those without income to cover it may be forced to sell those assets. If you're feeling bad for granny, think of the young family that can't afford to move out of the projects and buy a house because they would have to pay thousands of dollars a year to subsidize granny -- and subsidize a host of millionaire landowners.
I think I prefer to limit the tax rate and the rate at which assessed valuation can increase compared to increasing the amount of money which feeds our ever growing state budget.
Or you could have an equitable system of property taxes, where all property is taxed based on a recent valuation, and your ELECTED REPRESENTATIVES control spending and thus ensure a low tax rate. Elect good representatives rather than hiding your assets from bad ones.
In my county we elected a Republican majority on the county commission. They lowered the tax rate to fully offset revaluation, and also lowered the property tax rate to offset the $ from a prior sales tax increase. Then we elected a Democrat majority who raised property taxes 10%. Does that suck? Yeah. But you get what you vote for. And everybody pays the same rate, so everybody shares in the pain or reward based on who's elected.
Low taxes for ME, but not for THEE.
Nice attitude.
If you repealed Prop 13, maybe those people who are stuck living in apartments could afford to purchase homes since they would no longer have to pay thousands of dollars of tax subsidies for millionaire homeowners with minimal property tax bills.
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