Once again the alarmists are out crying wolf over alleged
dangers to Proposition 13.
Once again the alarmists are out crying wolf over alleged dangers to Proposition 13.
A supposedly “liberal” think tank proposes that Californians “revisit Proposition 13,” warns Jon Coupal in a recent essay. Coupal is president of the Howard Jarvis Taxpayers Association, named for the anti-tax gadfly who co-authored Proposition 13 in 1978.
If there were no perceived threats to Proposition 13 and its limits on property taxes, Coupal and his staff would have great difficulty raising the funds needed to keep them employed.
“Most property taxpayers understand intuitively that ‘revisiting Proposition 13’ is code for doing away with the protections that provide security to homeowners,” says Coupal.
Maybe that’s what homeowners do understand when they hear about any proposed revisions to the landmark proposition.
But as the Jarvis association has done for more than 20 years, Coupal is crying wolf. For there is no threat to any protection Proposition 13 now provides homeowners, nor has there ever been.
Yes, some legislators have suggested changes both in the regulations enacted after Proposition 13 and in the initiative itself. But no one has ever seriously proposed doing away with the essence of the measure, which limits property tax to 1 percent of either the 1975 assessed value or the latest purchase price, with a 2 percent rise in the tax permitted each year.
Rather, there are only two serious reform proposals afloat today, and one has been almost choked to death. The most likely alteration might be a proposal to change the regulations enacted in 1979 to define what constitutes a change in property ownership for tax purposes.
As it stands, those rules allow many limited partnerships and merged corporations to pay property taxes based on very old assessments, even though control of their properties may have passed through a variety of hands over the years.
Closing that loophole alone could produce between $3 billion and $12 billion per year for local and state governments, depending on how many properties are bought and sold each year. But bills to make this change have gone nowhere when brought before the Legislature in each of the last three years, even though they would change nothing for homeowners.
There is also the “split-roll” plan that’s been bandied about since 1980, when former Democratic Assemblyman Tom Hannigan of Solano County first suggested it. This idea would have business and commercial properties taxed at a higher rate than homes.
A ballot initiative aiming to make this change circulated last spring, but the California Teachers Assn. pulled it last month without submitting any of the signatures gathered for it, preferring to concentrate on fighting Proposition 75, which would crimp its use of member dues for political purposes.
Even if a split roll plan had qualified for next June’s vote and passed, though, it wouldn’t have changed a thing for homeowners.
The main argument against both these proposals is that forcing businesses and landlords to pay more property taxes will result in higher costs to consumers and renters.
One counter-argument, of course, is that by letting businesses pay the same or lower tax rates than homeowners – as in today’s system – current law forces other taxpayers to pick up the bulk of the governmental tab, via sales and income taxes, user fees or other means.
These kinds of changes, completely benign to homeowners, are the only ones seriously proposed by anyone at any time since Proposition 13 passed. For politicians of every stripe are well aware that the bulk of voters are homeowners, and homeowners simply won’t vote to end their own protections.
To label the changes now proposed a threat to homeowners is just as false as calling the middle-of-the–road, always non-partisan Public Policy Institute of California – funded from the estate of the late electronics mogul David Packard – a “liberal” think tank.
Coupal, of course, disagrees. “The left has the agenda of divide and conquer,” he said in an interview. “If a split roll should ever pass, the business community will be out for property tax increases for everyone, particularly parcel taxes. I am arguing a domino theory here.”
But that’s mere speculation on his part. Reality is that just because claims of a threat to homeowners are mere figments of an alarmist imagination does not mean people will stop crying wolf when no wolf is anywhere near the vicinity.
Tom Elias is author of “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” now in an updated third printing. His email address is [email protected].
