Is limiting CA’n property taxes inequitable?

Jon Coupal — president of CA’s nonpartisan Howard Jarvis Taxpayers Association — posits in the OC Register that effective tax policies, like longstanding Prop 13, must be fiercely protected. While it may be vogue to call tax reduction laws unjust and inequitable, Coupal cites evidence in favor of practical, beneficial, realistic property tax legislation.

The same people who have always wanted to destroy Proposition 13 so they can raise taxes even higher are now claiming that Prop. 13 must go because it has caused “inequities.” Actually, Proposition 13 is working precisely as intended to achieve a sustainable balance between tax stability and revenue growth. That’s why for over 40 years Prop. 13 has enjoyed such consistent popularity that it has earned the moniker, “The Third Rail of California Politics.” Even after the costly and long-running campaign against it, polling reveals that 60% of Californians believe that Prop. 13 is “mostly a good thing.”

More importantly, Proposition 13 is also good tax policy. First, it limits the property tax rate to 1 percent of a property’s value. Second, it limits the annual increase in taxable value to 2 percent annually. Under Prop. 13, even if a property doubles in market value in a single year, its “taxable value,” against which the assessor applies the one percent tax rate, can only be increased two percent per year. Third, Prop. 13 requires reassessment of property when it changes hands. This provides a stable and predictable source of tax revenue to local governments which has grown virtually every year since 1978 in percentages that exceed inflation and population growth.

Detractors frequently attempt to assert that voters were unaware that Prop. 13 would apply to commercial property in the same way it protects residential property. That too is false. During the Prop. 13 campaign in 1978, opponents pressed that argument in their campaign ads and literature, and it was specifically mentioned in the official ballot pamphlet itself. Voters considered the claim and enacted Prop. 13 anyway.

Sforza quotes longtime Prop. 13 critic and split-roll advocate, Lenny Goldberg, who claims that commercial property in Orange County is underassessed. Goldberg knows better as he is fully aware that, under Prop. 13, taxable value depends on the market value at the time of acquisition. (Despite continuing his jihad against Proposition 13, Goldberg now resides out of state, avoiding the high tax burden in California).

This article originally appeared in the Orange County Register. Read the whole thing here.

Follow Opportunity Now on Twitter @svopportunity

Image by 401(K) 2012 on Flickr