Dan Walters

Dan Walters

Dan Walters: Should property taxes be raised?

Published: Sunday, Dec. 2, 2012 - 12:00 am | Page 3A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

Voter approval of sales and income taxes and the advent of Democratic supermajorities in both houses of the Legislature have generated new hope among liberals that Proposition 13, the 1978 property tax limit they consider their bête noire, might be changed.

Not surprisingly, hope on the political left means fear on the right, which considers Proposition 13 to be its ideological touchstone.

Two events last week signal that property taxes are back on the political agenda.

First, Sen. Mark Leno, D-San Francisco, announced a constitutional amendment to lower voter approval on school district parcel taxes – a specialized form of property tax – from two-thirds to 55 percent.

Other legislative leaders, such as Senate President Pro Tem Darrell Steinberg, have already endorsed such a change.

It would be a modest change in one rarely used form of property tax, but its fate would signal whether enough Democratic legislators are willing to breach the property tax firewall, and if they are, whether voters would agree.

A change for school taxes would have the best chance of success, since education is the most popular government activity – which is why Brown & Co. used it in the campaign for higher income and sales taxes.

And should it go all the way, other changes in property tax restrictions would certainly follow. Cities, counties and special districts also would like to lower the vote margin for parcel taxes.

The second event was release of a report by the Legislature's budget analyst on the state's property tax system, suggesting that the way $55 billion a year in local property taxes are distributed, adopted 30-plus years ago, may be outdated.

The report, which delves deeply into the arcane property tax picture, could be considered a primer for any talk about changing it.

So should property tax restrictions be lowered or repealed? Should we adopt a "split roll" that would remove Proposition 13's limits for commercial property?

And, most important, are California's property taxes too low?

Proposition 13's property tax rate – 1 percent of value plus bonds – is 28th among the 50 states, according to a recent study by the Minnesota Taxpayers Association. The range is 3.5 percent in Michigan to 0.23 percent in Hawaii.

However, because California's property values are generally higher than those in other states, our actual bills are also higher than the rate would imply. The tax bill for a median-priced home in California is the 10th highest in the nation, the Minnesota study found.

Finally, the $55 billion in property tax revenue is 11 times what it was after Proposition 13's passage, slightly more than growth in state income and sales tax revenue during that period, despite the rate limit.

Let the debate begin.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Dan Walters



Dan Walters, political columnist

Dan Walters

Dan Walters has been a journalist for more than a half-century, spending all but a few of those years working for California newspapers. At one point in his career, at age 22, he was the nation's youngest daily newspaper editor.

He joined The Sacramento Union's Capitol bureau in 1975, just as Jerry Brown began his first governorship, and later became the Union's Capitol bureau chief. In 1981, Walters began writing the state's only daily newspaper column devoted to California political, economic and social events and, in 1984, he and the column moved to The Sacramento Bee. He has written more than 7,500 columns about California and its politics and his column now appears in dozens of California newspapers.

Email: dwalters@sacbee.com
Phone: 916-321-1195
Twitter: @WaltersBee

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