It has been a liberal dream for decades to undo parts or all of Proposition 13, the seminal California initiative limiting the property tax rate.
Is that fight finally coming to the ballot box this fall? A coalition of civil rights and community organizations is expected to begin collecting signatures later this month for a measure to tax commercial properties at market value while leaving in place the Proposition 13 protections for homeowners, a concept known as “split roll.”
Under Proposition 13, approved by voters in 1978, state property taxes are assessed at 1 percent of the purchase price and can only increase annually by 2 percent or the rate of inflation, whichever is lower. Californians who hang onto their property for a long time can, as a result, end up paying far less in taxes than what new buyers would pay. Critics complain the state is losing out on billions of dollars per year in revenue.
The latest “split roll” proposal would instead set taxes for commercial and industrial properties, including vacant land, based on their market value. If approved by voters, it would take effect starting in 2020, and would exclude businesses whose California property holdings are worth less $2 million and companies with 50 or fewer full-time employees.
Never miss a local story.
The Legislative Analyst’s Office estimated this week that the change could increase property tax revenues by about $6 billion to $10 billion annually, though it also warned that the switch would introduce far more volatility into the funding stream. About 60 percent of that money would go to local governments and the remaining 40 percent to schools and local community colleges.
Expect a vicious and expensive campaign if the measure qualifies. The Howard Jarvis Taxpayers Association, named for one of the original proponents of Proposition 13, has labeled it an “attack” on California’s economy, and there are deep-pocketed businesses groups lined up to fight it.
How does the coalition behind the proposal, which includes groups like the League of Women Voters California not generally known for heavy political spending, plan to cope with the opposition? Spokesman Mac Zilber said they are not yet announcing their supporters, but added, “We’re confident that we’re going to be able to raise the resources we need.”
Welcome to the AM Alert, your morning rundown on California policy and politics. To receive it regularly, please sign up here.
WORTH REPEATING: “I acknowledged it. I apologized for it. I learned an enormous amount from it.” - Lt. Gov. Gavin Newsom, on his brief affair with an employee while he was mayor of San Francisco more than a decade ago
GOP DEBATE: Three Republicans running for governor debated last night and brought up their Democratic rivals’ affairs of the heart.
COST OF CARE: A state financial analysis estimated last year that it would cost an eye-bulging $400 billion annually for California to create a publicly-run universal health care system. But the California Nurses Association, which sponsored the controversial “single-payer” bill SB 562 that was held in the Assembly amid a dispute over its financing, commissioned its own study that concluded such a system would actually lead to savings on health care spending. The nurses and University of Massachusetts-Amherst economics Professor Robert Pollin, who conducted the study, will discuss their findings during the latest hearing of the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage, 10 a.m. in Room 4202 of the Capitol.
ANOTHER ROUND: Is Molly Munger back? The Pasadena attorney and philanthropist – and sister of California’s most prominent GOP donor, Charles Munger Jr. – has been lying low politically since 2012, when she spent more than $40 million on an unsuccessful initiative to raise money for early childhood and K-12 education by increasing income taxes. (It was defeated, in part, by a competing measure backed by Gov. Jerry Brown.) But on Tuesday, Assembly Speaker Anthony Rendon appointed Munger to the First 5 California Commission, which oversees the children’s health and education program created by voters in 1998. She previously served as a commissioner from 2007 to 2011.
GO FISH: After suing state wildlife officials last fall over the “skyrocketing” number of whales and sea turtles getting tangled in Dungeness crab traps, the Center for Biological Diversity will appear at the California Fish and Game Commission meeting, 10 a.m. at the Resources Building Auditorium on 9th Street, to present 11,000 letters asking California to better regulate the industry. The commission is set to receive a task force report with recommendations on Dungeness crab fishing.