A political war over taxes that’s been brewing for nearly four decades finally erupted Thursday – maybe.
A union-led coalition of liberal groups launched a campaign to change Proposition 13, the iconic 1978 property tax limit, seeking billions more in revenue from commercial and industrial property owners.
The coalition, Make It Fair, declared its intention to place a “split roll” measure on the 2016 ballot, keeping Proposition 13’s limits in place for homes, residential rental properties and farms, but allowing upward revisions in taxable values on other properties.
The “maybe” qualifier is that, privately, sponsors of the measure indicate it would be dropped if many of the same groups decide to ask voters to extend Proposition 30, the temporary sales and income tax hike approved in 2012.
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Their reasoning, probably valid, is that were the ballot to contain two major tax increases, voters might reject both.
There are also proposals for higher cigarette taxes and a new tax on oil extraction kicking around.
The backers of all the pending tax measures assume that 2016 would be a good time to make their moves because voter turnout in a presidential election year is likely to be much higher than it was in 2014 or will be in 2018 and that usually means a more liberal, pro-tax electorate.
No matter which tax measures make it to the ballot, however, they will face very stiff opposition because of their multibillion-dollar stakes. A “split roll” on property taxes could mean as much as $9 billion more a year for schools and local governments while extending Proposition 30 involves at least $8 billion a year.
The overwhelming passage of Proposition 13 in 1978 caught the state’s political leaders by surprise. Virtually all – including a young Gov. Jerry Brown seeking re-election – were opposed to the measure.
Brown called it “a rip-off … a legal morass and a long-term tax increase.” But he and other politicians quickly fell in line after its passage.
Brown rebranded himself “a born-again tax-cutter,” sponsored an immediate cut in state income taxes to align himself with voters’ mood and also signed a massive “bailout” of schools and local governments whose property tax revenue was immediately chopped in half.
Proposition 13 survived legal challenges, and decades of political sparring over its provisions ensued, with pro-spending groups attacking it as a windfall for commercial property owners and anti-tax groups defending it and pushing even tighter restrictions on taxation.
The Make It Fair coalition is exempting residential rentals and farms from higher property taxes to make the measure more palatable to voters, but there’s a tinge of irony in that exemption. Howard Jarvis, the originator of Proposition 13, was a lobbyist for apartment house owners in Los Angeles.
Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.