COMMENTARY | In a Los Angeles Times editorial, author Jim Newton questioned why Proposition 13 should be "sacrosanct." The answer is simple: California homeowners and businesses cannot trust Sacramento politicians with their property taxes. Need proof?
The California Tax Data site takes you on a brief trip to California before June 6, 1978. While the property tax rate sat at 3 percent, there were no caps on ad valorem increases on a home's market value. Reassessments resulted in "50 percent to 100 percent in just one year," which led to sticker shock when the tax bill arrived. When two-thirds of California voters approved Prop. 13, they affected a far-reaching change. Annual property tax increases were capped at 2 percent per year. Taxes became predictable -- and affordable -- for homeowners and business owners on a tight budget.
Enter the permanently broke Golden State. Controlled by a variety of unions and special interest groups that have made puppets out of Sacramento legislators, the battle cry is "For the children!" Prop. 13 has been blamed for mismanaged public schools and crumbling infrastructure. Now taking a new tact, detractors try to neuter the taxpayer initiative by attacking its applicability to businesses. To be fair, Newton's assertion that businesses are not paying their fair shares -- a familiar battle cry in California politics nowadays -- of property taxes is not new.
It was championed in 2010 by Bigger Pockets blogger Florence Foote, who asked -- perhaps somewhat naively -- "where would they go," when considering politicians' worries that business would "desert the state en masse if any changes were made to Prop. 13." Well, the Orange County Register answered this question in March: "Texas, Nevada, Arizona, the Midwest or Oregon." Small and large businesses alike are fleeing the state like rats deserting a sinking ship.
To this end, mucking about with Proposition 13, ostensibly to close loopholes and get greedy corporations to pay up and support education, is just more proof that special interest groups are sawing off the branch on which we are all precariously perched. I do not trust Sacramento politicians with my property taxes; and I do not trust lawmakers to incentivize the business climate in the Golden State.
Sacramento, until you figure out how to live within your means, stop trying to support your spending habit by picking away at the few laws that protect taxpayers.
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