Experts Debate Possible Reforms to Proposition 13
Posted on May 28, 2014
Source: , Times of San Diego, LLC - IN Politics
Source: , Times of San Diego, LLC - IN Politics
Tax and real estate experts on
Wednesday debated possible reforms to California’s landmark Proposition 13,
with views that ranged from no change to the desirability of opening a
discussion.
The panel of three experts considered
whether it is time to reform Proposition 13 at a breakfast meeting at the Wyndham San Diego Bayside sponsored by the San Diego County Taxpayer’s Association,
a non-profit taxpayer advocacy organization founded in 1945.
Proposition 13, approved by California
voters in 1978, was the brainchild of low-tax crusader Howard Jarvis. This amendment to the state
constitution freezes the tax-assessed value of properties at the time of
purchase and limits annual assessment increases to 2 percent. The amendment
passed during a period of rapidly rising property taxes that forced some
long-time homeowners to sell.
“Proposition 13 had as one of its prime
objectives keeping people in their homes,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association.
He said the amendment kept property taxes under control but was an “abject
failure” in limiting other tax increases.
Lenny Goldberg, executive director of
the California
Tax Reform Association, argued that Proposition 13 was
ultimately bad for the state’s schools, infrastructure and commercial
development, and it is time for a “data-driven discussion” of possible reforms.
“You can’t find any economist — left,
right or center — who will endorse the current system as it affects commercial
property,” Goldberg said. “We have a system that is dysfunctional with regards
to new development.”
Lou
Lollio, a commercial property broker based in Carlsbad, opposed
any changes to Proposition 13 and said he worried that opponents were seeking
small changes now in order to “divide and conquer,” adding, “I’m concerned as a
taxpayer.”
A current issue is an Assembly bill
that would change what some see as a loophole that allows commercial properties
with complex ownership to escape reassessment after a sale. This happens when a
property is sold to multiple legal entities, none of which owns more than 50
percent. The Howard Jarvis group is neutral on the bill, saying it addresses a
technical tax issue, but Lollio said he opposed any
change.
“Howard Jarvis himself said, when any
property changes hands, it should be reassessed at market value,” Coupal said,
explaining his organization’s neutral position.
Another possible reform is a
“split-roll” system in which commercial property is assessed at market value,
but residential property is not. The San Diego County Taxpayer’s Association released a report Wednesday arguing that such a
change to Proposition 13 would cost the San Diego region 2,240 jobs.
DISCLAIMER: This blog has been curated from an
alternate source and is designed for informational purposes to highlight the
commercial real estate market. It solely represents the opinion of the specific
blogger and does not necessarily represent the opinion of Pacific Coast
Commercial. www.PacificCoastCommercial.com
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