The Next Battle: Amending Prop 13

California Calls has been planning ahead, regardless of whether Prop 30 passes or not. There’s a growing frustration by voters to find real solutions to our perpetual budget crises and a growing recognition that something has to be done.

One culprit of our current tax and fiscal dysfunction is Prop 13. This 1978 initiative completely changed the California tax system. It capped property taxes resulting in billions of lost revenue, and further starved the state’s coffers through a two-thirds vote requirement to increase any taxes in the legislature. Immediately after its passage, California lost billions in revenue, and has not been able to recover funding for schools, parks, libraries and other services.

While some homeowners got a needed break on their rising property taxes, the cap on commercial property has been destructive. Huge profitable businesses that own large parcels of land – like Google and Hewlett Packard — pay a tiny fraction in property tax. The lion’s share of property tax is now paid by homeowners, and dramatic disparities exist between similar land parcels. These unexpected consequences result in billions of dollars lost to California’s schools and services every year.

According to Lenny Goldberg of the California Tax Reform Association, “Prop 13 created a situation where some of richest corporations in world are paying a trivial level of state taxes relative to a vastly increased wealth.”

For this reason, California Calls is exploring an ambitious project to research and analyze the commercial property tax in major counties and to document the disparities and problems of the current system. Stay tuned for more details post-election!