September 3, 2015
Women’s City Club
Photos are here
Video is here
Did you ever get tired of people shrugging philosophically and saying, “Life just isn’t fair”? The September League Day meeting offered a chance to make it a little fairer. If the “Make It Fair” campaign succeeds, it could add nine billion dollars to funding for schools, emergency services, and infrastructure improvements.
Why does one of the biggest economies in the world have so much trouble funding public works?
Since 1978 and the passage of Proposition 13, California per-pupil spending has fallen in rankings from the top ten to 49th in the nation. Police and fire services have been cut back. Crumbling roads, dams, and bridges are not being repaired. Emergency services are undermanned and under-equipped.
According to Steve Rohde, a constitutional lawyer and political activist, this is the result of a systematic effort to starve government, and to avoid having to debate and defeat spending bills. You can’t spend what you don’t have, right? Rohde, representing the Make It Fair campaign, spoke at the September 3, 2015, League Day to explain the movement, which the California League of Women Voters joined a few months ago. Michelle White, chair of LWV-PA’s Economic Justice committee, arranged for and assisted with this presentation. Our Board has voted to participate in the campaign.
How does Proposition 13 fit into the whole picture?
In California, we passed Proposition 13 in 1978. It was sold as a measure to protect homeowners from rising property taxes and possibly losing their homes. The measure was passed, but it did not distinguish between commercial and residential property, and the result was to give commercial property owners a huge windfall.
Residential property has a much higher turnover than commercial property, so homes are more frequently reassessed than commercial properties. The coalition, made up of more than two hundred civic, labor, and faith-based organizations, found that commercial property taxes now only represent 28 percent of property tax income and residential taxes supply 72 percent. In 1978, the ratio was 45 percent to 55 percent.
As a result of Proposition 13, a commercial property’s assessed value rises 2 percent a year, just as residential values do. A property valued at $100,000 in 1978, with the 2 percent annual increase, is assessed at $200,000 today. However, if the same commercial property were reassessed annually according to market value, it would be valued at $2,300,000.
In addition, after Proposition 13 was passed, lawyers defined a change of ownership as a transfer of at least 50 percent of the property. So over half of the commercial property in California has changed hands, but it is split between owners who each own less than 50 percent, thus avoiding reassessment. Even if the major owners are married to each other, they still pay the old property tax rate. This strikes the coalition as unfair.
What does the coalition propose?
• All commercial property would be reassessed every year, according to current market values.
• Residential property will not be touched by the change in assessment procedures.
• Rental residential property will not be touched by the reassessments.
What would the result be?
California would bring in at least $9 billion dollars more in property taxes. The increased money would be distributed to cities, counties, school districts, and other special districts. LA County would reap about $2.4 billion more a year. This is money for emergency services, housing, public health services, libraries, and schools.
How can Proposition 13 be changed?
It was a constitutional amendment and must be changed by a ballot measure. SCA5 is a bill, currently in committee, for the California legislature to approve placing the proposal on the ballot in 2016. It is being vigorously opposed by lobbyists who represent commercial property interests, placing lawmakers under tremendous pressure. If it is not approved, millions will have to be raised to gather enough signatures to put it on the ballot. We can expect a lot of money to be spent to oppose the proposition, and a lot of misleading advertising.
We need League members to be informed, to share your knowledge with other organizations, to write your legislators, and ultimately, to help gather signatures to put a measure on the ballot.
See http://www.makeitfairca.com and https://www.facebook.com/MakeItFairCA
—Marty Giffen, Events Chair
