Calif. budget deficit turns spotlight on Prop. 13 (July 2 article worth another look)

[pinto]

Let's take another look at the Prop 13 loopholes...

Calif. budget deficit turns spotlight on Prop. 13
By Steve Lawrence
ASSOCIATED PRESS

1:15 p.m. July 2, 2008

SACRAMENTO – When winemaking giant E&J Gallo bought the Louis M. Martini Winery in 2002, it got a prestigious label, 1,735 acres of some of the best vineyards in Napa and Sonoma counties and a sweet tax break.

Critics cite that break as a prime example of one of the shortcomings of Proposition 13, the tax-cutting initiative approved by California voters in 1978.

The proposition rolled back property tax assessments to 1975 levels and limited annual increases to 2 percent or the change in the cost of living, whichever is less. It allows assessments to be brought up to market value when there is new construction or a change in ownership.

What Proposition 13 failed to do was clearly define what constitutes an ownership change for businesses, leaving an inviting loophole for those trying to lessen their tax burden.

The issue has resurfaced this year because California is facing a $15.2 billion budget deficit, and lawmakers are debating whether the shortfall should be closed by cuts, tax increases or a combination.

Lawmakers who favor new revenue say closing some tax loopholes should be an obvious first step.

Raising property assessments on businesses that change hands would generate additional local money for schools, allowing them to make up for cuts in state aid brought on by the state's persistent budget problems, said Lenny Goldberg, president of the union-financed California Tax Reform Association.

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[TygrBright]

1. Back when it passed, a friend of mine who lives in CA predicted...

...in so many words "Prop 13 will cause the slow and agonizing death of everything we value about living in California. It will erode our education system, limit access to higher education, kill the infrastructure needed to support a rapidly expanding population, and kick state services for the vulnerable back to the stone age."

She was right.

California today is nothing like what it was before Prop 13. And not in a good way.

sadly,
Bright

[pinto]

2. Agree. The losses came in local services, education, local funding to non-profits.

Jarvis bought and sold it to the public well and the legislature codified the commercial loophole.

Any talk of restructuring Prop 13 practically remains political anathema - yet given our current situation, that tide may be turning.

[bemildred]

3. Hey, we can keep getting screwed as long as we want to.

We voted for it to save Grandma. Corporate entities are not Grandma.