Prop. 13 reform will take clever moves

Piece written by Willie Brown. Here is the link: http://www.sfgate.com/bayarea/williesworld/article/Prop-13-reform-will-take-clever-moves-4102323.php#ixzz2EaSHKBgi.

It’s good to see lawmakers moving to fix one of Proposition 13’s biggest inequities – the tax break that treats corporations differently from homeowners. That break is one of the most unfair parts of the state’s tax code. And I should know – I helped write it. After voters approved Prop. 13 in 1978, capping property taxes for landowners, we had to sit down in the Legislature and figure out how to implement it. One of the biggest questions was how and when properties could be reassessed. We decided that should happen whenever a property was “transferred.”
When you sold your home, it was transferred to someone else. The home was reassessed, and the taxes for the buyer were increased accordingly.

What we did not realize was that corporations don’t actually transfer property – they transfer the stock in the company that owns the property. And Prop. 13 didn’t apply to stock. The result is that corporate property that existed in 1978 is still being taxed based on 1978 assessments – even property that has changed hands time and again. That means a disproportionate burden of California’s property taxes is falling on homeowners.

The remedy, as suggested by Assemblyman Tom Ammiano, D-San Francisco, would be to change the definition of a transfer. With Democrats now controlling two-thirds of both the Assembly and state Senate, they could do that without having to worry about no-tax Republicans.
But they’ll have to be very clever at how they go about it – and having someone like Ammiano carry the ball may not be the way to do it.
The problem is that any effort to “repeal” Prop. 13, no matter how reasonable, still has lawmakers quaking in their shoes. What the Democrats need to do is basically make a racehorse look like a donkey.
If I were in charge, I’d come up with a bill redefining that single word, “transfer.” And I wouldn’t have Ammiano or anyone else with a long history of supporting tax hikes carry the bill – I’d pick the most conservative Democrat I could find and have him do the job.

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