Prop 13: The Building-Sized Loopholes Corporations Exploit

January 4, 2012

SF WeeklyThe towering case of fraud was yet another unforeseen consequence of Proposition 13. Thirty-three years ago, the specter of indigent grandparents being taxed into the streets led Californians to overwhelmingly approve the ballot measure. Prior to 1978, assessors didn't much care who owned a building — property was appraised yearly and taxed based on that valuation. Prop. 13 changed things with the subtlety of a thunderclap. Property values are now essentially frozen at the year the owner obtained the real estate, and only reassessed when it changes hands. Determining ownership — and when it changes — is paramount.

And after all these years, Assessor Phil Ting admits the city is no less vulnerable. "It would be great to review a lot more properties to determine if we're missing changes of ownership," he says. "But it would be very, very difficult to detect."

In the meantime, society's wealthiest and most powerful — "the 1 percent" in the parlance of those who were until recently encamped in the shadow of One Market Plaza — exploit loopholes in Prop. 13 to grow wealthier and more powerful still. Read more.

Taxing the 1% in 2012: Why Not Reform Prop 13?

December 6, 2011

Taxing the 1% in 2012: Why Not Reform Prop 13?Thirty-three years ago, California passed Prop 13 – and it still dominates our political and fiscal realities today. Of course, the right-wing Howard Jarvis Taxpayers Association took advantage of an opening – escalating property taxes that were threatening the homes of seniors, gridlock in Sacramento and an ascendant conservative movement that elected Ronald Reagan two years later. At a different time, they may not have been successful.

So now that the Occupy movement has put “tax the rich” back on the agenda, and a new generation of activists are clamoring to make the 1% pay their fair share, what kind of electoral opportunities do we have in 2012 that will give these protests a legacy? Will this finally be our chance to reform Prop 13, whose impact will be felt for decades? Read more.

Carlsbad Group Unveils New Taxpayer Pledge

December 1, 2011

Carlsbad group unveils new taxpayer pledgeThe Promise to California Taxpayers, unveiled Wednesday by Carlsbad-based Stop Taxing Us, incorporates the Taxpayer Protection Pledge pushed by Grover Norquist and attaches language addressing two issues near and dear to Californians: Proposition 13 and taxpayer contributions to government employee retirement plans.

The Promise to California Taxpayers co-opts language from Americans for Tax Reform and goes further than the pledge pushed by the Howard Jarvis Taxpayers Association. Both documents have been praised by supporters for adding a layer of accountability to state and national politics and drawn scorn from critics for contributing to the partisan stalemates in Sacramento and Washington. Read more.

Proposition 13: Tax Breaks For The Big Boys

November 7, 2011

California Progress ReportIn the meantime, the share of the property tax burden borne by homeowners has grown; the part paid by commercial property has continued to go down.

In Santa Clara County, the booming Silicon Valley center of high tech, where the proportions were roughly even in 1978, residential property owners now pay about 65 percent of property taxes; commercial property pays 35 percent.

In Los Angeles County, where residential property owners carried just over half the burden in 1975, they now pay nearly 70 percent of all property taxes. In Contra Costa County, it’s gone from 48-52 in 1970 to 73-27. Read more.

Bloomberg: California Diminished by Tax Revolt of 1978 Shows How U.S. Invites Decline

October 17, 2011

BloombergCalifornia voters approved Proposition 13 to rein in property taxes that had doubled in 10 years. More than three decades later, that rebellion has mortgaged the state’s future, saddling it with the nation’s highest debt and lowest credit rating.

The measure led to reductions that dropped per-student school spending from seventh to 29th nationally, prompted cities to pursue sprawling retail development to compensate for lost revenue, and pushed the state into budget gridlock, including a $705 million revenue shortfall announced Oct. 10, by requiring two-thirds approval for any tax increase. Read more.

Prop. 13 changes could become a necessity

September 20, 2011

Proposition 13 Close the LoopholeTaken together, these threats could lead to a new budget shortfall of at least $6 billion, which would trigger even more massive disruptions of government functions than already seen. Courtrooms could be shut down by the hundreds, delaying judgments in all manner of cases from divorces to traffic tickets to small claims, large lawsuits and murders. Public universities and colleges would likely have to raise tuition far beyond the 21 percent increase students are paying this fall. There would be further layoffs of police, firefighters, teachers, sewer workers, librarians and many other categories of public employees.

When this happens, it may become time for a hard look at both Proposition 13 itself and its associated enabling regulations. Read more.

Businesses benefit as property tax reviews bog down

September 8, 2011

Proposition 13 Close the Loophole

The 2008 acquisition of Anheuser-Busch Cos. by Belgium's InBev, a deal worth $52 billion, created the largest beer company in the world.

It also created a potential boon for cash-strapped local governments in California — allowing them a rare chance to reassess the 1,022 acres owned by Anheuser-Busch in California and tax its 14 parcels at current market value.

"Counties are losing millions of dollars on these loopholes, there's no question," San Francisco County Assessor-Recorder Phil Ting said. Read more.

Mercury News editorial: Tax reform -- including Prop. 13 -- must be part of California's budget fix

August 22, 2011

merclogo.png.pngAccording to a 2010 study by the California Tax Reform Association, the share of property taxes paid by homeowners has climbed in nearly every county since Proposition 13 passed in 1978. In Santa Clara County, the residential share jumped from 50 percent to 64 percent, even as industrial and commercial growth spiked.

The association's study found numerous examples of private equity buyouts, corporate purchases and bank mergers that were structured to avoid reassessment, which is only triggered when 50 percent of a property is purchased by a single owner. So if a business is sold to four people, its assessed value stays low -- as do its property taxes, a luxury homeowners don't get. Closing this nonsensical loophole could bring some $2 billion a year for schools, public health and safety, and provide room to lower residential taxes. Read more.

Mercury News editorial: Tax reform -- including Prop. 13 -- must be part of California's budget fix

merclogo.png.pngAccording to a 2010 study by the California Tax Reform Association, the share of property taxes paid by homeowners has climbed in nearly every county since Proposition 13 passed in 1978. In Santa Clara County, the residential share jumped from 50 percent to 64 percent, even as industrial and commercial growth spiked.

The association's study found numerous examples of private equity buyouts, corporate purchases and bank mergers that were structured to avoid reassessment, which is only triggered when 50 percent of a property is purchased by a single owner. So if a business is sold to four people, its assessed value stays low -- as do its property taxes, a luxury homeowners don't get. Closing this nonsensical loophole could bring some $2 billion a year for schools, public health and safety, and provide room to lower residential taxes.

Welcome!

January 4, 2012

SF WeeklyThe towering case of fraud was yet another unforeseen consequence of Proposition 13. Thirty-three years ago, the specter of indigent grandparents being taxed into the streets led Californians to overwhelmingly approve the ballot measure. Prior to 1978, assessors didn't much care who owned a building — property was appraised yearly and taxed based on that valuation. Prop. 13 changed things with the subtlety of a thunderclap. Property values are now essentially frozen at the year the owner obtained the real estate, and only reassessed when it changes hands. Determining ownership — and when it changes — is paramount.

And after all these years, Assessor Phil Ting admits the city is no less vulnerable. "It would be great to review a lot more properties to determine if we're missing changes of ownership," he says. "But it would be very, very difficult to detect."

In the meantime, society's wealthiest and most powerful — "the 1 percent" in the parlance of those who were until recently encamped in the shadow of One Market Plaza — exploit loopholes in Prop. 13 to grow wealthier and more powerful still. Read more.

December 6, 2011

Taxing the 1% in 2012: Why Not Reform Prop 13?Thirty-three years ago, California passed Prop 13 – and it still dominates our political and fiscal realities today. Of course, the right-wing Howard Jarvis Taxpayers Association took advantage of an opening – escalating property taxes that were threatening the homes of seniors, gridlock in Sacramento and an ascendant conservative movement that elected Ronald Reagan two years later. At a different time, they may not have been successful.

So now that the Occupy movement has put “tax the rich” back on the agenda, and a new generation of activists are clamoring to make the 1% pay their fair share, what kind of electoral opportunities do we have in 2012 that will give these protests a legacy? Will this finally be our chance to reform Prop 13, whose impact will be felt for decades? Read more.

December 1, 2011

Carlsbad group unveils new taxpayer pledgeThe Promise to California Taxpayers, unveiled Wednesday by Carlsbad-based Stop Taxing Us, incorporates the Taxpayer Protection Pledge pushed by Grover Norquist and attaches language addressing two issues near and dear to Californians: Proposition 13 and taxpayer contributions to government employee retirement plans.

The Promise to California Taxpayers co-opts language from Americans for Tax Reform and goes further than the pledge pushed by the Howard Jarvis Taxpayers Association. Both documents have been praised by supporters for adding a layer of accountability to state and national politics and drawn scorn from critics for contributing to the partisan stalemates in Sacramento and Washington. Read more.

November 7, 2011

California Progress ReportIn the meantime, the share of the property tax burden borne by homeowners has grown; the part paid by commercial property has continued to go down.

In Santa Clara County, the booming Silicon Valley center of high tech, where the proportions were roughly even in 1978, residential property owners now pay about 65 percent of property taxes; commercial property pays 35 percent.

In Los Angeles County, where residential property owners carried just over half the burden in 1975, they now pay nearly 70 percent of all property taxes. In Contra Costa County, it’s gone from 48-52 in 1970 to 73-27. Read more.

October 17, 2011

BloombergCalifornia voters approved Proposition 13 to rein in property taxes that had doubled in 10 years. More than three decades later, that rebellion has mortgaged the state’s future, saddling it with the nation’s highest debt and lowest credit rating.

The measure led to reductions that dropped per-student school spending from seventh to 29th nationally, prompted cities to pursue sprawling retail development to compensate for lost revenue, and pushed the state into budget gridlock, including a $705 million revenue shortfall announced Oct. 10, by requiring two-thirds approval for any tax increase. Read more.

September 20, 2011

Proposition 13 Close the LoopholeTaken together, these threats could lead to a new budget shortfall of at least $6 billion, which would trigger even more massive disruptions of government functions than already seen. Courtrooms could be shut down by the hundreds, delaying judgments in all manner of cases from divorces to traffic tickets to small claims, large lawsuits and murders. Public universities and colleges would likely have to raise tuition far beyond the 21 percent increase students are paying this fall. There would be further layoffs of police, firefighters, teachers, sewer workers, librarians and many other categories of public employees.

When this happens, it may become time for a hard look at both Proposition 13 itself and its associated enabling regulations. Read more.

September 8, 2011

Proposition 13 Close the Loophole

The 2008 acquisition of Anheuser-Busch Cos. by Belgium's InBev, a deal worth $52 billion, created the largest beer company in the world.

It also created a potential boon for cash-strapped local governments in California — allowing them a rare chance to reassess the 1,022 acres owned by Anheuser-Busch in California and tax its 14 parcels at current market value.

"Counties are losing millions of dollars on these loopholes, there's no question," San Francisco County Assessor-Recorder Phil Ting said. Read more.

August 22, 2011

merclogo.png.pngAccording to a 2010 study by the California Tax Reform Association, the share of property taxes paid by homeowners has climbed in nearly every county since Proposition 13 passed in 1978. In Santa Clara County, the residential share jumped from 50 percent to 64 percent, even as industrial and commercial growth spiked.

The association's study found numerous examples of private equity buyouts, corporate purchases and bank mergers that were structured to avoid reassessment, which is only triggered when 50 percent of a property is purchased by a single owner. So if a business is sold to four people, its assessed value stays low -- as do its property taxes, a luxury homeowners don't get. Closing this nonsensical loophole could bring some $2 billion a year for schools, public health and safety, and provide room to lower residential taxes. Read more.

January 9, 2011

Commenting on the $28 billion budget gap, Governor Jerry Brown stated that “everything should be on the table.”  Later Governor Brown met with county officials to discuss shifting responsibility for state-run programs to the local level.  This, of course, will require providing sufficient revenue to fund these programs.  This in turn may mean reexaming Proposition 13 which, among other things, consolidated revenue-gathering responsibility to the state, leaving cities and counties dependent on the state.

November 18, 2010

Mercury NewsWith the elections over, the first challenge facing the new governor and Legislature will be to actually govern California. And if you thought the elections were hard fought, get ready for the battle of the budget.

The state's fiscal crisis has forced $40 billion in budget cuts over the past two years and still left a deficit of $25 billion. The problem is not limited to tough economic times. California has suffered from a revenue problem for decades, resulting in a continued deterioration in the quality of life here. Read More.

October 14, 2010
Phil Ting is the bravest politician in California. Or maybe just the craziest.

San Francisco’s tax assessor, the 41-year-old Ting spearheads a low-profile but high-import political crusade to dramatically change Proposition 13, the 1978 landmark initiative strictly limiting property taxes in the state. Since its passage, it has been termed “the third rail of politics,” a clear and present danger to the career of politicians who mess with it. Read More...

September 16, 2010
Temp
Welcome to CTL web 2.0! In the spirit of moving this campaign forward we're taking things up a notch. More resources, information and tools to get you more involved and to empower you to take the next steps to help grow our coalition.
 
Have suggestions? Feel free to contact us at info@closetheloophole.com. ClosetheLoophole.com is quickly becoming the hub for Prop 13 reform. We can't do this with out working together and fighting to change something that's been crippling our state for over 30 years. Learn more, take action and spread the word.
 
While you're checking things out, be sure to sign-up for the new CTL newsletter: "In the Loop!" It’s our new effort to keep our community of supporters informed about upcoming events and involved in closing the corporate loophole.
August 28, 2010

Close the Loophole now has over 6,000 fans on Facebook! Have you liked our page? Click here to join the growing coalition of Facebook users supporting Prop 13 reform: http://www.facebook.com/closetheloophole Help us grow our support! Will you ask 10 or 20 friends to join us on Facebook?

August 4, 2010

CTLwalkcardRead this article from Truthout.org about the efforts to reform property tax loopholes for corporations.

Before Proposition 13, cities raised money for infrastructure, schools, social programs and basic services by raising property taxes. Proposition 13 ended that immediately. When will Californians fight to reform Proposition 13?

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