Sacramento Bee columnist Dan Walters today raised the question whether a split roll property tax increase will be considered to increase tax revenues. The split roll refers to the fact that all property is taxed the same under Proposition 13 (as it was before Proposition 13, by the way) but the roll could be split between business and residential property by putting different rules and thus a heavier tax burden on business property.
Walters points out that critics of Prop 13 have long claimed that business gets a break under Proposition 13. The theory goes business property changes hands less frequently than residential property, therefore is re-assessed less frequently and pays proportionately less.
Not so. Walters notes that a group called "Californians Against Higher Property Taxes" issued a report by former Legislative Analyst Bill Hamm and economist Jose Alberro that refutes that argument. I helped put together "Californians Against Higher Property Taxes" and the findings were quite revealing.
The authors of the study found that in measuring assessed value of property to its actual market value, business properties are being assessed for tax purposes at values that are closer to market values than is the case for owner-occupied residential property.
And, that’s not all. Here are some other concerns the study revealed if a split roll should became law.
- Higher rents paid by families, seniors and small businesses, with particular impact on minority-owned businesses
- A loss of 150,000 jobs
- Reduced wages
- Increased consumer prices
- Decline in the value of financial assets held by public retirement funds
- Increased development of open land (due to increased costs of "holding" land)
You can read the entire study here.
Walters, in his column, suggested that the tax commission proposed by Governor Arnold Schwarzenegger and Assembly Speaker Karen Bass might consider a split roll. I heard Speaker Bass say the split roll and Proposition13, itself, were off the table for her tax commission. But that was a number of months ago. We’ll see if that pledge still holds.