Prop 13 Agreement May Fall Apart After All

Prop 13 Agreement May Fall Apart After All

A compromise bill that ostensibly would have pacified two California lobbyists who have been antagonists for years over property tax policy fell apart on Wednesday, the Sacramento Bee reports. 

Lenny Goldberg, who represents the California Tax Reform Association, yanked his support for the bill after a hearing on Wednesday, which had already passed in the state Assembly, claiming in a letter to Assemblyman Tom Ammiano, D-San Francisco, the bill’s author, that the bill “does not provide real reform” and would permit business owners to avoid having their properties reassessed using “slightly more sophisticated steps.”

Assembly Bill 2372 states that property can be revalued for taxation when 90% of it has a change in ownership in a three-year period. This is a compromise from the law resulting from Proposition 13, in which the only time business property is reassessed occurs when it changes ownership in one transaction. 

Goldberg backtracked after the hearing:

We supported it as a means of opening up the discussion, which we have always sought, but not as meaningful reform. Our concern is that, like many bills in the legislature, it projects the image of reform, allowing business to say, ‘we closed the loopholes,’ rather than the substance, since it in effect grandfathers in the thousands of properties which have changed ownership without reassessment.

In his letter to Ammiano, the Bee notes, Goldberg said that the bill should apply retroactively to transactions already made that qualified for the bill’s requirements for reassessment. Goldberg and Ammiano had been allied before Goldberg’s reversal, and it remains to be seen if they will ally again before the bill goes to the Senate Appropriations Committee and later to the the Senate floor.