California Proposition 13 and Proposition 58
Everyone would like life to be forever smooth sailing… Especially in California, where the sun is typically shining most of the time, with most Californians looking to be positive and to have something to smile about every day. However… life is not always smooth sailing, and even if the sun is shining – and California residents once again have something to worry about… sort of. The latest political move against Proposition 13, the mega-popular tax shelter that makes avoiding property tax reassessment in CA legal for home owners and businesses, and prevents taxation over 2% of property value – is called the “split-roll property tax initiative”, and will, if passed, remove this property tax relief from business properties.
Most likely, if the “split-roll tax” succeeds, Proposition 58 and Proposition 193 will also be under fire – i.e., threatening a popular initiative that insures home owners’ ability to keep parents property taxes upon property tax transfer, affecting parent to child transfer of a home and/or land; when inheriting property, and inheriting property taxes. It would also dilute or destroy home owners’ much cherished ability to get access to fast funds through loans to trusts, from a reliable trust lender.
This so-called “Split-Roll Measure” would, if it passes into law, destroy most Proposition 13’s tax shelter protections, such as avoiding property tax reassessment in CA, for commercial properties and industrial facilities across the state… and would raise theses business property taxes by billions annually.
Businesses would be more or less forced, by economic necessity, to pass on these increased costs to California residents. This business and industrial property tax hike would affect all of us in California. It would unfortunately increase prices incrementally on all the items we purchase day to day – i.e., gas, office supplies, groceries, alcohol, monthly utilities, and healthcare costs.
Regrettably, these anti-Proposition 13 special interest groups are so razor-focused on eliminating Proposition 13, that they will even maintain a very badly written amateurish tax measure on the ballot as backup; in the event they fail to pass their new primary tax initiative. It’s pretty clear that all these tunnel-vision opponents to Prop 13 pushing this so-called split-roll tax measure aren’t one little bit worried about what will help regular Californians! They are apparently fixed on raising property taxes no matter what – beginning with commercial and industrial property taxes increases… flawed measures and all. And from that point, we can only make an educated guess at what their next moves will be… with respect to residential property tax hikes.
And so a new, this time different, anxiety has begun to emerge and grow… affecting large numbers of residential and business property owners, as well as renters, in the great state of California. Home owners, business property owners, industrial facilities, and even renters – are frightened, and not unreasonably so, that once this door has been opened, so to speak… to remove Proposition 13 tax relief protection from commercial and business properties – home owners are very likely next. And it wouldn’t be unreasonable or unrealistic to assume this would happen right away, if this measure passes.
Many movers and shakers in California believe this would be a likely scenario, if split-roll passes… with California property tax payers sliding down the proverbial “slippery slope” back to the bad old days before avoiding property tax reassessment in CA was possible, for a home owner or a business; before Proposition 13 property tax transfer tax relief allowed home owners to keep parents property taxes and actually transfer parents’ property taxes over to themselves, thereby avoiding property tax reassessment associated with inheriting property taxes.
Californians who are frightened of this slipper slope scenario are typically going on the assumption that once you open the door to a counter-effort, to weaken Proposition 13 protections for businesses… how are regular middle class California residents going to stop the new anti-Proposition 13 juggernaut from continuing on in the same direction, until the ability to avoid property tax reassessment has been watered down, and watered down… until you’re right back where you started.
Hence, the vocal and very motivated effort all across California to stop new measures like this, designed to destroy Proposition 13. And it looks like this type of battle will continue to be waged in this state until theses rabid, obsessive opponents to Proposition 13, and Proposition 58 and 193 either “see the light” on this issue – or are stamped out once and for all, with iron clad long-term statutes that lock down these property tax protections, and other protections for Californians as well within the Prop 13 initiative… that stretches 50 years out into the future. With no loopholes these opponents can grab onto, to water anything down.
If this new split-roll measure is defeated, Proposition 13 will need to be re-established as rock solid and rock steady, for the next 50 years, before these rabid critics will simple throw up their hands and “give up the ghost”.