California's iconic Prop. 13 could face major revision in 2013

Thirty-five years after California voters sparked a nationwide tax revolt by slashing property taxes at the ballot box, state leaders are said to be planning to overhaul the measure.

Proposition 13, which passed with nearly 65 percent of the vote in 1978, drastically cut property tax assessments for owners of homes and commercial properties, and placed new hurdles to limit future increases.

The initiative accomplished its designed purpose of protecting homeowners on fixed incomes from losing their homes due to soaring property taxes while California real estate values soared in the 1970s and '80s.

The tax revolt spawned by Prop. 13 is credited with spawning an anti-government movement that swept Ronald Reagan, a former California governor, to the presidency in 1980.

But the proposition's net effect in the decades that followed has been to shift the burden of state taxes from commercial to residential properties, because homes get sold and reassessed considerably more often.

Now, with a state budget seemingly perpetually in deficit, Democrats firmly in control of the legislature and voters displaying flexibility on tax increases, leaders are calling for changes.

"It is time for a fix, because Proposition 13 is broken," said Assemblyman Tom Ammiano, D-San Francisco, according to the Vallejo Times-Herald newspaper.

Ammiano plans to introduce a bill next year that would force businesses to pay higher property taxes, the newspaper said.

Other legislators also have proposed liberalizing Prop. 13's tax-hike restrictions, formerly a taboo subject in California politics.

Constitutional amendements pending in the legislature would lower Prop. 13's two-third vote requirement for tax increases to 55 percent for parcel taxes benefiting schools and libraries.

State senators Lois Wolk, D-Davis, whose district used to include Benicia, and Mark Leno, D-San Francisco, say they will propose a 55 percent threshhold for approving parcel taxes next year -- down from the Prop. 13-imposed 66.7 percent minimum.

Even a state party leader, California Senate President Pro Tem Darrell Steinberg (D-Sacramento), called the change a "sound idea," the newspaper said.

Politicians' willingness to be forthcoming about enabling tax increases reflects what appears to be changing public sentiment on the subject.

A recent poll by the Public Policy Institute of California found 58 percent of registered voters said they favored a "split roll" property tax, in which commercial properties would be reassessed at market value every year or two while tax increases on residential properties would continue to be capped at 2 percent.

Approval of all or many of these changes probably signals the end of the anti-tax movement that held sway in California for decades, the newspaper said.

"It really has symbolized an unwillingness to permit Sacramento to raise general taxes," Max Neiman of UC Berkeley's Institute of Governmental Studies told the newspaper.

But Neiman said California voter approval of a statewide tax increase promoted by Gov. Jerry Brown in November probably indicates acceptance of increased taxes in general, particulary if such increases are borne primarily by the wealthy.