The fair assessmetn_plan_spring_2006_cory_cook_ca_pol

WWW.AMENDPROP13.COM We are a grassroots organization which represents We are a grassroots organization which represents a variety of united special interest groups dedicated a variety of united special interest groups dedicated to Amending Proposition 13 OF 1978 through the to Amending Proposition 13 OF 1978 through the Fair Property Assessment Plan. We also support Phil Fair Property Assessment Plan. We also support Phil Ting, and all other efforts to amend proposition 13.Ting, and all other efforts to amend proposition 13.

Omar VenturaDaniel VillanuevaPresentSpring 2006:

California Politics -SFSU

The Fair Property Assessment Plan

Presentation Outline Brief summary of the Genesis of proposition

13. The role of Howard Jarvis in passing proposition

13. The Aftermath of proposition 13. Recent efforts to revise proposition 13.

Our Plan: steps to get it implemented. Our supporters. Lessons learned.

The Genesis of Prop 13The Genesis of Prop 13 In Serrano v. Priest, In Serrano v. Priest, the California state supreme court declared California's the California state supreme court declared California's

property-tax-based school finance system unconstitutional and a violation of property-tax-based school finance system unconstitutional and a violation of equal protection principals. The court ordered the state legislature to change equal protection principals. The court ordered the state legislature to change the way that California schools were financed. The legislature came up with the way that California schools were financed. The legislature came up with bill (AB 65) designed to equalize school revenues by increasing state funds bill (AB 65) designed to equalize school revenues by increasing state funds for poor communities while putting a cap on per-pupil revenues in wealthy for poor communities while putting a cap on per-pupil revenues in wealthy districts and redistributing some of their local property taxes to poor districts and redistributing some of their local property taxes to poor districts. districts.

Many Tax paying Voters did not agree with the courts ruling. Many argued: Many Tax paying Voters did not agree with the courts ruling. Many argued: why increase property taxes if the money is not going to their schools? This why increase property taxes if the money is not going to their schools? This made voters decline to vote for tax increases, because they were convinced made voters decline to vote for tax increases, because they were convinced government officials would not spend the money properly. government officials would not spend the money properly.

Also, After the Assessors' scandal of 1966, which revealed disproportionate Also, After the Assessors' scandal of 1966, which revealed disproportionate assessments, the Ca Legislature enacted reform bill (AB 80) to keep assessments, the Ca Legislature enacted reform bill (AB 80) to keep assessments at a uniform percentage of market value. As a result, during the assessments at a uniform percentage of market value. As a result, during the 1970s, when real estate values escalated rapidly, so did home assessments, 1970s, when real estate values escalated rapidly, so did home assessments, resulting in large increases in assessed value for many taxpayers. By 1978, resulting in large increases in assessed value for many taxpayers. By 1978, with home ownership threatened by escalating property tax bills, proposition with home ownership threatened by escalating property tax bills, proposition 13 began to sound more enticing to tax payers.13 began to sound more enticing to tax payers.

Increasing property values concerned voters who were on fixed incomes, Increasing property values concerned voters who were on fixed incomes, they feared that they would not be able to pay the property taxes on their they feared that they would not be able to pay the property taxes on their homes. homes.

The tax revolt was born.The tax revolt was born.

Howard Jarvis Howard Jarvis

In 1978, Howard Jarvis was a 75-year old owner of a In 1978, Howard Jarvis was a 75-year old owner of a small newspaper company turned manufacturing, rallying small newspaper company turned manufacturing, rallying a tax revolt in California with his reputation as a seasoned a tax revolt in California with his reputation as a seasoned battler against higher taxes. battler against higher taxes.

Jarvis pushed his initiative for a property-tax reduction Jarvis pushed his initiative for a property-tax reduction four times, and failed. To gain more signatures each time, four times, and failed. To gain more signatures each time, Jarvis endorsed both of Regan’s campaign’s for Jarvis endorsed both of Regan’s campaign’s for Governor, and campaigned for Regan’s proposition 1 as Governor, and campaigned for Regan’s proposition 1 as well.well.

Property values in 1978 were increasing from 50-100% in Property values in 1978 were increasing from 50-100% in one year alone, this also gave Jarvis plenty of signatures one year alone, this also gave Jarvis plenty of signatures and supporters for his initiative.and supporters for his initiative.

Jarvis witnessed an Elderly woman die of a heart attack Jarvis witnessed an Elderly woman die of a heart attack because she discovered that she might not be able to pay because she discovered that she might not be able to pay her property taxes. This gave Jarvis the perfect public her property taxes. This gave Jarvis the perfect public image, as he said in the wake of the woman’s death: image, as he said in the wake of the woman’s death: “Death and taxes may be inevitable, but being taxed to “Death and taxes may be inevitable, but being taxed to death is not inevitable!”death is not inevitable!”

Howard Jarvis died in 1986.Howard Jarvis died in 1986.

The Aftermath of Prop 13: Proposition 13 resulted in a dramatic reduction in the amount of

local property tax revenue available for cities, counties, and schools.

In addition, Proposition 13 changed the governance structure of California's education system by centralizing decision making from a local system of local schools, to a state system (James Guthrie, First to Worst).

Because proposition 13 applied to all properties, properties that were very high in property value, properties exclusively controlled by corporations, benefited significantly over the years.

Properties of equal size and worth, but purchased at different times, would be taxed differently, placing the tax burden on new families and business’s.

Vague wording in the section regarding how the school money was spent resulted in a overall non-compliance of that section of the proposition.

Why We Need Change:

Our Mission: To address California’s failing infrastructure and educational system, as well as reduce California’s $8.5 billion debt.

The status quo does not provide solutions to these problems, which holds California back from its full potential.

Continuing with the status quo will keep California on the path towards “Mississippification”.

California’s lack of revenue prevents California from investing in improving itself, and instead, leads to budget cuts and bonds that will cost California more money in the long run.

Other Efforts to Revise Proposition 13

• At least three studies have recommended a split roll. The California Policy Seminar (CPS) study, published in 1993, recommended a split roll. The Senate Resolution 42 Study Commission and the California Tax Reform Association also recommended a split roll in 1991. A 1985 preliminary report from Governor George Deukmejian's Tax Reform Advisory Commission referenced the split-roll approach, but did not incorporate it into the commission's final report.

• In 1988, proposition 98 was passed in hopes to ensure school funding was provided for k-12 education. However, this only prevented school spending from increasing.

• In 2000, proposition 39 was passed, to make it easier for schools to pass bonds for improvements.

• In 1992, Lenny Goldberg wrote proposition 167, a split roll initiative intending to generate a few billion dollars, which was rejected by a 2 to 1 vote.

• Other split roll initiatives have been proposed, but have failed.

The Fair Property Assessment Plan In short, the Fair Property Assessment Plan defines “commercial”,

“residential”, “residential-rental”, and “undeveloped” property, taxing and assessing each group differently.

“Commercial” property is to be assessed at “full cash value” There is no change to how “residential” properties are taxed or

assessed. “Residential-rental” properties are assessed as commercial

properties, since they generate revenue for the property owner, but are taxed as “residential” properties.

“Undeveloped” land is to be exempt from taxation, to promote the usage of land that is already developed.

Some of the Revenue goes to the general fund, while the rest is placed in special funds for infrastructure, higher education, hiring assessors, and funding potential sanctions.

Implementation With the aid our lawyers, an initiative can be fleshed out and

circulated for signatures. With enough signatures, an initiative can be placed on the ballot for passage as an amendment.

After reading Stealing the Initiative, we learned that the effectiveness of a proposition depends heavily on the language, as well as the likely hood of sanctioning.

By placing clauses within the amendment which clearly defines compliance, as well as a special fund for sanctioning, we hope to deter political actors from refusing to comply with the amendment.

By creating special funds, and mandating yearly audits of the funds, we ensure that revenue is spent properly.

2% or the revenue generated by this amendment is to be allocated to higher assessors, 38.95% goes to improving education, 39% goes to infrastructure, 20% goes to the general fund, and .05% is set aside to sanction non-compliance.

What This Amendment What This Amendment Intends to Resolve:Intends to Resolve: California’s budget deficit.California’s budget deficit. California’s under funded higher California’s under funded higher

education.education. The tax burden on newer home The tax burden on newer home

and business owners. and business owners. Fill the widening wage gap with Fill the widening wage gap with

middle class jobs. middle class jobs. Improve California’s Improve California’s

infrastructure.infrastructure.

How This Amendment Does How This Amendment Does It:It:• This amendment creates middle class jobs with state funded This amendment creates middle class jobs with state funded

infrastructure improvements, such as engineering jobs, infrastructure improvements, such as engineering jobs, construction jobs, and transportation jobs. The demand for construction jobs, and transportation jobs. The demand for assessors would increase, and provide jobs for existing assessors would increase, and provide jobs for existing California residents as well.California residents as well.

• Split-roll initiatives proposed so far are estimated to generate Split-roll initiatives proposed so far are estimated to generate $5 billion, and only propose yearly assessments. The fair $5 billion, and only propose yearly assessments. The fair property assessment plan not only includes yearly property assessment plan not only includes yearly assessments, it taxes commercial properties at their “real cash assessments, it taxes commercial properties at their “real cash value”, which would generate even more revenue for the value”, which would generate even more revenue for the state.state.

• In the long run, this amendment would dedicate 20% of In the long run, this amendment would dedicate 20% of property tax generated to help reduce the $8.5 billion budget property tax generated to help reduce the $8.5 billion budget deficit.deficit.

• Despite having to pay more in taxes, companies will benefit by Despite having to pay more in taxes, companies will benefit by having an improved infrastructure and educated workforce.having an improved infrastructure and educated workforce.

• Lower rents for “rental-residential” properties helps families in Lower rents for “rental-residential” properties helps families in California make ends meet.California make ends meet.

Our OppositionOur Opposition Larry McCarthy. (Taxpayers Larry McCarthy. (Taxpayers

association).association). L.A. County assessor (only because L.A. County assessor (only because

current amendments do not include current amendments do not include compliance mechanisms).compliance mechanisms).

The Governator.The Governator. Valley industry & Commerce Valley industry & Commerce

association.association. Majority of Republicans.Majority of Republicans.

Reasons For OppositionReasons For Opposition

Some groups fear that counties will be Some groups fear that counties will be overwhelmed with annual re-assessments.overwhelmed with annual re-assessments.

Some groups believe that the changes Some groups believe that the changes would not generate sufficient revenue.would not generate sufficient revenue.

Some groups argue that an increase in Some groups argue that an increase in commercial taxes will hurt California’s commercial taxes will hurt California’s economy, as well as raise prices for economy, as well as raise prices for consumers. consumers.

Our Supporters

• Wayne Ordos and Local Law enforcement (Tax Fairness Act of 2005).

• Robin Johansen and the California Teachers Association.• Lenny Goldberg, Executive Director of the California Tax

Reform Association (CTRA) and President of Lenny Goldberg and Associates, a public interest economic and political consulting and lobbying firm based in Sacramento .

• Remco, Johansen & Purcell Law Firm.• California Correctional Police Officers Association• California school administrators.• Former president of San Jose firefighters union.

Lessons Learned Lessons Learned While it is difficult to pass this amendment, persistence While it is difficult to pass this amendment, persistence

and political climate can create the right conditions for and political climate can create the right conditions for an amendment to pass, such as proposition 13, which an amendment to pass, such as proposition 13, which was rejected four times, and took Jarvis years of was rejected four times, and took Jarvis years of signature gathering.signature gathering.

Poor wording can impact the effectiveness of an Poor wording can impact the effectiveness of an amendment severely.amendment severely.

Smart, aggressive, and dirty tactics, such as Jarvis’ ruse Smart, aggressive, and dirty tactics, such as Jarvis’ ruse that proposition 13 was to protect Senior citizens, as well that proposition 13 was to protect Senior citizens, as well as passing proposition 62 to ensure that proposition 13 as passing proposition 62 to ensure that proposition 13 would never be repealed, are effective methods in would never be repealed, are effective methods in passing an initiative.passing an initiative.

Contrary to popular belief, there are many supporters for Contrary to popular belief, there are many supporters for the split roll. the split roll.