Monday, November 2, 2015

Former Berkeley Chancellor Favors Split Roll

Splitting the roll
Note: There are various versions of "split roll" under Prop 13 of 1978. Prop 13 essentially limits property taxes to 1% of the sales price plus 2% per year, even if the property value rises faster. (There are exceptions and provisos.) It resulted from the "taxpayer revolt" in the late 1970s when property tax bills were rising due to an inflation of property values. At the time, as in most jurisdictions, property was periodically reassessed as market prices rose and the local tax rate was applied to current values. Although the initiative reflected primarily homeowner discontent, its coverage included both residential and commercial properties. Proponents of a split roll propose retaining Prop 13 for residential properties but applying some other system for commercial. (There are various versions of what that other system might be.) Part of the argument is that commercial property may not legally change hands, and thus be reassessed at market value, when the legal entity owning the property changes hands. Prop 13 could only be changed by another ballot proposition, either one put on the ballot by the legislature (unlikely) or by an initiative petition.

Op ed in LA Times:
This year's very public showdown between Gov. Jerry Brown and University of California President Janet Napolitano over raising UC's tuition ended in a compromise that in no way addressed the real issue: Where will the money come from to keep the state's world-class public colleges and universities competitive in the long term? As Napolitano and Brown squabbled over how much the state could afford to pay into UC's coffers, they expressly avoided the real solution to public education's money worries: Reform the commercial side of Proposition 13 so the state can raise more revenue. California could raise $9 billion a year for education and public services if commercial property taxes were reassessed regularly. And note: Such a reform would not affect Proposition 13's protections for homeowners...

Robert J. Birgeneau, a physics professor at UC Berkeley, was chancellor of that campus for nine years.

Full story at 

Gov. Brown - who was governor in 1978 when Prop 13 passed and flipped from being against it to being an enthusiastic supporter after it passed - has shown no interest (quite the opposite) in touching Prop 13 in his current iteration as governor. Back when Prop 13 passed, he was initially able to use a large state reserve in the general fun to bail out local governments. But the bailout's cost plus a recession created a state budget crisis toward the end of his first iteration and Brown was defeated in a run for the U.S. Senate in 1982.

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