WASHINGTON - A pair of California state senators on Wednesday introduced a proposed amendment to the Golden State's constitution that would increase property tax revenues by increasing the assessed value of most businesses.
Sens. Loni Hancock, D-Berkeley and Holly Mitchell, D-Los Angeles, introduced the measure, SCA 5, in an effort to change the financial landscape dictated for the state by a 1978 amendment known as Proposition 13. Prop. 13 limits California's property tax collections by setting a base statewide property tax rate of 1% of a property's assessed value, and capping increases in assessed value to no more than 2% annually unless that property changes hands, at which point it is reassessed at the sale price.
Under SCA 5, commercial and industrial properties would be reassessed at their market value, after a phase-in period that a Mitchell spokesman said is still being developed with help from county assessors. Hancock and Mitchell said that the amendment would help shift the tax burden away from homeowners and onto commercial properties that have not recently been reassessed.
A union-led coalition called Make It Fair is leading a push to change Prop. 13 to raise rates on commercial property. That effort can reach the ballot by collecting more than 807,615 signatures; for lawmakers to put SCA 5 on the ballot would require a two-thirds majority in both chambers of the state legislature in order to get on the ballot, which is unlikely given that it would require Republican support and because many Democrats would also be leery of touching what many observers call the "third rail" of California politics.
The proposed amendment would maintain existing constitutional provisions limiting property tax rates, the two senators said in a release.
