County Assessors Are Wary of Proposed Prop. 13 Overhaul

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County Assessors Are Wary of Proposed Prop. 13 Overhaul

Thousands of property appraisers who work for county assessors across the state are about to retire. That has assessors worried because a statewide ballot initiative is offering to change the way certain properties are valued in California.

Homes overlook San Elijo Lagoon / Photo by Jamie Scott Lytle

This post originally appeared in the Sept. 20 Sacramento Report. Get the Sacramento Report delivered to your inbox.

The California Board of Equalization met in San Diego this week to gather feedback from officials on the best ways to recruit and retain property appraisers who work for county assessors across the state. About 70 percent of those appraisers, according to state data, are over the age of 50.

That means thousands of appraisers — who play a key role in the collection of property taxes that fund schools and cities — are about to retire.

This large turnover in staff has county assessors worried because a statewide ballot initiative is offering to change the way certain properties are valued in California. A coalition of unions, advocates and Democratic politicians want to amend the state Constitution so that commercial and industrial properties are taxed based on their market value, rather than their purchase price.

Approved in 1978 by voters, Proposition 13 set limits on the annual increases of a property’s assessed value. It was designed to protect families from sharp tax increases on the death of a loved one. But as the Los Angeles Times reported last year, Prop. 13 has also proven highly profitable to an elite group of people who use second homes as investments, providing windfalls for longtime homeowner families while exacerbating generational inequities.

Prop. 13 has also meant fewer resources for schools and local governments — an estimated $528 billion over the last 40 years.

Under the new initiative, which has qualified for the 2020 ballot, commercial and industrial properties would effectively be removed from Prop. 13, providing schools and cities with new resources. Polls suggest that a slight majority of Californians are in favor.

But the county assessors at Thursday’s Board of Equalization hearing were skeptical.

Santa Clara County Assessor Lawrence Stone said the initiative would be impossible to implement on the timeline its proponents have offered, because it would cause assessment appeals — and the costs to review those appeals — to skyrocket. By his account, it takes five years to fully train a commercial and industrial property appraiser.

Stone also complained that while the initiative is offering to give small businesses a break, assessors are not equipped to verify how many people work for a business. Some might lie in order to keep their tax rate low, he suggested.

Supporters of the initiative acknowledge that the funding in increased taxes wouldn’t begin to flow and offset the cost of all those new assessment appeals until 2023, but argue that the Legislature could ramp up its reimbursements to counties sooner.

“No one wants to leave county assessors holding the bag,” said David Lagstein, the Service Employees’ International Union political director.

Others portrayed the initiative in a moral light, arguing that the new revenue could be used on homeless services and affordable housing.

“This is a funding stream that will allow cities to rebuild, to refurbish, to reform, and this is a fight for the future of California,” said Christopher Rice-Wilson, associate director of Alliance San Diego. “We’ve been starving our governments, we’ve been starving our communities for 40 years, and it’s time to stop.”

Board of Equalization members were expected to listen to the initiative’s supporters and opponents and ask questions, but at least one of them made clear he’s already made up his mind: Mike Schaefer, a Democrat who represents San Diego, Orange and Riverside counties and parts of San Bernardino.

Schaefer said the initiative was vaguely written and a bad idea because it would put certain tax policy decisions best left to the Legislature in the hands of county assessors.

“They’re creating a monster,” he said, referring to the initiative’s supporters.

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