Senate Democrats unveiled a proposal Wednesday that would change Proposition 13 to raise taxes on commercial property owners. Here’s the catch: the bill requires two-thirds legislative support, meaning a handful of Republicans would need to back it.
The chance of GOP legislators approving a tax increase is “very remote,” said Sen. Bob Huff, the Republican Senate leader from Glendora.
“I’m pretty confident (Democrats) don’t get the two-thirds. They will have to do it though the initiative process,” Huff said.
The legislation, Senate Constitutional Amendement 5, would allow local governments to raise revenue by adjusting taxes on commercial and industrial properties following a reassessments of value, not just during an ownership change.
Democratic Senators Loni Hancock of Berkeley and Holly Mitchell of Los Angeles view the bill as an important means of raising as much as $9 billion a year for schools and local governments. They note that the share of property taxes coming from commercial properties has fallen in recent decades, due in part to businesses using financial mechanisms to shield property from new taxes following an ownership change.
If the bill dies, it may still go to voters. Organized labor could begin collecting signatures in the fall to qualify for the state ballot. Business groups have said they would vigorously fight that kind of change to Proposition 13.