THE BLOG
04/15/2013 05:35 pm ET Updated Jun 15, 2013

Prop. 13: Now Is the Time

When people say it's not yet time to fix Proposition 13, it make me think now is the time.

People used to say it was the third rail of California politics, that hazardous line that followed us everywhere and was political suicide to touch.

Of course, that didn't stop me from talking about it. My San Francisco constituents have long recognized that some of the constraints that came along with Proposition 13 are holding our state back.

Oh, those crazy San Franciscans. They support oddball things like a living wage, health care for everyone and rent control.

Funny thing: Even though people say California drives businesses away with policies like that, San Francisco is still more economically vital than just about everybody else. The high-tech companies know they'll be able to get the highly educated young workers they want more easily in a city like that.

But back to Proposition 13.

This law was put in place to keep homeowners from being hurt by huge, unpredictable tax increase. I totally support that. The problem is that the rules created by the Legislature -- under the influence of powerful landowners -- created a bunch of inequities.

So, when people say now is not the time to fix that, it means they recognize it is no longer a third rail. People (outside San Francisco, too) have woken up to the inequities. Did you know that corporations used to pay most of the taxes in California? Now the burden is shouldered by homeowners and other individuals.

They say now is not the time, because powerful interests are still against reform, not because it isn't a good idea. I think there are ways in which we can start reforming Proposition 13 today, to meet today's needs.

My bill AB 188 is one idea. It would clarify how we define "change of ownership." When you buy a house, it is reassessed and taxed at the current market rate because there's an ownership change, right?

But corporations have been using sophisticated partnerships and other legal techniques to buy property without technically triggering an ownership change. So the new owners pay old, artificially low tax rates.

Just this week I was told about a Texas billionaire who wants to buy a big hotel in the Los Angeles area and structure it so he wouldn't have to pay taxes on his new property at market value. That's money that should go into local needs, not into a rich guy's pocket.

To fix that, I want to make clear that when 100 percent of the ownership changes -- no matter how it's structured -- it should be reassessed.

Opponents cry foul and claim that's a split roll - where commercial property is taxed more than residential. It's not.

I call it a "smart roll," because it's smart enough to sniff out the real changes. It brings in more money be assessing property at what it's worth, not by raising tax rates. This doesn't affect people who have held property for a long time, just new owners. That's the way it is with residential property.

Why is now the time? I see reasons all around me. Class sizes are going up, potholes are growing and crime is returning to areas where community policing has been cut due to shrinking city and county budgets.

Fairer taxes and more money in local government will mean schools will be able to help educate more kids, fix more roads and improve public safety. This reform won't give state government more money. It remains local property tax. It will help all Californians, close to home.