Willie Brown is so full of shit on Prop. 13

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Ammiano: "He doesn't understand the history of this bill."

The Chron's conflict-laden columnist made an interesting admission Dec. 9: The multibillion-dollar tax loophole that allows corporations to avoid reassessments under Prop. 13 was all his fault:

 After voters approved Prop. 13 in 1978, capping property taxes for landowners, we had to sit down in the Legislature and figure out how to implement it. One of the biggest questions was how and when properties could be reassessed. We decided that should happen whenever a property was "transferred." When you sold your home, it was transferred to someone else. The home was reassessed, and the taxes for the buyer were increased accordingly. What we did not realize was that corporations don't actually transfer property - they transfer the stock in the company that owns the property. And Prop. 13 didn't apply to stock.

Wait: In 1978, Brown (a lawyer) and the office of the Legislative Counsel and the rest of the lawyer-heavy Legislature didn't know how corporations transfer property? It was all a big mistake? There were no corporate lobbyists in Sacramento trying to make sure that the loophole was created? Just the poor undereducated elected officials who got snookered by their own lack of information?

And remember: That was 1978. Brown was elected Speaker of the Assembly in 1980, and served for 14 years. Somewhere during that era, someone must have noticed what was going on (every county assessor in California did). There was ample opportunity to close that loophole, if the immensely powerful Speaker Brown had any desire to do so.

But somehow, it never happened. Funny thing, that.

So now Brown agrees that this problem should be fixed -- but he says the person carrying the bill, Assemblymember Tom Ammiano, shouldn't be doing the work because he's too liberal and pro-tax. Which is either stupidity (and Brown's many things, but normally stupid isn't one of them) or he's still bitter that Ammiano forced him into a mayoral runoff in 1999 and lead the rebellion that ousted all of the mayor's loyal supervisors a year later. Vindictive? Yeah, we've heard that about Willie Brown.

"He doesn't even understand the history of the bill," Ammiano told me. "I introduced it last year and got it out of committee and to the floor, which was a miracle." And now, with a two-thirds majority in both houses, the Democrats can approve it without the Republican minority veto.

"I have cosponsors and I'm going to get more," Ammiano said. "We may be able to make it part of the budget process."

And since local governments all over the state, and anyone who believes in tax fairness, is going to support this, I think it's got a pretty good chance of getting to the desk of the governor.

Willie Brown, as is his practice, didn't return my call seeking comment.

 

Comments

Willie Brown didn't return your call seeking comment on an article you were writing with a headline of "Willie Brown is so full of shit...."

That's a shocker.

Posted by The Commish on Dec. 10, 2012 @ 2:22 pm

that nobody that Tim is criticizing is ever answering Tim's calls.

And then Tim only needs to mention it if they do actually call back.

Posted by Guest on Dec. 10, 2012 @ 2:39 pm

Yeah I remember when he was indignant when Christina Olague not returning his calls when the BG was skewering her during the Mirkarimi affair (pre-vote).

Posted by Guest on Dec. 10, 2012 @ 3:42 pm

to carry the water on this one. The need is for someone who can empathetically relate to a "blue dog" democrat in the remoter counties of CA, and a gay, urban, ultra-liberal probably isn't going to get anything other than rolled eyes, winks and knowing looks.

I'd agree with your point that it's barely credible that Brown didn't know how properties transfer when they are owned corporately. A better argument might simply have been that it wasn't a big problem back then but, once P13 arrived, then companies were created purely for the purpose of owning a property.

That way, you don't sell the property, you sell the company. I suspect the voters are ready to fix the worst excesses of that, and even Brown concedes that, so where's the real problem here Tim? Or have you still not gotten over Willie's election wins from forever ago? It's not like progressives have done any better since then, now is it?

Posted by Guest on Dec. 10, 2012 @ 2:26 pm

I hope Tom Ammiano takes his prop 13 bill and and aggressively shoves it up their corporate coddling a$$es.

Posted by Guest on Dec. 10, 2012 @ 3:11 pm

The only problem with it was that it took so long to read it.

Posted by Guest on Dec. 10, 2012 @ 3:21 pm

the situation. As usual he's engaging in mirror imaging - seeing what he wants to see in the state's body politic and what that consists of is a burning desire do dump Prop 13 and return to the stratospheric tax levels of the 1970s. That's a totally incorrect reading and everyone should remember that Tim doesn't give a shit about the Democratic party's successes or failures at the statewide level other than how far it allows him to push his agenda. Ammiano's goal is the total repeal of Prop 13 - pushing that will bring the end to the Democratic supermajority in the legislature as well as risking statewide officeholders. Prop 13 repeal is political poison. Tinkering around the edges is acceptable but remember - Tim has long been a fan of the idea that all of this state's problem stem from Prop 13 and he's licking his chops now at any chance he sees to get rid of it.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 3:58 pm

1. The Democratic super-majority abolishes Proposition 13.

2. Property taxes double or triple for millions of Californians.

3. ....

4. Profit! Er - Complete Political Victory For Democrats!

Posted by Demented, Yet Terribly, Terribly, Persistent on Dec. 10, 2012 @ 4:20 pm

All they can do is submit a repeal to voters - they cannot abolish it. And they're not unified on the issue anyway. The majority of Dems are from areas with super high property values who would never vote to double or triple people's property taxes. One thing most politicians are not is suicidal. Ammiano is term-limited - he doesn't speak for the caucus as a whole.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 4:37 pm

Lucretia, I think a lot of those Dem voters would be OK with increasing commercial rates, which is what this is about.

Posted by Hortencia on Dec. 10, 2012 @ 5:06 pm
Posted by Guest on Dec. 10, 2012 @ 5:18 pm

At least in the populated parts of Nevada like Clark County.

I doubt Disney is gonna pull up stakes and move to Las Vegas because their 1978 property tax appraisal is disallowed.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 5:41 pm

in the toilet, the issue is moot.

Likewise, Texas has 3% prop taxes but it's hardly an issue when the average house there is worth 50K.

Disney could easily operate from somewhere outside of Las Vegas. I wouldn't borrow to fund public sector pension liabilities based on the premise that Disney won't quit CA.

Posted by Guest on Dec. 10, 2012 @ 6:23 pm

What a joke - neither is any other CA company. Companies are based here for a multitude of reasons - none of which are easily replicable outside of, for example - Silicon Valley or Hollywood.

You can't replicate the research universities of California like UCSF, Stanford, UCLA or Berkeley or the culture that goes along with them in a place like Birmingham, AL or Elko, NV. If you could those places would already be ahead of the Bay Area or Los Angeles - and they're not.

Any company hit by a change in Prop 13's assessment rules will simply pass the cost along to consumers - which is what they always do.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 7:02 pm

are abused, they most certainly would relocate.

That said, I do agree that taxes would simply be passed onto the consumer, and so would be inflationary.

Posted by Guest on Dec. 10, 2012 @ 8:57 pm

The whole point is that corporations are avoiding the reassessment required under Prop 13 by transferring their properties, not selling them. Residential property owners do not have that right meaning they're bearing more and more of the burden. That is wrong - there is absolutely no way to justify that. Some companies are going to have a very hard time explaining why their 1978 assessments still apply on properties which have been "sold" 10-15 times since then. Residential property owners do not need to subsidize commercial property owners. Period.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 9:07 pm

Tim wants to repeal Prop 13 entirely. His agenda on this issue has always been clear. He longs for a return to the stratospheric property tax increases of the 1970s.

Posted by Lucretia Snapples on Dec. 10, 2012 @ 5:33 pm

They kept coming back to the trough and, in the end, the people rejected that in what was probably the most successful campaign against unjust taxes since the Boston Tea Party.

Redmond sounds like an English name to me. His heritage betrays him. Redcoat or turncoat? Hard to say.

Posted by Guest on Dec. 10, 2012 @ 6:25 pm

I think that's open to debate. Anyway, something does have to be done about the widely disparate property tax rate for homeowners, but let's leave that for another day. I'm glad we agree on the split roll.

Posted by Hortencia on Dec. 12, 2012 @ 8:47 am

doubled year-on-year. That's the whole reason we got Prop 13 in the first place!

Posted by Guest on Dec. 12, 2012 @ 9:01 am

That was when finance rose as a sector of the economy once finance was able to buy the legislatures and courts to loosen depression era restraints on their operations. Once finance began to suck down more and more of increased productivity, wages fell and the conservatives tried to make up the break in falling wages by instigating a tax revolt. Now we're left with the worst of all worlds, falling wages and a decrepit public sector and the right wingers are doubling down over and again on stupid.

Posted by marcos on Dec. 12, 2012 @ 9:12 am

I consider paying a penny more in taxes

Posted by Guest on Dec. 12, 2012 @ 10:14 am

before they raise your taxes (or more accurately, reinstate them to pre-Bush era rates) in the next few weeks. You sure are quick to throw people off the boat as the tide rises in your wealth creator fantasy world.

(This comment was more than one line.)

Posted by Eddie on Dec. 12, 2012 @ 10:27 am

Funny - I hadn't read that.

Posted by Guest on Dec. 12, 2012 @ 1:13 pm

The less actual political power Tim has, the more he resorts to obscenity.

"So now Brown agrees that this problem should be fixed -- but he says the person carrying the bill, Assemblymember Tom Ammiano, shouldn't be doing the work because he's too liberal and pro-tax. Which is either stupidity (and Brown's many things, but normally stupid isn't one of them) or he's still bitter..."

So are you denying that Ammiano is liberal and pro-tax?

Or is the argument that its not possible to be "too liberal and pro-tax"?

Posted by Demented, Yet Terribly, Terribly, Persistent on Dec. 10, 2012 @ 4:13 pm

Time for a wee rethink, maybe's?

Posted by Guest on Dec. 10, 2012 @ 4:59 pm

I agree with Tim. Willie Brown IS full of shit on this one. He didn't how corporations transfer property? No one in the legislature ever mentioned this while putting Prop 13 together? Willie must think us fools to make his lies so transparent.

But I'd lose the newsflash about Brown being vindictive. You'd have more of a scoop if you reported that America has just elected a black President. Plus, everyone in SF politics is vindictive. Even you, Tim.

Posted by Snoozers on Dec. 10, 2012 @ 11:07 pm

the formation of companies purely to shield property transfers from tax increases. And in fact even individual can and do do this - form a company, transfer your home to that company and then, when it sells the existing cost basis is grandfathered in.

Before Prop 13, companies would sell their properties normally. After Prop 13, it made perfect sense to sell the company instead.

So most people will say that the anomaly should be addressed, although it probably concerns some about the impact of this on companies, jobs and inflation.

Posted by Guest on Dec. 11, 2012 @ 7:50 am

I don't to see Prop 13 gotten rid of, in face would rather see its rewording, in 1978 how could any one know about property transfer via stock or other means. For many years the red hot button was Prop 13, no one dared to go near or let alone talk about its change. Forget even dumping it, just reworded it.

Also I love how people bring up Silicon Valley, those cities down there are pretty well run compared to San Francisco, they don't mind business coming in, they elect people that want to make sure it is all well run. Again nothing is perfect.

I know since 1978 the state has grown, we added people, jobs, visitors, students and older people. I remember the first Tech boom, the song Go West, the 2nd Tech boom, computer game boom, PC market boom, Internet boom, 1st Dot com boom and the boom we are in right now. Yet we haven't kept pace, costs have gone up, housing has gone, rents have gone up, gas has gone up, traffic has gone up.

We need to improve transit, infrastructure, and not just to pay or give people benefits.

Posted by Garrett on Dec. 11, 2012 @ 12:32 pm

property tax each year. Although that's true for existing properties, there are many ways that taxes can be riased beyond that:

Parcel taxes if voter approved
Ad valorem hikes if voter-approved
Any improvements made to the property
Sales
New build housing

So in practice, prop tax revenues have increased by an average of 7% pa since 1978 - well above inflation. The real problem is that spending has increased even faster than that, and that is what we need to fix even more urgently.

Posted by Guest on Dec. 11, 2012 @ 2:14 pm

Population growth and commensurate growth in demand have made California expensive. The three conspire to raise the cost of doing business, including government.

Tax increases have not been anywhere near 7% pa.

Property tax revenues increasing by 7% reflects high cost in new assessments as well as a growing population.

Posted by marcos on Dec. 11, 2012 @ 2:50 pm

I just put new siding on my house and the city used that as an opportunity to jack the assessment up $150,000. The estimation is that new siding caused the home's value to shoot up 15% in six months. When I called them and asked how they arrived at that figure they told me they were basically going to raise the assessment to the outer limits of what they consider the owner's ability to pay - I believe the exact quote was "we're going to raise the assessment the maximum we're allowed under Prop 13 regardless." So the city's assessment doesn't have any basis in reality at all. They kept raising assessments even during the economic crisis except one year when they declined less than one percent - when most homes in San Francisco were declining in value as much as 20-30%

Can you imagine what property taxes would be without the constraints of Prop 13? If Prop 13 is the only thing keeping the city from raising assessments as much as they want - what would happen if it were to disappear?

Posted by Lucretia Snapples on Dec. 11, 2012 @ 3:33 pm

Look, you made some statements that when thought through are perfectly plausible. California's growth has increased demand which has inflated prices and made everything including government cost more.

Unwilling to accept the occasional sour fruits of success, you all continue to bitch.

We need to be taxing economic rents of all sorts and land and pure economic speculation, unearned windfalls all, more so than property or labor.

You can always take your case to the Assessment Appeals Board.

Posted by marcos on Dec. 11, 2012 @ 6:38 pm

Or I could just rent the property out - which being that it's a single family home means it's immune from rent control. I think I'll do that instead - make sure only aspiring techies can afford it ;-)

Posted by Lucretia Snapples on Dec. 11, 2012 @ 7:02 pm

and not owners, since tenants consume city services while owners may not even live in SF and consume nothing. England changed it's system of property tax to make the occupier liable to pay it and not the owner. By spreadying the tax burden much wider like that, the tax rate can be made lower.

Posted by Guest on Dec. 12, 2012 @ 8:24 am

England also has socialized medicine, a parliamentary multiparty democracy and a nationwide functional train system, should we do all of that too because England does?

Posted by marcos on Dec. 12, 2012 @ 8:39 am

city services ensures both the tax rate is higher AND that revenues are less AND that 2/3 of voters have no incentive to vote down expensive spending ideas.

Posted by Guest on Dec. 12, 2012 @ 8:59 am

Landlords operate a business and they incorporate the costs of property taxes into rents, it is a damn lie that tenants don't pay property tax.

Posted by marcos on Dec. 12, 2012 @ 9:09 am

But landlords make money off owning the property they rent. As far as spreading the burden goes, property owners tend to be better off financially than renters, especially if the property isn't owned by an individual. Why should a poorer individual have to pay more tax than a richer property owner that may not even be an individual?

Posted by Hortencia on Dec. 12, 2012 @ 8:45 am

But the proeprty tax is the same either way. Are you suggesting abolishing property tax and replacing it with a "profit tax"?

Posted by Guest on Dec. 12, 2012 @ 8:58 am

Short memories, people. Prop 13 was a proposition approved by voters. Willie Brown had NOTHING to do with it. After the Proposition passed, Corporations had their attorneys review the language, and found a loophole. That's Willie's fault? Get Real. Earlier attempts to revise would have been a political suicide, because Prop 13 was, and for the most part still is extremely popular with voters. Personnally, I don't like most of what comic-turned-politician Ammiano proposes, but this is a good loophole to close.

Posted by Richmondman on Dec. 11, 2012 @ 2:34 pm

"And since local governments all over the state, and anyone who believes in tax fairness, is going to support this, I think it's got a pretty good chance of getting to the desk of the governor."

Local government?????

"Tax fairness" meaning SEIU leadership, non profit workers, etc...

Tim thinks the state is run by "local governments" and various parasites.

The actual citizens of the state are just too stupid to agree with progressives.

It's interesting how true believers think that their opinions are so revealed that everyone must agree.

Posted by matlock on Dec. 11, 2012 @ 8:41 pm

I have no seen one comment here about the devastation to the California School System brought about by Prop 13.

I guess the product of CA schools is busy on this site discussing Willie's politics, and corporate loopholes to see the forest through the trees.

Posted by Guest on Dec. 18, 2012 @ 9:57 pm