BAKERSFIELD, CA -- Democratic state lawmakers want to change how property taxes are collected via, a decades-old law.
Commercial property owners say any change to Proposition 13 would lead to punishing tax increases that could cause businesses to flee the state.
But, proponents argue it would actually improve the state's bottom line.
For 34 years, the state's property tax law has been hands-off.
But, with a super majority in both houses of the state legislature, Democrats are emboldened and think it's time for a change.
County Assessor Jim Fitch agrees. "As the property goes up in value, you have the ability to generate more income, maybe you pay a little more in taxes," he said.
Right now, Prop. 13 caps property tax increases to two percent every year unless the property is sold. And, the property tax is only reassessed in a sale if more than 50 percent of the property changes hands.
Critics contend that's a loophole that allows corporations to rob the state of billions of dollars in tax revenue. And, they argue, commercial property owners reap huge financial benefits for the land, but pay very limited taxes for that benefit.
"The residential owner has to go out and work another job to pay the property taxes. The house doesn't pay his property taxes, where a commercial or industrial property generates income and pays for the expenses and pays for the property taxes," said Fitch.
A group of Democratic legislators plans to introduce several bills this year that could force commercial property owners to pay higher rates.
Under the so-called Split Roll proposal, commercial properties would be reassessed at least each year, while property tax increases on homes would still be capped at two percent a year.
The assessor estimates it could generate an additional $10 billion in tax revenue on Kern County oil and gas land alone.
"Legislators in California, money is like drugs. The more you give them, the more they want to spend."
Mike Turnipseed says the Kern Taxpayers Association categorically opposes a split roll.
"If you think California's business climate is just so wonderful that we can put more taxes on business and force businesses to relocate, then it's a good idea," said Turnipseed.
Greg D. Bynum and Associates manages 25 commercial properties in Bakersfield.
Don Bynum argues any property tax increase would be passed along to businesses that lease space. "It will trickle down to consumer prices. It would have an enormous impact statewide," he said.
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