Steyer has wrong fix for California’s Prop 13. Here’s a better way California’s fiscal challenges stem from Proposition 13, a 1978 law that caps property tax revenues by freezing valuations at 1970s levels and limiting annual growth to 2% (until sale or new construction). While billionaire gubernatorial candidate Tom Steyer has correctly identified Prop 13 as the root of the state’s funding crisis, his proposed solution—reviving a “split roll” property tax reform—fails to address the core inequities of the system. Instead, it shifts the tax burden onto commercial properties while leaving the outdated, regressive structure of Prop 13 intact. Prop 13’s artificial restrictions on property valuations have created a distorted tax landscape. New property owners often pay significantly higher taxes than long-time residents for identical homes, as valuations remain frozen at purchase dates. This system disproportionately benefits established homeowners while burdening younger families and new buyers. A 2016 Legislative Analyst’s Office report highlighted how these disparities penalize mobility, rewarding those who hold property for decades while shifting costs onto newcomers. The law’s impact extends beyond individual households. It distorts urban development by severing the link between public investments and land value capture. When cities spend public funds on infrastructure like transit lines or schools, surrounding land values rise. In a fair system, this appreciation would generate additional tax revenue to fund future projects. Under Prop 13, however, the untaxed windfall of skyrocketing land values is captured by private landowners, who then charge high rents on their tax-sheltered properties.#tom_steyer #prop_13 #legislative_analyst_office #washington_state #massachusetts
