Home News Council Sends a Thumping ‘No’ Message to Overhaul of Prop. 13

Council Sends a Thumping ‘No’ Message to Overhaul of Prop. 13

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Even though two of the most influential big-city bodies in the state have signed onto an activist group’s proposal to remove Prop. 13 benefits for all California commercial properties, Culver City delivered a resounding “no” to the scheme last evening.

While Jeff Muir, the city’s Chief Financial Officer, evaluated the potential effect of subtracting all businesses from the 1978 tax reduction law, the City Council stood stoutly against any change.

By sheer inaction, the City Council declined a plea by the activist group Evolve to join the San Francisco Board of Supervisors and the Los Angeles City Council, among others, in a nearly four-year drive to drastically shrink 13.

Not only was there no vote, there was not even a motion. For a moment, it looked as if the shorthanded Council might grant a reprieve for the Evolve plan. Member Jim Clarke left last week on an international trip with the Sister Cities group. But when Mayor Meghan Sahli Wells, easily the most (or only) enthused member, suggested holding the matter over until Mr. Clarke’s return, she was met with silence.

When she rendered a speech in favor of subtracting commercial properties from the tax-controlling Prop. 13 plan, the response again was silence.

Effects of Prop. 13

In responding to a question of how Prop. 13 has affected Culver City and the impact of Evolve’s proposed overhaul, Mr. Muir gave “a very ball-park estimate, based on information I have available to me.

“There are about 416 commercial/industrial parcels that we don’t show a full valued sale being recorded on since 1978,” he said.

The CFO explained that “full valued” is defined as the property going from a seller to a buyer in its entirety, not a partial sale of a lesser interest. The assessed value of these parcels is $729,945,147.

“Since the base year of 1975-76, the cumulative Prop. 13 adjustments (assessor-applied inflation adjustments limited to 2 percent max) to a property covered by Prop. 13 is 200.01 percent. The cumulative actual statewide CPI over this time is 481.97 percent. The difference is 281.96 percent.

“If we applied that percentage (281.96 percent) to the value of these parcels, the estimated revised assessed value would be $2,058,153,336,” Mr. Muir said. “The incremental value (over the current assessed value), would therefore be $1,328,208,189. The property tax (1 percent) on that amount would be $13,282,081. In a non-redevelopment project area, the city gets 10.43 cents of each dollar. The School District gets 23.28 cents of each dollar.

“So if there were $13 million in additional property tax revenues, the city’s share would be about $1.4 million and the CCUSD share would be about $3.1 million.”

Mr.Muir again asserted that “this is a very high-level estimate. It ignores a lot of nuances.”