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LA mayor urges 'big solution' for Calif. finances

By Judy Lin

Associated Press

Published: Tuesday, Aug. 16 2011 5:40 p.m. MDT

Proponents of the split tax roll say Proposition 13 has shifted the property tax burden from commercial property owners to homeowners. Lenny Goldberg, a lobbyist with the labor-backed California Tax Reform Association, said businesses, particularly those that invest in commercial real estate, are often able to evade property assessments when there's a change in ownership.

For example, Goldberg said the famous Beverly Hilton Hotel in Beverly Hills was not reassessed when it was bought out by the Blackstone Group, a private equity firm. The property's value is still assessed far less than neighboring properties.

"It's time to address the unfairness inherent in a system that allows Wall Street hedge fund managers to devise complex real estate investment trusts that give the super-rich a free pass on the taxes every ordinary homeowner in California has to pay," Villaraigosa said.

Pro-business groups like the California Taxpayers Association say small businesses wouldn't be able to absorb rent increases at commercial buildings, shopping centers and business parks if split roll were enacted.

Any major changes will be daunting.

Proposition 13 can only be changed by a two-thirds vote of the Legislature or through an initiative process approved by voters. In 2009, San Francisco County Assessor Recorder Phil Ting failed to obtain enough signatures for an initiative that would have placed the split roll question before voters.

The mayor also backed an effort to allow local school districts and local governments to raise taxes on a majority vote, rather than two-thirds. Coupal said the mayor's ideas are nothing more than a push by labor to increase taxes.

"Unless they've changed their tune, we believe the public employee unions just want more revenue and that's pretty clear in their agenda and that's contrary to what businesses and families want," Coupal said.

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