Challenge to Prop. 13’s Constitutionality Fails

A lawsuit against the Los Angeles County assessor, challenging the constitutionality of Proposition 13’s method of property taxation, was dismissed Monday.

Los Angeles Superior Court Judge David A. Workman ruled that the state Supreme Court had already decided the issue in 1978, when it found that Proposition 13 does not discriminate against new property owners.

But Ann Carlson, attorney for Stephanie Nordlinger, a Baldwin Hills homeowner who filed the suit against Assessor John J. Lynch through the Center for Law in the Public Interest, said the ruling will be appealed to the 2nd District Court of Appeal in Los Angeles.

The state high court upheld an equal protection challenge to Proposition 13 just after it was enacted in 1978. But at that time, “extreme tax inequities had not yet developed,” Carlson said, explaining why she will appeal Workman’s ruling.

The lawyer also noted that a recent U.S. Supreme Court property tax decision left the door open for such a suit from California to be heard.

A new home buyer, Nordlinger contended that she is paying property taxes five times higher than her neighbors, who had purchased their homes, some much larger than hers, many years ago.

Proposition 13 set property taxes at 1% of assessed valuation and froze tax assessments for existing homeowners at 1975 levels. Once property is sold, it is reassessed and taxed on the basis of the new purchase price.

Nordlinger, herself an attorney, enlisted the help of the Center for Law in the Public Interest, which in turn commissioned a study of the inequities created throughout the county by Proposition 13.

The study by University of California economist David Gold found that new homeowners in neighborhoods throughout the county commonly pay 10 to 17 times the property taxes paid by their neighbors who have owned homes for many years. New owners of vacant lots in Los Angeles pay as much as 250 to 500 times the property taxes paid by longtime owners of comparable properties, the study showed.

Nordlinger’s suit was filed after the U.S. Supreme Court struck down in January, 1989, a West Virginia county’s “welcome stranger” method of taxing property--so called because longtime property owners pay much less in property taxes than their new neighbors.

In that case, the court held that the equal protection clause of the U.S. Constitution forbids taxing comparable property at widely disparate levels.

There were two key factual distinctions between the West Virginia case and Proposition 13. Proposition 13 is imposed throughout California, while the West Virginia assessments were made only in Webster County. Proposition 13’s measuring stick is purchase price while Webster County used current market value.