California could raise $6 billion a year for its strapped local governments and schools by assessing business property at current market value, a tax group says.
"The assessment of business property is completely irrational, completely indefensible and riddled with holes," said Lenny Goldberg of the California Tax Reform Assn.
The group put together a 132-page study of how they say Proposition 13 should be changed. The report said businesses have received the bulk of savings from the property tax cut.
Fred Main, a spokesman for the California Chamber of Commerce, said bringing business property up to market value would "be a death knell for California's business climate."
"The property tax is one of the positive factors that attracts businesses to California," he said. "Changing that would have a very harmful effect on the state."
Goldberg said that probably the only way the business assessment formula in Prop. 13 will be changed is through an initiative, but he predicted that one won't happen in the near future.
Prop. 13 is the initiative sponsored by the late Howard Jarvis and the late Paul Gann that voters approved in 1978. It set property taxes at 1% of assessed value and allows assessed values to increase 2% a year until a piece of property is sold.
When a sale occurs, the property is reassessed at current market value.