Proposition 13, for 32 years, has been the Sacred Cow of California politics. Sacred or not, it is time to modify Prop 13.

Proposition 13 basically prevents increases in property tax regardless of how much the property appreciates. If you bought a home in 1970 for $25,000, your property taxes in 2010 are going to be based not on the current market value, but on the 1970 value, adjusted upward 2% per year. This means that the assessment on a property acquired for $25,000 in 1970 is now valued, or tax purposes, as if it has a value of about $45,000, even if its actual value is, say, $450,000. The tax on this property would be about $450 per year. The tax on an identical home next door, but just recently purchased by a young family would be ten times that amount, or $4500 per year. Unfair? It depends on who you ask. The older gentlemanwho has had his home for 40 years thinks its great. The young family next door disagrees.

But fairness or lack thereof in unequal taxation of identical residential property is the least of my concerns.

The place where we should consider reform is in the area of income property. Business owners and landlords who have owned their property for 30 or 40 years are paying as little as 10 cents per year per square foot in property tax. Compared to a tax of $2 or $3 per foot per year for newly acquired property, whether it is residential or commercial.

Thus a young family of 4 struggling to buy their first new house will pay about at least 10 times more tax per square foot than the landlord who owns an identical home, but has owned it for 40 years.

There is a mobile home in our area which occupies 55 acres and has about 250 spaces. It has been owned in the same family for 50 years. It grosses about $1.5 million per year in space rentals. It's annual property tax is only about $18,000 per year--the same tax on 250 households as would be paid by 5 households for recently acquired homes.

And don't tell me that making older landlords pay their fair share of property tax will mean rent increases. Landlord base their rent on what the market will bear. Don't for a minute imagine that any landlord rents for less than fair market value because he pays less property tax than his market competitors.

So what's the point? We should consider amending Proposition 13 to bring property taxes paid by businesses and landlords in parity with the taxes paid by new property owners. It is time to make the Sacred Cow pay its own way.