Calling Proposition 13, "deeply flawed," a new report by the Lincoln Institute of Land Policy recommends entirely new approaches to property tax relief.

Some of what the report says has been reported previously: Proposition 13 has resulted in radically different tax bills for similarly situated properties; the measure places a disproportionately large tax burden on new homebuyers; it has benefited commercial property owners more than residential owners; and it has forced local governments to compete for sales tax-generating development (see CP&DR, June 1998). The report also argues that severing the connection between property values and property taxes makes the tax system unaccountable and unclear. The authors further contend that Proposition 13 causes homeowners to stay put even when moving closer to a job otherwise makes sense.

"Assessment limits are often put forward as a means of combating two problems popularly associated with rapidly appreciating property values: increasing tax bills and the redistribution of tax burdens," according to the report, Property Tax Assessment Limits: Lessons from Thirty Years of Experience. "In fact, 30 years of experience suggests that these limits are among the least effective, least equitable and least efficient strategies available for providing property tax relief."

The report was prepared by Terri Sexton, an economics professor at California State University, Sacramento, and associate director of the University of California, Davis, Center for State and Local Taxation, and by Mark Haveman, executive director of the Minnesota Taxpayers Association. They recommend four alternatives to Proposition 13:

• "Circuit breaker programs" that cut taxes when they rise above a certain percentage of income.

• "Truth in taxation" measures that require public notice or even elections before tax revenues may exceed the prior year's total.

• "Deferral options" that permit qualifying owners to delay tax payments until their home is sold or estate is settled.

• "Partial exemptions" for owner-occupied housing units, and "classified tax rates" that permit rates to rise for commercial and industrial properties.

The report is available on the Lincoln Institute website,