SACRAMENTO -- It's no wonder Disneyland's owners call their amusement park the "happiest place on Earth." For much of its land, Disney pays only a nickel per square foot in property taxes.
In Hollywood, Capitol Records pays a dime per square foot in taxes on the land beneath its famous tower, which resembles a stack of records on a hi-fi. In downtown Los Angeles, owners of the Wells Fargo Center pay about $1.77 a square foot.
These longtime landowners are beneficiaries of Proposition 13, the landmark 1978 ballot initiative that slashed California property taxes. Other property holders aren't quite so lucky, tax records show.
Owners of the SunAmerica Center in Century City pay more than $5 a square foot for their land; the Beverly Wilshire Hotel's owners pay more than $6 a square foot. In San Francisco, the insurance giant that owns the Transamerica Pyramid pays almost $10 a square foot on that plot.
Such disparities, some lawmakers and tax experts say, show that some businesses do not pay their fair share, depriving government of billions of dollars in much-needed revenue.
Critics say the tax structure shelters older businesses; commercial properties change hands less often than homes, putting a larger burden on newer businesses.
In addition, the system gives publicly traded companies a break that other businesses and homeowners don't get. The result of all this is that homeowners bear an increasing share of the overall tax burden, they say.
Many legislators are casting covetous eyes toward commercial property as a source of tax revenue as they struggle to fill California's $38-billion budget hole.
"This is like the rhinoceros in the living room," said Assemblywoman Loni Hancock (D-Berkeley). "It is one of the major loopholes in our tax structure."
Business interests point to the high cost of land, electricity and insurance in California, and say relatively low property taxes are one of their few breaks. A jump in property taxes could force them out of the state or into bankruptcy, they say.
"Folks who don't want to reduce the cost of government are looking everywhere they can to increase costs on business," said Jack Stewart, president of the California Manufacturers and Technology Assn., one of the state's main business lobby groups. "We ought to be looking at ways to lower all the taxes, not raise them."
