Consumer advocate focuses his energies on revamping Prop. 13

Dec. 28, 2014 7:06 PM PT

SACRAMENTO — Lenny Goldberg has been trying to revamp Proposition 13 for nearly 40 years. And for nearly 40 years, California’s landmark property-tax law has remained unchanged.

Goldberg’s self-described success rate: “pretty miserable.”

But he says that with a broad grin, without a hint of dejection. At 69, Goldberg, a legislative staffer-turned-lobbyist, has made a career of assailing the politically hallowed tax limit. Along the way, he became the political left’s go-to wonk, battling tax breaks for businesses and advocating for consumers against utility companies.

Starting next month, he’ll no longer be a registered lobbyist. Instead, he’ll focus all his energy on the elusive target: Proposition 13.

“It’s Lenny’s white whale,” says Tom Hayden, a former state senator who has known Goldberg since their student activist days.

As the law’s most persistent critic, Goldberg has become the intellectual heart of the movement to change it — in particular, to alter the way commercial properties are taxed. Such efforts have consistently been stymied in Sacramento, but now Goldberg and his allies are eyeing a different front: the ballot box, hoping voters can be persuaded that the 1978 measure needs updating.

Born in Queens on the cusp of the baby boom, Goldberg was a quintessential 1960s liberal: participating in civil rights sit-ins in Atlanta, leading the Williams College chapter of Students for a Democratic Society and arriving at the ultimate counterculture destination, UC Berkeley.

He pursued a doctorate in economics but stopped short, instead diving into Berkeley’s liberal political scene.

He arrived in Sacramento in 1977 as an aide to Democratic Assemblyman Tom Bates of Berkeley and jumped to lobbying in the mid-1980s. He juggled clients and led the California Tax Reform Assn., which was funded primarily by labor unions.

“He’s kind of like the shock troop that runs from hearing to hearing,” said Fred Main, a business lobbyist. “He’ll come in all disheveled because he was in another hearing, and now he’s running to try to get some final word” in another.

Main, a frequent sparring partner, said it can be difficult to get a word in.

“He isn’t afraid on occasion to interrupt — not always completely politely,” he said. “I enjoy Lenny … but he can be pugnacious.”

Goldberg has had some big wins — forcing Amazon.com Inc. to collect tax for online sales, among others — and smaller legislative successes, such as quashing a 2013 bill to overhaul the state’s telephone subsidy for low-income people.

“There is nothing more important than the ability to kill bad bills. That is Lenny’s genius,” said Mark Toney, executive director of the Utility Reform Network, a consumer advocacy group that hired Goldberg as a lobbyist.

Allies and adversaries say that if he is part bulldog, he is also part professor — complete with wire-rimmed glasses, a neatly trimmed white beard and an ever-present golf cap that covers his thinning hair.

“He’s a policy wonk of the first order,” said Barry Broad, a labor lobbyist, describing Goldberg’s advocacy style as “very, very, very tied to the facts.”

The bookish but savvy approach has earned him considerable clout for a consumer advocate who offers minimal campaign contributions to politicians and has little appetite for schmoozing.

When not stalking the halls, Goldberg lives in Davis with his wife, Katy, with whom he has two daughters and a stepson. He plays guitar in a couple of “old-man bands” around town; Jerry Garcia is his idol.

But the policy obsession never fully shuts off. In a book club that’s been going strong for 30 years, Goldberg favors voluminous nonfiction, especially economic tomes. But it is in opposition to Proposition 13 that Goldberg’s wonkishness is employed most.

The initiative capped property taxes at 1% of assessed value at time of purchase, and they cannot increase more than 2% a year unless there is a sale or major renovation. The rules apply equally to residential and commercial properties.

The change dramatically reshaped how state and local governments collected revenue — “hammered cities and local governments,” Goldberg said.

It created a system in which taxes on land remain low while the tax on purchases of business equipment remains at market value. It should be the opposite, he said.

He churns out research reports to make his case. In the industrial parks of Silicon Valley, for example, the tax on recently purchased land can be $54,000 per acre, while nearby landowners pay $985 per acre.

“It’s an irrational crazy-quilt pattern, wherever you look,” he said.

Goldberg wants commercial property reassessed periodically to capture rising land value. To spur investment, he proposes eliminating taxes on business equipment. But commercial interests vehemently oppose treating their property differently from residential property — a “split roll.”

“The business community believes it’s paying a lot of property taxes and is taxed fairly under the current system, and therefore you don’t need to change it,” said Main, a former top lobbyist with the California Chamber of Commerce. Any changes “should apply across the board for everybody, not just for the business community.”

That could be political suicide. Although recent statewide surveys show voters would support tinkering with treatment of commercial properties, they remain strongly in favor of the overall law.

“Prop. 13 stands as a symbol of protecting taxpayers,” said Joel Fox, formerly of the Howard Jarvis Taxpayers Assn.

Nevertheless, Goldberg projects a stubborn optimism that change is coming.

Last year, he backed a Proposition 13-related bill that would have clamped down on businesses carving up property ownership to avoid triggering tax reassessments. Business groups, including the Chamber of Commerce, were on board, acknowledging that such maneuvers can be used to avoid higher taxes.

But Goldberg suddenly withdrew his support, and the bill died. The move alienated some allies, and business lobbyists accused Goldberg of pulling a bait and switch.

Goldberg said the bill teased out support for tinkering with the law.

“The best possible outcome is that now the chamber’s on record now saying there’s a loophole in the system,” he said.

As for accusations he’s being inconsistent: “I’m old enough. I can take it,” he said with a shrug.

Goldberg now says he wants a “full-on, air-it-all-out discussion in the Legislature” about changing Proposition 13.

“If you have a serious discussion of the issue, the whole thing breaks down and people say this is an absurd system,” he said.

His fellow travelers — labor groups and grassroots organizations in Los Angeles and the Bay Area — have a more concrete mission: to put Proposition 13 changes on the ballot in 2016 or 2018. Goldberg, who is involved in those efforts, is hesitant to promise a date but said the groundwork — research, organizing, polling — is being laid.

“It’s Lenny’s work that has inspired this movement and informed the organizing,” said Los Angeles County Supervisor Sheila Kuehl, a longtime friend. “It’s Lenny’s work that provides the factual basis on which they’re organizing.

“And I think it will be Lenny’s work that provides the basis for the argument that will be made to the voters eventually,” Kuehl said.

Twitter:@melmason