Watch CBS News

Silicon Valley Researchers Say California Tax System Nearing Crisis

SAN JOSE (KCBS) – A new Silicon Valley report concludes that California needs to rethink how local government services are financed, while also calling for a re-examination of Proposition 13.

The 2012 Silicon Valley Index shows a major crisis brewing in the public sector, asserting that the present tax system is outmoded.

"Our tax system is pegged to an earlier kind of economy," said Russell Hancock, CEO of Joint Venture Silicon Valley. "It's heavy on property tax and sales tax and it doesn't capture internet transactions or the services."

KCBS' Mike Colgan Reports:

Emmet Carson, CEO of the Silicon Valley Community Foundation, said that Prop. 13, which was enacted in 1978 and limited property taxes to one percent of assessed value, no longer works today.

"Because of the great recession, our current method for how we assess property values and raise tax revenue to support public services is broken," said Carson.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.