CALTAX COMMENTARY:
Measure EE Tax Increase Would Hurt Los Angeles Residents

gutierrezBy CalTax President and Chief Executive Officer Robert Gutierrez

This column was published May 22 in the Los Angeles Daily News.

Supporters of Measure EE talk a lot about where revenue from the new tax would be spent, but little about the Los Angeles residents who will pay higher property taxes if the June 4 measure is approved.

It’s impossible to estimate exactly how much Measure EE would cost taxpayers (more on that in a minute), but supporters claim the cost would be $500 million per year for 12 years.

The tax would be imposed on homes, apartments, restaurants, small businesses, etc., within the massive Los Angeles Unified School District, further increasing the high cost of living in this area.

The cost could be much higher than $500 million per year, because the politicians who put the measure on the ballot expanded the tax after the revenue estimate was prepared. The school board placed Measure EE on the ballot without giving the public an opportunity to review the language.

The tax adds up fast. The median home size in Los Angeles is 1,800 square feet, according to the research company PropertyShark, and the Measure EE tax on such a home would be $288 per year for 12 years – a tax increase of $3,456.

The cost would be higher for many homeowners, and much higher for small businesses that rent large buildings like warehouses and showrooms.

Even those who don’t own property would pay more through higher rent, lost job opportunities, and higher prices at stores and restaurants that have to find a way to cover the cost of the tax hike.

Many owners don’t know what their tax would be. Even if you know your home’s square footage, it might be hard to calculate what is taxable under Measure EE. The shed where you store your lawnmower? The greenhouse in your backyard? Outhouses that businesses use for seasonal events?

In a state where major battles are fought over whether mobile homes are taxable as vehicles or buildings, whether property tax can be imposed on intangible property features like a business’ goodwill, and how food temperature impacts sales tax, such questions aren’t trivial. The answers will significantly impact many taxpayers’ budgets.

Considering that Measure EE has no appeals process for those who dispute the government’s tax calculations, the uncertainty is especially bad.

Whatever the tax would be, it would be on top of existing parcel taxes for various local government agencies, Mello-Roos taxes and taxes used to repay school and general obligation bonds – not to mention the traditional property tax, which is a steady, growing source of revenue for local schools.

Los Angeles County Assessor Jeffrey Prang predicts a 5.7 percent increase in the value of taxable properties this year. The county’s taxable property value already was at a record high, and this will be the ninth consecutive year of significant increases. The state’s legislative analyst projects that the county’s property tax roll will increase another 5.5 percent next year.

In addition, California’s sales tax and highest-in-the-nation state income tax led to a state budget surplus of $21.5 billion, and are fueling what Governor Gavin Newsom called the state’s “largest-ever investment in K-12 schools.” Newsom’s budget calls for total funding of $101.8 billion for all K-12 education programs, and will provide the schools with more than $17,100 per pupil – a record high, and roughly $5,000 more per pupil than eight years ago.

Los Angeles taxpayers already are paying their fair share, and shouldn’t be asked to pay yet another tax bill.

Vote “no” on Measure EE.

« Return to CalTax Homepage

© California Taxpayers Association. All Rights Reserved.