A split-roll property tax initiative has qualified for the November 2020 ballot, Secretary of State Alex Padilla announced October 15.
Initiative 17-0055, which will be assigned a proposition number in 2020, would impose a split-roll business property tax increase by requiring frequent market-value reassessment of commercial and industrial property, beginning with the 2020 lien date. It also would provide some personal property tax relief. (Click here to read CalTax’s analysis.)
The measure, supported by the California League of Women Voters and a coalition of other special interests under the banner of Schools and Communities First, needs a simple majority of votes to be approved.
“We are confident that Californians will protect their homes and jobs by voting against this flawed initiative and telling special interests to keep their hands off Proposition 13,” CalTax President and Chief Executive Officer Teresa Casazza said. “This measure would hit California businesses with higher property taxes, whether or not they can afford it, and would lead to higher prices for groceries, gas, restaurant meals, prescriptions, day care and many other things we use every day. This initiative increases the likelihood that businesses will move investments and jobs to states that are trying hard to lure employers, but we will fight for California by letting voters know the truth about this attack on Proposition 13.”
Proponents erroneously claimed that their initiative is “the first commercial property tax reform initiative to qualify for the ballot since the passage of Prop. 13 in 1978.” In fact, voters in 1992 rejected an initiative that included a split-roll provision along with other tax policy changes (Proposition 167, which was opposed by 58.8 percent of the voters). Voters also rejected a split-roll measure that was on the same ballot as Proposition 13 (Proposition 8, opposed by 53 percent).
According to State Board of Equalization data, homeowners have been the largest beneficiaries of Proposition 13. There has not been a shift in the property tax burden from businesses to homeowners – in fact, businesses now pay approximately 5 percent more of the total property tax burden than they did prior to passage of Proposition 13. Businesses paid approximately 58 percent of the total property tax burden in 1979, and this grew to approximately 63 percent in 2016-17.
State data also shows that the assessed value of business property has grown an average of 7.3 percent annually and homeowner property has grown an average of 6.34 percent since passage of Proposition 13, leading to increased growth in property tax revenue for local governments.
In 2018, property tax revenue grew an average of 5.42 percent in each county. Statewide, the assessed value of property grew more than $374 billion this year, on top of significant growth in prior years.
“That increase, three times the rate of inflation, translates into $4-plus billion more in revenue for cities, counties and other local governments,” CALmatters columnist Dan Walters noted October 17.
A poll released this week by the University of Southern California and the Los Angeles Times shows that many voters remain undecided about the split-roll measure.
According to the poll, 47 percent of respondents support split roll (20 percent “strongly” and 27 percent “somewhat”) and 22 percent oppose (12 percent “strongly” and 10 percent “somewhat”). The remaining 31 percent of respondents said they haven’t heard enough to form an opinion.
Earlier this year, the Public Policy Institute of California asked voters about Proposition 13, and 65 percent responded that passage of the measure has been “mostly a good thing.”
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