This coming November, Californians have several Propositions to vote for. Often times these are quite confusing so I thought I would explain this in layman’s terms. For what it is worth I will also give my own reasoning on why I support or oppose these Propositions. To see the Propositions in their entirety you can go to www.ballotpedia.org
Proposition 15 Increase funding for Public Schools, Community Colleges, and Local Government Services by Changing Tax Assessment of Commercial and Industrial Property
The ballot initiative would amend the California State Constitution to require commercial and industrial properties, except those zoned as commercial agriculture to be taxed based on their current market value. This would “Split” it into two ways that Property Taxes are collected. This would raise taxes on most commercial properties while leaving residential property taxes alone. Hence the term “Split-Roll” The new way Commercial Properties would be taxed would be based on current market value. This would overturn what was established in 1978 with Proposition 13 which locked in all property taxes to the sell price with annual increases equal to the rate of inflation or 2 percent, whichever is lower.
A Yes Vote supports overturning this State Constitutional Amendment to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, rather than their purchase price.
A No Vote opposes this constitutional amendment, thus continuing what Proposition 13 established and continue to tax commercial and industrial properties based on a property’s purchase price, with annual increases equal to the rate of inflation or 2 percent, whichever is lower.
My Opinion: A No Vote – Why? This is sneakiness at its best and in multiple ways. First, they claim it is for local School Districts and Community Colleges, but the truth is only 40% will go to that. Also, this is cracking the door open to abolish Proposition 13 altogether. They will start with Commercial Property Taxes and next up will be the Residential Property Taxes. Once we give them an inch, they will try to take a mile. Some may say “So what? Tax big businesses.” But who will ultimately pay the price? The Consumer of course. Businesses will raise prices to offset their higher property taxes. This is a bad Proposition any way you look at it. It would be catastrophic for California’s economy and for consumers if property taxes were raised on every business in California at the same time, over and over again as real estate values rise year after year without limitations.