Tax on commercial properties for education and Local Government funding (2020) is actually Phase 1 of Prop 13 Repeal. VOTE NO on AB-48 at the California Primary March 3, 2020. This is hidden as an Education Measure to bring down Prop 13. VOTE NO ON AB-48
California’s Proposition 13, a ballot initiative in 1978, required all properties to be taxed at no more than 1 percent of the purchase price and increased at the rate of inflation or 2 percent, whichever is lower. A ballot measure proposed for the 2020 election that would change Proposition 13’s tax protections for commercial properties. The proposed ballot measure would create a split-roll for property taxes; residential properties would keep their tax protections, while commercial properties would have their tax protections limited or removed. Residential properties would continue to be taxed at the property’s purchase price, while commercial and industrial properties would be taxed based on their market value, instead of the purchase price, and the revenue generated from this change would go to local government and school districts.
In 1978, California voters passed Proposition 13, which set property taxes for residential and commercial properties at 1 percent of the purchase price. Proposition 13 also limited property taxes’ annual increases to 2 percent per year. This prevents owners from being pushed out of their homes and businesses because of an inability to pay property taxes because of property value increasing rapidly.
Proposition 13 also established that any measure proposed for increasing state revenues be approved by a two-thirds vote from each house of the legislature. Since Prop 13 passed in 1978, property tax revenues have grown for $5 billion to $66 billion in 2017-18, which is an average of 6.9 percent annually. Prop 13’s tax limits and protections, on average saved homeowners an estimated $13,700 and renters $4,400 in 2017.
The proposed ballot initiative that would change the tax protections for commercial and industrial properties while keeping the protections for residential properties, this is known as a split roll. The proposal would require those commercial and industrial properties, except for properties zoned as commercial agriculture, to be taxed based on the market value. This property tax split-roll would also increase property taxes for businesses by requiring that property taxes be reassessed every three years. Residential properties would continue to be taxed based on the purchase price, with annual adjustments made at the rate of inflation or 2 percent, whichever is less.
The initiative would offer tax exemptions for industrial and commercial properties that are businesses with 50 or fewer full-time employees, for the first $500,000 in a business’s personal property, for businesses that are valued at less than 2 million dollars, with adjustments for inflation starting in 2023.
Continually, the ballot initiative is estimated to bring in $11 billion dollars in additional revenue, which would be distributed to local governments and school districts. 11 Percent of the funds would be allocated for community colleges, and 89% would go to public schools, charter schools, and county education offices, according to the state distribution formulas.
Schools and Community First
California Teachers Association
SEIU California State Council
California Democratic Party
Californians to Stop Higher Property Taxes
California Business Roundtable
California Chamber of Commerce
California Taxpayers Association