Informational Hearing Makes Damage to State Clear
Board of Equalization (BOE) Member Ted Gaines today held an informational hearing that considered both the pros and cons of Proposition 15, California’s “Split Roll” initiative that will appear on the November ballot. Following the hearing, Member Gaines came out in forceful opposition to the measure.
“California is straining under the coronavirus. Millions are unemployed, businesses are closed, and the last thing we need right now is $12 billion in new taxes put on the backs of struggling families. We are a resilient state and I’m convinced we will recover but for that to happen we need a business climate that promotes prosperity. Proposition 15 does the opposite. It will crush agriculture. It will hurt the mom and pop shops who are already at risk and scared for their futures. It will drive businesses out of our state.” Gaines said.
Prop. 15 would undo valuable taxpayer protections provided by California’s landmark Prop. 13, which was passed in 1978. Prop. 13, among other changes, implemented a predictable, stable property tax regimen in California, where commercial and residential properties are taxed at 1-percent of their purchase prices and increases in property tax are capped at 2-percent a year from that purchase-price valuation.
Under Prop. 15, many commercial properties would be subject to reassessment annually, or at least every three years, opening the door to the unpredictable property tax spikes that forced seniors out of their homes in the 1970s and contributed to the taxpayer revolt that ended in passage of Prop. 13. It is referred to as “split roll” because it would lead to different treatment of residential and commercial properties in the property tax roll.
In addition, under the measure’s definition of “real property used for commercial agriculture,” fixtures and improvements such as irrigation systems, barns, tasting rooms and even fruit trees would be subject to reassessment, exposing the agricultural sector to a wave of new and higher taxes. Additionally, the nonpartisan Legislative Analyst’s Office review of Prop. 15 indicates that rural areas may end up losing money overall if the initiative passes, even as their agricultural interests pay more in taxes, providing a double blow to these communities.
Gaines hosted today's Prop.15 informational hearing, convening initiative supporters and opponents, assessors, the Legislative Analyst’s Office, Board of Equalization personnel, as well as tax professionals involved in the property tax appeals process. The hearing was non-partisan and did not call for the Board to take a position on the measure. It was designed to give Board Members deeper insight into the alleged need for the initiative, how it would be implemented, and how it would affect property tax administration in the state. However, the day’s testimony made clear to Gaines that the measure would be a disaster for California taxpayers and businesses.
“When will California taxpayers ever catch a break? They pay the highest gas taxes, highest state sales tax, highest income taxes, highest corporate tax in the western states; it’s never ending. If this Initiative were to be successful, I have no doubt that Prop. 13 homeowner protections would be the next target.
“I support Prop. 13. For four decades it’s been the bedrock protection for homeowners and business property owners. As a taxpayer advocate, I oppose split roll and every other effort to raise California taxes.”
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Elected in 2018, Ted Gaines represents nearly ten million people as a Member of the Board of Equalization.
Board of Equalization (BOE) Member Ted Gaines today held an informational hearing that considered both the pros and cons of Proposition 15, California’s “Split Roll” initiative that will appear on the November ballot. Following the hearing, Member Gaines came out in forceful opposition to the measure.
“California is straining under the coronavirus. Millions are unemployed, businesses are closed, and the last thing we need right now is $12 billion in new taxes put on the backs of struggling families. We are a resilient state and I’m convinced we will recover but for that to happen we need a business climate that promotes prosperity. Proposition 15 does the opposite. It will crush agriculture. It will hurt the mom and pop shops who are already at risk and scared for their futures. It will drive businesses out of our state.” Gaines said.
Prop. 15 would undo valuable taxpayer protections provided by California’s landmark Prop. 13, which was passed in 1978. Prop. 13, among other changes, implemented a predictable, stable property tax regimen in California, where commercial and residential properties are taxed at 1-percent of their purchase prices and increases in property tax are capped at 2-percent a year from that purchase-price valuation.
Under Prop. 15, many commercial properties would be subject to reassessment annually, or at least every three years, opening the door to the unpredictable property tax spikes that forced seniors out of their homes in the 1970s and contributed to the taxpayer revolt that ended in passage of Prop. 13. It is referred to as “split roll” because it would lead to different treatment of residential and commercial properties in the property tax roll.
In addition, under the measure’s definition of “real property used for commercial agriculture,” fixtures and improvements such as irrigation systems, barns, tasting rooms and even fruit trees would be subject to reassessment, exposing the agricultural sector to a wave of new and higher taxes. Additionally, the nonpartisan Legislative Analyst’s Office review of Prop. 15 indicates that rural areas may end up losing money overall if the initiative passes, even as their agricultural interests pay more in taxes, providing a double blow to these communities.
Gaines hosted today's Prop.15 informational hearing, convening initiative supporters and opponents, assessors, the Legislative Analyst’s Office, Board of Equalization personnel, as well as tax professionals involved in the property tax appeals process. The hearing was non-partisan and did not call for the Board to take a position on the measure. It was designed to give Board Members deeper insight into the alleged need for the initiative, how it would be implemented, and how it would affect property tax administration in the state. However, the day’s testimony made clear to Gaines that the measure would be a disaster for California taxpayers and businesses.
“When will California taxpayers ever catch a break? They pay the highest gas taxes, highest state sales tax, highest income taxes, highest corporate tax in the western states; it’s never ending. If this Initiative were to be successful, I have no doubt that Prop. 13 homeowner protections would be the next target.
“I support Prop. 13. For four decades it’s been the bedrock protection for homeowners and business property owners. As a taxpayer advocate, I oppose split roll and every other effort to raise California taxes.”
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Elected in 2018, Ted Gaines represents nearly ten million people as a Member of the Board of Equalization.
