By Donald H. Harrison
SAN DIEGO — California Proposition 15 would increase taxes on commercial and industrial properties worth more than $3 million by changing the method by which their tax liabilities are calculated. Under current California law, property is assessed on the basis of what the owner paid for it, and that value is calculated to increase 2 per cent per year. Under Proposition 15, commercial and industrial properties worth more than $3 million would be taxed on the basis of what they could be sold for.
Today businesses pay taxes on business equipment. Under Proposition 15, these taxes would be eliminated for companies owning less than $500,000 in business equipment. This portion of the ballot measure was designed to assist small businesses. However, opponents of the measure warn that wealthy landlords might seek to pass on their new expenses in the form of rent increases.
The measure does not impact residential properties. Nor does it affect agricultural land.
However, in the official ballot arguments offered by the opponents, we are told supporters of Proposition 15 will seek to eliminate residential protections next — “meaning skyrocketing taxes for all homeowners!”
This kind of argument is properly understood as a scare tactic. The measure before the voters says explicitly that residential property will continue to be taxed according to the current system. Opponents want us to believe that there is a deep, dark conspiracy to boost residential property taxes sometime in the future. Even in the unlikely event that this were true, voters still have the opportunity to defeat such a measure at the polls.
So, what would Proposition 15 do? According to the nonpartisan legislative analyst, it would raise between $6.5 billion and $11.5 billion yearly from wealthy corporations and enable local governments (counties, cities, college and school districts, and special districts that provide such services as fire protection, water and sewer services) to tackle some of the most pressing problems in our area. In the view of proponents, “these billions could be used … to deal with increasing inequality, persistent poverty, unaffordable housing, homelessness and underfunded schools.”
The decision how to use the funds would be up to the local governments themselves, which would be required “to publicly disclose all new revenues they receive and how they are spent,” according to the proponents.
Signing the ballot arguments and rebuttals for proponents were State School Superintendent Tony Thurmond; Jacqueline Martinez, CEO of the Latino Community Foundation; Sasha Cutler, a public health nurse with the San Francisco Department of Health; E. Toby Boyd, president of the California Teachers Association; Carol Moon Goldberg, president of the League of Women voters; and Tara Lynn Gray, CEO of the Fresno Metro Black Chamber of Commerce.
Opponents signing the ballot arguments and rebuttals were Jon Coupal, president of the Howard Jarvis Tapayers Association; Alice Huffman, president of the California State Conference of the NAACP; Betty Jo Toccoli, president of the California Small Business Association; and Robert Gutierrez, president of the California Taxpayers Association.
We think the benefits far outweigh the potential costs — especially those that are only imagined by fearmongers. We urge a Yes vote on State Proposition 15.
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Donald H. Harrison is editor of San Diego Jewish World. He may be contacted via donald.harrison@sdjewishworld.com
I don’t know how your system works but such a proposition in NZ would simply be put to the house of representatives by the government and would be passed. Tax issues never become a referendum issue here. Just party policy
God bless you, Don. This is so needed for CA. The original Prop 13 was a Trojan horse passed in 1978 for commercial owners–even though there were terribly rising property tax costs for private homeowners. What people did not see for years after was, not just the cuts in local library and school services, and the rise of state power over local school funding. What happened was that the amount of money raised from property taxes flipped so that, instead of the bulk coming from commercial property owners, the bulk began to come from private homeowners. There was a flat 1% rate for all property owners, but individuals tend to move much more than, say, Sea World, Disneyland, Sempra Energy, Qualcomm, Union 76 Oil, etc., and Prop 13 was written to reassess the value every time there was a sale of a piece of property. Also, CA began to have to rely more on income taxes as a basis for revenue, which would not be as bad if there was more stability of revenue coming from the larger business land owners. The problem that CA began to have starting in the 1980s, was that, in a recession, income tax revenue tends to drop significantly, and that exacerbates a government budget when government is needed most to take care of unemployed or loss business revenue from customers not purchasing goods and services. This is what led to draconian budget cuts–well, that and the stupid balanced budget requirements, but that is another story (Suffice it to say the 5th largest economy could do wondrous things by going out on the market with deficit spending, though I hope that is not too Alexander Hamiltonian for people). Anyway, there was also a smart move by the state legislature in setting up this much-needed proposition, when they passed a statewide rent-control law. This way, greedy big-time apartment property owners (who have had a party for over 42 years since 1978) cannot simply raise rent. You are correct the split property tax roll does not begin until a property reaches $3 million in value, so the people renting out a room in a house need not fear this proposition at all.
Overall, I hope this passes, though I have not been able to count on usually brighter CA voters to see through the greed of capitalists who gain from passive ownership of land. If only Henry George’s late 19th Century principles regarding the limitations of profit in land could become part of the overall conversation. However, with the propaganda of the past 75 years from conglomerate owned media, and the poison especially from hate talk radio, I am afraid that is a bridge too far.
Hi Don:
Your support of prop/15 amazed me.Do you realize that it’s a classic ponzi scheme, where somebody says your property is worth more and you are taxed on the higher amount. In reality anything and everything is only worth what it sells for not what you may think it’s worth.
It starts with industrial and commercial properties, so a shopping center pays more real estate tax,the owner passes the increase to the tenants who then pass it to the consumers,this is of no benefit to the consumers.
The next step could possibly be to include residential properties,
I see prop 15 as a way to void the original Jarvis prop 13 which limits arbitrary raising property tax basis.
I’ve said my piece.
Stay well and have a nice day