by Katy Murphy
A ballot initiative to tax California’s business and industrial properties based on regular assessments of their value — a major rewrite of Proposition 13, the state’s landmark constitutional amendment limiting property taxes — could be headed for the November 2020 ballot.
A large coalition of community groups spearheading the initiative, including the League of Women Voters, has announced it has gathered the required signatures. The campaign is holding rallies from Berkeley to San Diego on Tuesday as supporters deliver 850,000 signatures to county election offices for verification; it needs 585,407.
The proposed overhaul of Proposition 13 — long sought by progressives — could yield $6 – $10 billion annually in additional tax revenue for public schools, community colleges and public services, according to the state’s nonpartisan Legislative Analyst. While panned by at least one county assessor as unworkable — and sure to be fought by real-estate interests and large companies if it went forward — proponents say the initiative would bring in sorely needed dollars for schools, lift some of the tax burden from homeowners and level the playing field between new and more established businesses.
“My elevator pitch is that residential property owners are paying a disproportionate share of current property taxes for local schools and community services,” said Helen Hutchison, an Oakland resident and president of the California League of Women Voters.
The initiative takes aim at the commercial side of a property-tax measure that voters enshrined in the state Constitution in 1978 as part of a statewide tax revolt. Under Prop. 13, businesses get the same break as homeowners; the taxable value of their properties is reassessed only when the property changes hands or undergoes significant upgrades.
If the constitutional amendment is successful, however, many companies would have their properties reassessed regularly — a change that, by the state’s estimates, could raise their collective tax bills by billions of dollars. The initiative carved out exceptions for small businesses, vacant property intended for agriculture or housing, and the owners of apartment complexes. It would not affect taxes on residential properties.
Larry Stone, the assessor for Santa Clara County, has been a vocal opponent of the ballot initiative, calling it poorly written and laden with unintended consequences. His complaints range from the cost of implementation to the mountain of tax appeals he expects companies to file each year, hoping to run out the clock on the counties’ two-year deadline to resolve such cases.
“The intent of this measure is laudable,” said Stone, who said he shares many of the proponents’ complaints with Prop. 13. “But this ballot measure is poorly written, extremely convoluted and impossible — not hard, impossible — for assessors in the state of California to administer.”
Hutchison countered that the initiative leaves room for the Legislature to make adjustments, such as when the new system would roll out, early 2021, a date originally written when the campaign was vying for the 2018 ballot. Like many critics, she points to Proposition 13 as a turning point in funding for public education and other public goods and services.
“The 40-year starvation diet is showing,” she said.