Highlights of Split Roll Property Tax Initiative on November 2020 ballot
- This proposed initiative seeks to raise up to $12 billion a year through a split roll property tax on commercial and industrial properties. The proposed initiative is an effort to correct flaws in a previous proposal that has already qualified for the November 2020 ballot.
- If approved by voters, the new measure would require that, beginning with the 2022–23 lien date, all commercial and industrial properties, with some limited exceptions, be reassessed to full market value, and then reassessed every three years. Exempted from this requirement would be any residential property, including rental housing, property used for production agriculture, and some small business property holdings. The measure also would exempt from taxation tangible personal property up to $500,000 per taxpayer, and all tangible personal property for certain small businesses.
- The proposal will increase property taxes on business by 25 percent, representing the largest tax increase ever in California.
- According to the Legislative Analyst, up to $1 billion a year of the new taxes will be sent to state and local governments for implementation, overhead, and existing state programs. This means that up to $1 billion a year will be intercepted before the funds can be used to hire any new school teachers, police officers or firefighters.
- Since Proposition 13 passed in 1978, California property taxes remained stable and relatively moderate, compared to the rest of the county. Proposition 13’s acquisition-value assessment system keeps the property tax stable and is an enormous benefit to California taxpayers. Changing this system make the property tax a volatile revenue source for local government, triggering large government services cuts in recessions when people need services most.
- The higher taxes imposed by the split roll measure would likely be passed on to consumers, or would force businesses to reduce overhead costs, such as employee hours or positions. According to a 2012 study by the Davenport Institute at Pepperdine University, a split roll could cost the California economy $71.8 billion of lost output and 396,345 lost jobs over the first five years.
CalChamber co-chairs the Californians to Stop Higher Property Taxes coalition that is leading the opposition to the split roll ballot measure proposals. FWEDA is a member of the coalition.