Posted on 01/21/2020 8:38:18 PM PST by nickcarraway
The 2020 ballot initiative would amend the state constitution to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value.
Under the new initiative, residential properties are excluded from this potential policy and would continue to be taxed under the original requirements of Proposition 13, when property ownership changes or when new construction is done.
Property tax rates would not change, and there would be a qualified exception for some small businesses, according to official documents.
First set in 1978, Proposition 13 places a cap on tax rates for residential, commercial and industrial properties at 1 percent of the property’s purchase price, with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower.
This is meant to protect financially vulnerable property owners, as market values in California tend to increase faster than 2 percent per year, meaning the taxable value of commercial and industrial properties is often lower than the market value, according to the state Legislative Analyst’s Office.
The passing of Proposition 13 in 1978 has been credited with reducing California property taxes by about 57 percent.
The projected fiscal impact of passing the modification of Proposition 13 would be a net increase in annual property tax revenues of $6.5 billion to $10.5 billion in most years, depending on the strength of real estate markets.
After paying for county administrative costs and repaying state income tax losses related to the measure, the remaining $6-10 billion would be “allocated to schools (40 percent) and other local governments (60 percent),” according to the official language of the proposed modification.
“We’re asking for companies like Disneyland or Universal Studios that make huge amounts of money to pay property taxes based on fair market value—the same thing that homeowners and, frankly, most businesses have to do,” said Josh Pechthalt, president of the California Federation of Teachers, in an August 2018 interview.
Critics of the proposed measure warn that in a state with high property values, the measure could force large employers to pass higher costs on to consumers, cut back on hiring or flee to low-tax states.
In February 2019, Tom Campbell, former state director of finance from 2005 to 2006, said, “From the point of view of attracting and retaining businesses and jobs, the power of Prop. 13, rather, was in allowing California to tell a business: go ahead and sink that concrete into Texas if you want, but you’re taking a big risk that Texas won’t revisit that building a few years later and double your tax assessment. With California, you’re safe. … In repealing Proposition 13 for businesses, California will be forfeiting our best argument to attract new jobs – a long-term sacrifice that will hollow-out California’s economy, costing us far more (than) $10 billion in a very short time.”
These constitutional amendments would, among the previously explored taxation adjustment, create the Local School and Community College Property Tax Fund. It would be this fund where 40 percent of the revenue from the adapted proposition would go.
On the Ballot
A “yes” vote would support the constitutional amendment to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, rather than their purchase price, and allocate revenue from the change to local governments and school districts.
A “no” vote would oppose the constitutional amendment, thus continuing to tax commercial and industrial properties based on a property’s purchase price, with annual increases equal to the rate of inflation or 2 percent, whichever is lower.
For more information on the measure, read the full text here.
Just to be clear, it’s only a matter of time until they go after prop 13 regarding residential properties. Bet the rent.
Then again, since the only one’s that are benefiting in a big way are the elderly who’ve been in their homes for 30, 40 and 50+ years, are all dying off. Those folks in their late 80s and in their 90s are dwindling away. What’s left will be paying double, triple, quadruple and more in property taxes.
In not to many years, prop 13 will just become a small benefit to only a very few as the days of homes in CA doubling and tripling in price are long over....
But it's going to be a disaster. There are already upscale towns in this area, where most businesses can't afford the rent. Even some chains/nationwide businesses can't afford it. If prop 13 is gone, how many of these businesses will be forced out. Id they do it residential only internet millionaires will be able to afford it. They might as well ban retirees from most the state.
Why is it so hard to understand that shifting increased taxes to those who will pass it along to consumers is a backdoor tax for all. And if the commercial activity is unable to compete locally they close up shop and move to where they can compete. You cannot have a leftist oriented state that is redistributive without constantly seeking new avenues of income.
Most retirees in CA don't need to be banned. Most leave on their own. Most of the older one's I knew who were still left, were certainly not happy campers as they watched their friends and families move and bail out. It's a scenario that's repeated itself millions of times.
BTW, no surprise about them going after prop 13 commercial/business properties. No surprise at all. It's a punitive state to live in nowadays. All changes are for the worst. It never gets better in CA.
No it doesn’t. It increments at a maximum rate of 2% / year.
I’m paying double what I paid when I bought my home in property taxes.
My proposal is leave it where it was when the property was bought. Or just abolish the whole damn idea in the first place since it’s a disgusting relic of feudalism.
Not having to pay Tribute to the Manor Lord (the bureaucrats now) was a basic idea of the American rebels...my ancestors. And property tax was originally meant to only apply to productive land - it was the original income tax. Your homestead was never meant to be taxed - that’s why there’s a Homestead Exemption in the amount of $7000 on your property tax bill: it was the 1972 baseline, kept there under Jarvis-Gann.
In 1972 that was a significant portion of actual home cost, and is meaningless now.
We already pay enough in income taxes and sales taxes to fund essential government “services” in California - no reason to hold our land and buildings hostage to a bunch of grifter scum down at the county building.
End the last artifact of The Feud in America - abolish property taxes! It’s our property, not theirs.
Of course. This is just the camel's nose under the tent. It's a way of fooling voters by clothing bad legislation with supposedly "good" intent. Old story. California's a working laboratory for direct democracy, which is two wolves and one sheep voting on what they'll have for dinner.
“Just to be clear, this initiative is only about commercial properties. But, it’s just a first step to getting rid of Jarvis-Gann completely.”
First they came for the commercial properties, but I didn’t complain because I don’t own any...
Here in NJ we’ve had a 2% cap on property tax increases since Chris Christie was governor, and it played out exactly as I’d been warned by a friend in CA; the public worker castes get raises higher than 2%, and other areas suffer from lack of funds. The roads fall apart, foliage grows over stop signs and such, and newcomers don’t want to buy into existing areas - they’d be the suckers paying far higher property taxes than their established neighbors. In CA this wasn’t a problem because a whole new neighborhood would spring up a little further down the road; there is plenty of space. In NJ, this has contributed to a mass of single-family homes for sale with few buyers, while multi-unit hives for childless drones spring up on any remaining buildable land - and immigrants are trafficked here to fill them.
In NJ, there would be opposition to eliminating property tax altogether because the alternative would see even more working Americans’ taxes being funneled towards the dying, bankrupt cities; “home rule” is viewed as sacred here.
I'm not seeing the logic in your argument. In CA there is a lack of space. Housing situation is in crisis mode, as there is a lack of space to build near where the jobs are located. Lack of housing is causing workers to commute more than 100 miles to their jobs. I doubt this is happening in NJ. In the SF Bay Area, there is little space for new building, few empty lots. So they're building high rise towers and creating crowded conditions with massive traffic problems. Neighborhoods are fighting local city councils regarding high rise towers; we don't want them replacing single family homes. We just lost a fight in my neighborhood where we have 1 to 2 story homes, a developer wanted to build a 16 story condo tower about 4 blocks from me, city council got them to reduce to 8 stories for 800 residents. Two other high-rise developments planned on the two surrounding blocks. Lack of space is causing developers to build upwards. Too many newcomers, we wish they'd go back where they came from.
Oh, wait.
None of them will do that.
They will divide the new tax amount by the number of clients/sales, and add that much to each transaction.
So, who pays the tax?
That's right! You, the consumer does!
The legislature always looking for ways to use businesses to act like the tax collector for them, because they do not have the balls or ovaries to tax the consumer directly (the homeowner) because there are too many of them and they all vote!
Whereas, if they only promise to raise taxes on the businesses, the gullible will think, "ha ha, look at those guys, they deserve it, while we skate."
It is the same thought process and plan for minimum wage, living wage, and that most recent one, the employee/hired professional bs.
Isn’t a portion still actually going to the schools, but what it added was then taken away from tax revenues? Feels like money laundering in a way.
The AG becera is a big reconquista guy. He’s the one who told business owners if they cooperate with ICE he will arrest them for violating the sanctuary law.
Lack of space. LOL? Only if you HAVE to live on the coast
Prop 13 limits the property tax at 1% of purchase value since 1978. If you have been in your house since 1977 it is 1% of the value in 77. If the house was 50,000. Your tax is 500. If you buy a 500,000 house now, your tax would be 5,000 per year.
Cities are allowed to raise the taxes a small amount over time. After 42 years most tax rates around the state are about 1.17% A small increase from 1% in 1978.
The democrats are constantly trying to get around prop 13, but they have been beaten back. The current attempt is to raise commercial property taxes. But one of the positives in CAL is the low rate of property taxes and if you stay in your home in the long term you’re getting a real break over other states and people who move around frequently.
The state also allows seniors to move within the same county and transfer their old tax to the new property (Prop 60). 7 counties allow you to transfer from other counties (prop 90).
To liberals, passing costs on to consumers is an outrage and must be clamped down on...hard.
Kimberly Clark has a 66 acre plant in Fullerton that has been in operation since 1956. A beautifully maintained facility judging from its grounds.
They are selling the property and shipping the jobs out of California. The risk of losing their Prop 13 protection is one of the deciding factors.
Prop 187 was scuttled by a Federal judge, Marianne Pfaelzer, with the collaboration of the GOP establishment.
Schwarzeneggar could have appealed her ruling but he never did because he was a loyal Bush toady. It can still be appealed if we ever get a Trump Republican for Governor
I believe davis had first shot at an appeal and mediated a settlement with illegals advocacy groups
Prop 187 Overturned
As a result of increased mobilization and electoral participation in immigrant communities, July 29, 1999 marked the date Governor Gray Davis, MALDEF, and other civil rights groups signed the mediated Proposition 187 agreement, effectively putting an end to the divisive measure. This was the first time that a California voter-approved measure was overturned by mediation.
Wilson was Governor when we passed Prop 187.
Marianne Pfaelzer sat on her decision until he was replaced by Davis. Davis of course never appealed.
Then came Schwarzeneggar, who was perfectly free to file the appeal. He never did, because the GOP establishment (including Hugh Hewitt) who backed him over Tom McClintock hated Prop 187.
There is no time limit on the right of appeal. Any California governor is free to file it.
There is no “mediated agreement”. There is only Pfaelzer’s unchallenged ruling, courtesy of Bush Republican treason.
so the source was incorrect there was no mediated settlement with the illegals
What is your source.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.