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.
from wiki you may not know but many cases are mediated rather than continued in court.
Governor Wilson appealed the ruling, which brought the case to the federal Ninth Circuit Court of Appeals. But in 1999, the newly elected Democratic Governor Gray Davis had the case brought before mediation.[30] His administration withdrew the appeal before the courts in July 1999, effectively killing the law.
[30]
Dave Lesher and Dan Morain (April 16, 1999). “Davis Asks Court to Mediate on Prop. 187”. Los Angeles Times. Retrieved April 9, 2009.
congressional research.com
CRS Report for Congress
California’s Proposition 187: A Brief Overview
Larry M. Eig
Legislative Attorney
American Law Division
Summary
On September 13, 1999, a U.S. district judge approved an agreement to end
litigation challenging California’s Proposition 187, a 1994 ballot initiative to deny illegal aliens state benefits and to require reporting of illegal alien applicants for benefits to federal immigration officials. This agreement effectively continues earlier court-imposed restraints on implementing Prop 187.
The court-ordered halt of Prop 187 finally became ripe for
appeal in March 1998 when the presiding judge issued a permanent injunction. However, new California Governor Gray Davis decided to seek a mediated end to the suit rather than to pursue an appeal. Subsequently, the parties to the suit (including the state) agreed to maintain the effects of the injunction, the presiding judge approved the agreement on September 13, 1999,
LAist.com
Jul. 29, 1999: Prop 187 is effectively overturned through federal mediation.
It just means that Davis agreed to abide by her ruling. He can’t obligate future governors. A judge can’t mediate away your right to appeal their decisions.
Schwarzeneggar went along with the program because he was a Bush Republican and they opposed Prop 187 right from the day that we put it on the ballot. Dubya even flew out here from Texas to side with the illegal aliens. Anyone who worked on 187 knew what a POS he was.
Most people want to be close to where they work. Get a home in the valley, it's a 100 mile (or more) commute to most jobs. If you're okay working as a lettuce picker, then you can live along I-5 near Bakersfield and be happy. There are a lot of unfilled jobs here in the SF Bay Area due to lack of housing. SAMTRANS has cut service here because they can't find enough drivers, and these are well-paid jobs. Rents are a minimum of $3000/month for a 1-bdrm apt, if you can find them. People don't like commuting over 100 miles each way, because the traffic crawls on most arteries into the Bay Area. Lack of space, long commutes, pick your poison. I can live anywhere, I'm retired. My oldest daughter moved with her family out of state because of the housing shortage, and lots of other young people are also leaving. In CA, the good jobs are in the cities along the coast.
As it was explained to me, the new housing is just built further and further out - where there are no “legacy” homeowners subsidized with low taxes by newcomer suckers buying in later; sounds like this is exactly why people are commuting 100 miles to their jobs. The “build upwards” you describe is in the cities; my friend was describing issues in the suburbs (growing outward, away from the most “heavily developed/highest penalties for newcomers” areas.
Does that make sense?
Um, yaz. I’m rather familiar with those numbers as I own properties in NorCal.
The point is that the rate may be low, but what’s the valuation?
That can only be increased by at most, 2%/yr as I noted.
That was the reason for Jarvis-Gann. Valuations were skyrocketing in the Los Angeles basin in 77 when they put together the proposition for the 78 ballot. Old people - like me - on fixed incomes were getting pushed out of their homes by rising valuations - not rates.
And it was happening to big rental owners like Jarvis, which is what the theft class is really green with rage over: it means big property owners kept their profit margins.
That’s what they will be screaming over the next 10 months going up to the election.
under Becerra’s attack on commercial properties, more businesses will leave the state
I am not addressing convenience, only lack of space. There is plenty of space in Cali and the Southwest. Desalinization could make a lot of the land useful for homes and businesses.
It was mediated. My only point. It was not a judges ruling. Do you not know how mediation works? The mediator facilitates and agreement and doesn’t rule or take sides. You keep riding a dead horse to make a point that is incorrect. The court appeal was dropped by the state as part of the mediation agreement.
An arbitrator issues a binding ruling, not a mediator.
The judge only approved the result of the mediation, not issuing a ruling.
Depends on the definition of 'suburb'. We live in San Mateo county, suburbs to the south of San Francisco city. For the longest time it was mostly residential neighborhoods consisting of mainly 1-story ranch homes with a sprinkling of 2-story homes. The Silicon Valley tech explosion changed everything. San Francisco always had residential towers, but is now experiencing runaway crowded conditions. The overflow of buyers seeking space moved their attention to surrounding suburbs, which are now up in arms over becoming mini-"San Franciscos". This is within perhaps 50 miles radius of SF. We were in a sleepy residential town. Now we're being overrun with construction cranes building skyscrapers among our homes, and the streets are having problems dealing with traffic jams. We have companies building here, each bringing in 1,000 employees, while there is not enough housing for them; so city councils changed zoning laws permitting high-rise residential towers where they used to only allow single-family dwellings. Homes that used to sell for $100,000 a few decades ago are now well over $1 million. In my town South San Francisco, which is well south of SF in another county, minimum price to buy a home is $1 million. My kids can't afford that. One daughter moved out of state where homes are $200,000 and nicer. Another daughter rents nearby for $3000/month. She lived for a while in Kansas and Texas where it was much cheaper, but moved back to SSF because she missed it (plus making three times the money here). If you lived here, you would see daily that there is a lack of space to build housing while there is an influx of people wanting the good paying jobs, and no one likes commuting due to congested freeways. There is space way out there where there are no jobs, so that is creating the pressure to build upwards in suburbs which are tapped out.
Someone please tell idiot Gov Newsom. He wants to spend billions to build a water tunnel to send water from Northern California to L.A. in the south. Even though an aqueduct already serves that purpose, stealing water from the north for L.A. swimming pools.
They are still a little bit afraid retiree homeowners might stage an angry anti-Democrat revolt. But in another few years, they won't care about that, either.
HALF of the $$$ from the tickets bought was supposed to go to the schools. The other half was paid out to the Lottery winners.
I know people have asked for all these years for an AUDIT of the Lottery $$$, but the Dems have pushed it off every time.
SOMEDAY, there will be an audit, and all hell will beak loose.
We have the same issue along the Hudson River coast here in NJ, caused by the same dynamic (which comes into play in Seattle and Portland as well): inability to grow in all directions due to water, and resulting upward growth. The growth described by my friend would be eastward (in the CA example); it can’t happen like that here in NJ (westward) because the land is much more limited, and fully developed already - suburbs stretched westwards towards the Delaware River until that critical point was reached where commuting was no longer viable, and the former “sleepy towns” quickly caught up with those to the east in terms of taxes. In fact, some of the areas furthest west in NJ gambled on a boom that never happened, and overbuilt; the intended residents either moved a little further into Pennsylvania, or left NJ altogether rather than deal with the high costs in the new areas.
Another key difference here in NJ is the access to good-paying jobs; the area was already losing many of them (see the high number of vacancies in the WTC on 9/11 - 20 years ago), and employers would rather hire white-collar Asian scabs than Americans. The dwindling/dying/fleeing American middle class in NJ is being replaced by a Latino permanent underclass and an Asian middle class; the county across the Hudson River from mid-town NYC (just north of me) recently added Korean to English and Spanish on all official business.
I don’t believe Amazon ever truly intended to open their “HQ2” in NYC simply because there aren’t 25,000 skilled professionals awaiting those jobs paying six figures; they’ve already been forced out to follow good jobs elsewhere (primarily in the southeast, where the employers went). At this point it is hard to attract new businesses because the taxes/business climate are so bad, and like many cities (though on a statewide scale), there is no longer a skilled workforce lying around idle waiting for work - it is an expensive area for those without work.
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