Backers of the “split roll” property tax measure on Thursday submitted almost 2 million signatures — nearly twice the number required — to qualify a revised version of the initiative for the November ballot.
Schools and Community First, a coalition of education, labor and philanthropic organizations, announced submitting 1.74 million signatures, far above the 997,139 signatures needed by mid-April to qualify for the November ballot. The group aims to alter the state’s Proposition 13, which governs how properties in the state are taxed, by creating a so-called “split roll.”
If approved, the measure would essentially create one set of rules for assessing and taxing commercial and industrial properties and leave other properties, including residential, to be taxed as they have been for the past four decades. The current measure that will likely appear on the November ballot replaces a previous version that had qualified for the ballot in Oct. 2018.
Prop. 13, passed in 1978, essentially freezes property taxes in place until an owner sells their building or land, or finishes a major construction project on the site. Short of those two exceptions, the current system allows for a maximum 2 percent property tax increase annually — a rate far lower than the rate property tends to appreciate throughout Silicon Valley.
The measure up for a vote in November would keep residential property taxes as they currently are, but tax commercial and industrial properties based on the market value of that property.
A report released in February from University of Southern California researchers breaks down estimated local benefits of an upcoming ballot measure to reform Prop. 13, including about $12 billion that could be generated from added commercial property taxes throughout the Golden State.
Of that, $1.2 billion would be generated in Santa Clara County, but that assumes county assessors can handle the momentous task of implementing the changes. Santa Clara County’s assessor has said the measure isn’t possible to implement, though advocates of change insist it can be done.
The biggest changes between the measure approved for the ballot in 2018 and the new version likely to end up on the ballot include:
- Properties worth $3 million or less wouldn’t get reassessed, up from $2 million in the previous measure.
- Rather than taking effect in 2020, the measure would be effective in 2022
- The new measure is more specific about how the money would be allocated within the school system
- The first $500,000 worth of “business personal property,” or company equipment inside of a building, would not be taxed
Advocates say the measure would generate needed funds for local schools and government agencies across the state at a critical moment when it’s most needed.
“At the end of the day what is just there are a lot of folks on the frontline and a lot of folks are stretched thin,” said Alex Stack, spokesperson for the Schools and Community First coalition. “Education and public health professionals and local officials are trying to do more with less right now and they need the resources to do their jobs and we all have to step up right now.”
Opponents, however, say the measure will “destroy long-standing Proposition 13 protections for businesses and farmers, while raising the cost of living for every Californian,” according to a news release from Californians to Save Prop. 13 and Stop Higher Property Taxes.
The group is backed primarily by business associations as well as the California Taxpayers Association. Howard Jarvis Taxpayers Association has also been vocally against the split roll measure.
“It’s clear that the public employee unions behind the largest property tax increase in state history are willing to spend and do whatever it takes to raise the cost of living for working families,” Rob Lapsley, president of the California Business Roundtable and co-chair of Californians to Save Prop. 13, said in a statement Thursday.
Meanwhile, Santa Clara County Assessor Larry Stone, the elected official who leads the agency that would implement the split roll, is at odds with both advocates and opponents.
The veteran politician supports increasing taxes for commercial and industrial property owners. But he insists the measure would be “impossible” to implement because of nuances in that county assessors couldn’t independently track, like how many employees a company has statewide.
“Commercial properties got a better deal (in Proposition 13) and they don’t pay their fair share,” he said. “Having said that, this ballot measure will not solve this problem because it is so ambiguous, it is impossible for assessors to implement — not difficult, but impossible.”
Stone also said the timeframe in the measure is too short for counties to hire and train new employees in time to meet the deadlines. He worries about how agencies would wade through what he expects will be a record number of appeals as new tax assessments go out.
Stack and others pushing to reform Prop. 13 have pushed back on those concerns, saying the new version of the measure offers flexibility for county assessors across the state to reassess properties over time. Stone, however, remains unmoved.
Whether the measure becomes law is now up to voters, who will decide on Nov. 3.