2020: Two Important CA Ballot initiatives
There is a “Proposition 13” on the March 2020 primary ballot that is causing some confusion. We have provided information below to clarify the situation.
Proposition 13 on the March 2020 was randomly assigned the ballot name & number “Prop. 13” and is actually a school bond initiative. C.A.R. will most likely support it. This school bond has nothing to do with Proposition 13 from 1978. Also, there is a proposed proposition for the November 2020 ballot that related to Proposition 13 from 1978 and will amend it. It will be called the “split-roll initiative” (it does not have a number assigned to it yet). C.A.R’s Split Roll Task force will meet in Sacramento in May 2020 to develop a position.
Below is important information that will help distinguish between the ballot initiatives.
Prop 13 (2020)
School and College Facilities Bond (March 2020)
California provides public education to 92 million students. The 15$ billion education bond from Prop 13 (2020) is a bond for school modernization and construction projects. This bond will help address critical maintenance, affordable student housing, and improve safety conditions and health conditions (like lead contamination in water).
YES on PROP 13: supports to allow the $15 billion in bonds for school.
The money would be divided by the following, $9 billion for preschool & K-12 schools, $4 billion for universities, $2 billion for community colleges.
NO on PROP 13: opposes the authorization of $15 billion in bonds for school and college facilities.
The last education bond that was issued in CA was in 2016 for $9 billion, however there is still an urgent need in California to modernize its school’s facilities for safety precautions. Prop 13 bond would work differently than the previous 2016 bond. This 2020 bond would focus solely on modernization than new construction and prioritize health and safety issues.
C.A.R has historically supported education bonds similar to Prop 13.
Prop 13 (1978)
California Proposition 13, The Tax Limitations Initiative
During the 1970’s people were losing their homes due to uncontrolled tax increases. On June 6, 1978, Prop 13 was passed which helped reduce property taxes on homes, businesses and farms by 57%. This prop demanded that properties would not be taxed at more than 1% of their full cash value shown (Prop 13 froze property taxes at the 1976 value level). This also limits annual tax increases based on the rate of inflation or 2% (depending on which one is lower).
● Prop 13 of 1978 Prohibits CA state legislature from implementing new taxes on the value or sale of properties
● ⅔ vote of CA state legislature is needed in order to increase non-property taxes
● This prop allowed property owners to be able to estimate future property taxes as long as owners owned property, market value reassessments may only occur with change of ownership in property. Property tax increases on any given property were limited to no more than 2% per year as long as the property was not sold. Once sold, the property was reassessed at 1% of the sale price, and the 2% yearly cap became applicable to future years.
Split Roll Proposition (Reform of Prop 13 1978)
California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative
NOT ON BALLOT (still in signature gathering stage).
The State legislature is trying to propose the “Split Roll Prop” on the ballot to “close corporate loopholes,” and crackdown on companies like Chevron, who are pocketing over 100 millon dollars every year, due to the 1970 property taxes they pay. This initiative would most likely raise taxes for large commercial and industrial properties while leaving residential properties and homeowners under 1978 Prop 13 protections. The goal is to maintain prop 13’s limits for residential, small business and agricultural property while getting rid of the protections for business industrial buildings, and commercial land (worth more than 3 million).
● With the “Split Roll Prop,” commercial land would be based on market value and NOT on the 1970 property taxes. Proponents claim it would generate an estimated 11 billion in annual tax revenue. 40% of this money would go to public schools and 60% would go to local governments to fund public services and infraestructures
In contrast, the potential amendment of Prop 13 “Split Roll” of 1978 in 2020 can put all taxpayers at risk of higher taxes and an increase in the debt of the state. Small businesses that rent properties (like mom and pops) can potentially be forced to pay higher rents, raising the prices on goods and services for the public.
● C.A.R’s Split Roll Task Force will meet in Sacramento in May to develop recommendations
IF ENOUGH SIGNATURES ARE OBTAINED (this is how the Split Roll prop would go):
YES on PROP 13: supports an amendment that will require commercial and industrial properties, except those zoned as commercial agriculture to be TAXED based on MARKET VALUE, rather than purchase price.
NO on PROP 13: opposes this amendment and requires to continue the tax commercial and industrial properties based on the purchase price of property with annual tax increases based on the rate of inflation or 2% (depending on which one is lower)
