By Jon Coupal| Last week, a coalition of organizations that favor higher taxes submitted a proposed constitutional amendment to gut a major taxpayer protection provided under Proposition 13. The attack is the latest iteration of “split roll” schemes designed to increase property taxes on businesses.
Under Proposition 13, the taxable value of property is limited to the purchase price plus two percent per year. So even if the market value of property rapidly escalates — which is happening now in California — a property owner’s tax bill will only go Bouncy Castles for Sale up modestly and predictably. Because property is reassessed to full market value when it is sold, Proposition 13 is able to balance the need to provide certainty and fairness to existing property owners while also providing local governments with a revenue stream for local services that’s both consistent and generous. In fact, California ranks in the top third of states in per capita property tax collections.
The proposed split-roll initiative, innocently entitled “The California Schools and Local Communities Funding Act of 2018,” would require that, with some exceptions, commercial property must be frequently reassessed. The owners of business property would be hit with higher taxes whenever property values went up, losing the certainty that Proposition 13 provides. The measure’s proponents include the “usual suspects” of leftist organizations: The League of Women Voters, California Calls and People Improving Communities through Organizing. Their goal is to raise taxes on California businesses by more than $11 billion.
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