Prop. 15: Everything you need to know about California business tax overhaul
Here is a quick rundown of the proposition:
Since 1978, all property taxes in California have been levied under the system adopted by voters with Proposition 13. The value of a property is based on its most recent purchase price, even if it last changed hands decades earlier and similar properties nearby sold more recently and are subject to higher taxes. Proposition 13 limits the tax rate to 1% of the assessed value amount and that estimate can increase by no more than 2% a year.
The new ballot measure would keep all existing rules in place for residential properties. But many commercial and industrial properties would be reassessed, with updated values that better reflect current real estate market conditions — resulting in more taxes paid by their owners. Exemptions would be made for most business properties worth less than $3 million and land used for agriculture. Large corporations, likely to see substantially higher property tax payments, are perhaps the most obvious target of Proposition 15.
Opponents contend the measure’s impact will be far greater than advertised and insist that many of Proposition 15’s supporters are also on record as hoping to someday revisit current property tax limitations for homeowners.
Supporters argue the change would mostly affect large corporations, removing the low-tax protections provided by Proposition 13 in 1978 while shielding California’s entrepreneurs and farmers.
The state of the race
Polls have found Proposition 15 to be a tight race. A poll by UC Berkeley’s Institute of Governmental Studies last week found support for Proposition 15 at 49% of likely voters — as it was in September. The level of opposition, however, rose to 42%. Fewer than 1 in 10 voters in the poll, which was conducted between Oct. 16 and 21, were undecided. The Berkeley poll found evidence that a key accusation made by Proposition 15 opponents has gained traction with voters — namely, that the measure is a first step toward eventually rescinding Proposition 13’s homeowner property tax limits. The proposed constitutional amendment explicitly states it would not change residential property tax rules. But 56% of likely voters either somewhat or strongly agreed those changes could be on the horizon.
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