Several of my clients requested me to provide them with further information on the opposition to Proposition 15. Proposition 15, the “California Schools and Local Community Funding Act of 2020,” which is commonly referred to as the Split Roll Initiative, will be on the November 3, 2020 California ballot.
Proposition 15 would amend Proposition 13, as it relates to commercial, industrial and office properties. Pursuant to Proposition 13, the “base year value” or assessed value of real property is its current market value (i.e., the acquisition value or the purchase price) on the date of any change in ownership or if there is new construction.
California taxes real property at 1% of its assessed value. Unless there is a change in ownership or new construction, Proposition 13 limits annual increases in the assessed value by an inflation factor not to exceed 2%.
If approved by voters, Proposition 15 would “split” the tax roll. Proposition 15 subjects all California “commercial and industrial real property” to reassessment to their “full cash value,” as determined by the County Assessors, no less frequently than every three years. The reassessment would be phased-in over several years commencing with fiscal year 2022-23.
As to the current status of the opposition, Rex S. Hime, the President & CEO of California Business Properties Association and a principal of the No On Prop 15 campaign, noted “We are in the last stages of this expensive and hard-fought campaign.” Rex advises it is extremely important for those opposed to Proposition 15 to reach out to everyone on their email list and in their Rolodex and urge them to vote “NO” on Proposition 15.
The following are links to flyers and handouts to share with family, friends, neighbors, employees and business owners as to the negative consequences of Proposition 15.
“No on Proposition 15: Vast tax hike during a deep recession is a crazy idea.”
-The San Diego Union-Tribune Editorial, 9/17/20
“Prop 15, the largest property tax increase in state history, will devastate minority-owned small businesses and hurt thousands of workers who rely on these jobs to feed their families.”
-Julian Canete, President, California Hispanic Chambers of Commerce
“Not only does Prop 15 transfer our local property taxes to the state to redistribute to other counties for the first time in state history, but complex legislative formulas will decide which communities get the new money and which do not. It’s not fair and not democratic.”
-Melissa A. Washington, Founder of the Women Veterans Alliance
You should definitely vote NO on prop 15. Proposition 15 represents another threat to the already fragile commercial real estate market in California. Proposition 15 will increase the cost for consumers and further devastate California businesses. Proposition 15 will make California businesses less competitive and increase the exodus of businesses out of California. This will result in the loss of hundreds of thousands of jobs and increase the already high poverty rate in California.
For further information and to donate to the opposition, please visit www.NOonProp15.org
15 Reasons You Should Vote No on Proposition 15
California’s Split Roll Initiative – A Deep Dive
William B. Brinckloe, Jr. of TransActionLaw is a Martindale-Hubbell AV-Rated lawyer in Irvine, California. Bill practices in the areas of commercial real estate and business transactions. If you have any questions regarding Proposition 15 or require the services of an experienced California commercial real estate and business transactional attorney, please email Bill at wbb@TransActionLaw.com or call him at (949) 475-6993.