A measure to revise Proposition 13 has qualified for the November 2020 ballot. This proposal would require that commercial and industrial properties be assessed at full market value and reassessed every three years. That’s a big change from the current law, which allows them to be reassessed only upon a change of ownership.
Changing that system could produce as much as an additional $12 billion in tax revenues. Los Angeles County would be the big winner. On a per capita basis this would be less than in San Francisco, Napa, Santa Clara and Inyo with high commercial property values and relatively small populations,
The California Assessors Association estimates the cost of the transition running as much as $470 million a year for up to 10 years ($4.7 billion).
This should be viewed as the start of a progressive tax-and-spend attack on Proposition 13 which was passed in 1978 and stabilized all property taxes in California. In addition to limiting the tax rate on existing properties a limit was set on annual tax increases on all properties of 2 percent per year and has saved taxpayers and consumers billions of dollars in taxes annually.
Implementing a split tax roll for commercial and industrial properties should be viewed as only a first step towards the goal many tax spenders desire. Leading the way, the Los Angeles Unified School District has advocated repeal of Proposition 13 in order to provide more funding for schools. Since school facility funding is provided by the state this measure can not and will not directly provide additional school funding..
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A simple understanding of economic principles is all that is required to realize that commercial and industrial properties are owned by entities that have planned to make a profit on their investments. They can not print their own currencies. Therefore, when the cost of doing business increases they will have no alternative other than to increase the costs of the services and products which they provide.
This fact is why increasing the minimum wage generally results in fewer people having full time employment. Increasing the property taxes on commercial and industrial properties will result in increased consumer costs for all of the consumers and residents of the state who purchase the products or services they provide.
Jack Gray, Director
Napa County Taxpayers Association