A closely watched ballot measure proposal, which would amend the
historic Proposition 13, submitted 1.7 million signatures last
week, far exceeding the 997,139 verified signatures needed to
qualify for the November ballot and likely assuring its placement
on the November statewide ballot. The effort is being run by the
Schools & Communities First campaign, which has already qualified
a similar measure to be placed on the ballot, but is trying to
replace that one with a modified version to exempt more small
businesses from the tax increase.
Proposition 13, first passed in 1978, generally limits annual
assessment increases to no more than 2% each year on homes,
businesses, and farmland, unless the property changes hands, at
which point they are reassessed at sale price.
The proposed amendment would, beginning in 2022-23, require
California to tax most commercial and industrial property based
on the fair market value, raising taxes on those properties by
between $8 billion $12 billion per year statewide. The amendment
would not apply to residential property, farmland, and property
owned or occupied by small businesses. The measure also
exempts the first $500,000 of business personal property taxes
from taxation.
The increased property tax revenue would be distributed to
counties, schools, cities and special districts, in the same
proportion as under current law. Before that, though, the
increased revenue would be used to cover the significantly
increased costs of county assessors, as well as relatively minor
losses to the state General Fund resulting from decreased
corporate and personal income taxes.
