Ballot Measure to Amend Prop 13 Submits Signatures
April 9, 2020
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.
The Legislative Analyst’s Office has prepared an analysis and fiscal impact estimate for the measure. The Attorney General’s office has the full text and the title and summary of the proposed initiative.