If enacted, the 2020 ballot initiative could raise over $11 billion in commercial property taxes in the state, by removing the existing cap for non-residential property holders and adopting a new tax formula that will significantly increase the amount retail and other businesses will owe.
This ballot initiative would upend Proposition 13, the residential and commercial property tax linkage that has been in effect since 1978. The measure proposes to tax “certain commercial and industrial real property based on fair-market value — rather than, as under current law, the purchase price with limited inflation.” Commercial property owners may face substantial increases for the foreseeable future.
In August 2019, proponents filed a new, revised measure in an attempt to address concerns for small business owners. Specifically, the new language expands the reassessment exemption to small business owners with property valued at $3 million or less, up from the previous $2 million threshold. Organizers say it provides a phase-in provision aimed at providing small business tenants with sufficient time to locate other rental options if they believe they will be affected by reassessment.
According to reports, SEIU, the Teachers Union and other backers will need to collect nearly 1 million signatures by May 1 in order for the new initiative to qualify for the November 2020 ballot. The cost to secure the needed signatures is estimated at $10 million. If they succeed, supporters will pull the earlier version of split roll. If they fail to garner enough signatures then the previous measure remains on the ballot.
What’s at stake:
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