The property-tax initiative, dubbed the “Lifting Children and Families Out of Poverty Act,” would create a property tax surcharge on all commercial and residential properties in the state assessed at over $3 million.
While targeted at the wealthy, the financial burden would ultimately reach small business owners and their employees.
“In California, if you have a small restaurant, you’re probably renting from somebody who has a property of $3 million or more,” Allan Zaremberg of the California Chamber of Commerce says in this Capital Public Radio piece. “So you’re gonna pay more in rent. And you just can’t afford that.”
The measure already has over 25 percent of the 585,407 signatures needed to qualify for the November ballot. The deadline to submit signatures is March 21.
While the signature-gathering effort continues, opposition is mountaing through Californians to Stop Higher Property Taxes, a coalition that includes CAA.
On Thursday, another organization, the Valley Industry & Commerce Association, publicly backed CAA and the coalition’s work to defeat the ballot measure.
“California voters have to let the Legislature know we’re not going to give them a blank check from property taxes — and we need more responsible spending,” the association’s president, Stuart Waldman, said in a statement.
The measure’s primary backer is Conway Collis, a former member of the California State Board of Equalization. In addition to Collis, much of the funding is coming from anti-poverty groups, including the Los Angeles-based Daughters of Charity Foundation.
The surcharge would raise between $6 billion and $7 billion in 2017-18, with revenue growing in future years, to fund various state poverty reduction programs, according to this report by the nonpartisan Legislative Analyst’s Office.
The proposal, applied on a sliding scale, would add a:
- 0.3 percent tax on property assessed between $3 million and $5 million.
- 0.6 percent on property between $5 million and $10 million.
- 0.8 percent on property in excess of $10 million.
These increases attack the very spirit of Prop. 13, which voters approved by a 65 percent vote in 1978. The proposition sets strict limits on property taxes, basing them on 1 percent of a property’s value at the time of sale and capping increases in assessed value at 2 percent annually. This shields the owner from taxes tied to huge spikes in market value.
“This would reinstate a system where increases in home value would be penalized with much higher taxes as occurred prior to Proposition 13,” says Jon Coupal, president of the Howard Jarvis Taxpayers Association, in this recent op-ed. “Taxpayers know from hard experience that, for tax raisers, more is never enough. Once the door has been opened, less valuable property will be the next target.”
CAA is working with other organizations within the real estate and business community to combat the proposal and continues to monitor the petition’s progress. Moreover, the Association is working with partner organizations to develop a plan to defeat the measure should it qualify.