California Apartment Association

By Mike Nemeth

The California Apartment Association this week vowed to continue its fight against a split-roll tax bill that would allow school districts to impose different parcel tax rates on different types of property.

SB 1021 by Sen. Lois Wolk, D-Davis, passed the Senate on Monday, May 5, by a 21-15 margin and now heads to the Assembly.

Under Wolk’s bill, a school district could base tax assessments on characteristics such as parcel size, the size of improvements to the parcel and use of the land.

CAA joins a coalition comprising dozens of business groups opposed to this legislation.

Similar to last year’s AB 59 by Assemblyman Rob Bonta, SB 1021 would overturn a recent court decision prohibiting school districts from taxing one type of parcel differently than another. Under current law, parcel taxes must apply uniformally, regardless of property type.

For example, under current law, both a 10-unit apartment building and an auto parts store next door could be charged the same parcel tax amount – say $100.

With SB 1021, however, a school district could add new sets of charges based on parcel use. Conceivably, the apartment building could be subject to an additional $500 in parcel taxes per unit.

This hypothetical scenario could become reality if SB 1021 becomes law.

“SB 1021 (Wolk), a majority-vote bill, would pave the way for major tax increases on California business property in the form of school parcel taxes,” Gina Rodriquez, vice president of state tax policy at the California Taxpayers Association, wrote in an email Monday, calling SB 1021 a “significant tax threat to all California property owners.”

In an April letter to members of the Senate, the coalition laid out its objections to the proposal.

“Under SB 1021, school districts would be able to split parcel taxes based on the property’s classification. This would further complicate the parcel tax regime by allowing a free-for-all system, with no limits on what rates school districts could levy,” the letter says.

“The Legislature should equalize parcel tax rates by continuing to require uniformity for parcel taxes imposed by school districts, and by adopting a uniform rate structure for all types of parcel taxes.”