The ads have already started airing on the radio and television and there is sure to be a mail blitz. The message is that certain groups want to raise your taxes by revising Proposition 13. The big question is who is the “your” in raising your taxes? Is it you the homeowner? No. It just applies to large corporations and commercial properties. It’s called the split roll. Homeowners would continue with the same protections as originally prescribed in Proposition 13. Under the initiative, large corporations and business entities would be taxed at market value. Homeowners’ property taxes would be based on the sale value as in the original proposition. So if you have lived in your house a long time, your property taxes will be very low compared to someone who has just bought a house.
The irony is that the spin to get Proposition 13 passed in 1978 used by the Howard Jarvis apartment owners was that it would protect people — especially seniors — from being priced out of their homes by high property taxes. Seniors and other longtime homeowners did benefit and still do but the major beneficiaries continue to be corporations and large businesses and, of course, large apartment complexes. Schools and local governments suffered a big hit. The situation was so bad for schools that the state had to take over most of the funding for those, the majority of school districts in the state, which could not raise enough property taxes to support educating their students. It was a severe loss to local control.
The cities were able to make up some of what they lost through fees and sales taxes. Suddenly, having a big sales tax business such as an automobile dealership or a Costco became a huge advantage. It also affected development. Housing required more services compared to offices. And the housing stock froze as seniors, often just one left in a good-sized home, decided it was cheaper to stay put than to downsize. All of this contributed to the housing shortages we have now, especially the shortage of affordable rental housing. The Howard Jarvis people made lots of money at a great cost to so many others.
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There have been several attempts at a split roll. The late assemblyman Lou Papan hoped to pass one. Last year, a group including the League of Women Voters tried to get something on the ballot. Even though it qualified, supporters decided to make a few changes to protect small businesses. A revised split roll initiative will appear on the 2020 ballot if it receives enough signatures. Meanwhile, a well-funded and organized campaign is trying to ensure this doesn’t happen.
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The measure passed in 1978 requires the taxable value of residential, commercial and industrial properties to be based on 1 percent of the property’s purchase price, with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower. According to the state Legislative Analyst’s Office, market values in California tend to increase faster than 2 percent per year, meaning the taxable value of commercial and industrial properties is often lower than the market value.
The new initiative would exempt for industrial and commercial properties: 1). The first $500,000 of a business’ personal property; 2). Business with 50 or fewer full-time employees; and 3). Those valued at less than $2 million (adjusted for inflation beginning in 2023).
The increases in property taxes would go to schools, community colleges and local governments. It’s time to revisit Proposition 13.
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You don’t have to travel to New England for fall colors. We have a good sampling right here. My favorite is Saratoga Drive (one of the newest streets in town) between the county fairgrounds and Fiesta Gardens.
Sue Lempert is the former mayor of San Mateo. Her column runs every Monday. She can be reached at sue@smdailyjournal.com.
How about including inherited property tax on rental property? Many second- and third-generations have inherited rental properties from their parents and grandparents, and have been able to keep the original base property tax.
Forecasts by the Trump administration and the Congressional Budget Office project that the deficit will top $1 trillion in the current budget year. And the CBO estimates that the deficit will stay above $1 trillion over the next decade.
if they raise taxes on commercial properties they should lower taxes in other areas. My problem is with giving the government more money than we already do. It would only go to the retirement benefits of retired public employees that we have no way to pay for the promises made.
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(3) comments
How about including inherited property tax on rental property? Many second- and third-generations have inherited rental properties from their parents and grandparents, and have been able to keep the original base property tax.
Forecasts by the Trump administration and the Congressional Budget Office project that the deficit will top $1 trillion in the current budget year. And the CBO estimates that the deficit will stay above $1 trillion over the next decade.
if they raise taxes on commercial properties they should lower taxes in other areas. My problem is with giving the government more money than we already do. It would only go to the retirement benefits of retired public employees that we have no way to pay for the promises made.
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Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
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