Written by Michael Palomba
The San Diego County Board of Supervisors are meeting today to discuss several significant issues. One of the most important topics of today’s meeting is the opposition to Proposition 15.
Prop 15, also known as the “Schools and Communities First Initiative,” may have a nice sounding name, but after looking past that, one will see that it’s nothing more than a scheme for the government to bring in more property tax revenue.
What Prop 15 aims to do is revoke Proposition 13 protections for commercial and industrial properties across the state. Proposition 13, passed in 1978, protected property owners from having their property tax rates skyrocket as property values increased. It created a maximum property tax rate of one percent and allowed for an annual increase of up to two percent.
When a property changes ownership, the taxes are reassessed using the current market value of the property. This not only protects current property owners from unreasonable tax increases, but also provides new property owners with a transparent and predictable tax that they can afford. Prop 13 ended the yearly guessing game of whether or not an individual could afford their property taxes.
Under Prop 15, all of those protections would be removed and commercial properties would be subject to an infinite increase in property taxes depending on the property’s current market value. Far-left supporters of the measure claim that the change would bring in an additional $6-12 billion dollars annually, though there is a high amount of volatility in their estimate.
In addition to creating mass confusion regarding the amount of property taxes one may owe each year, Prop 15 would contribute to the mass exodus of businesses the state has been seeing for years now. A recent study mentioned by Southstar Communities estimates that a whopping 1,800 “disinvestment events” occurred in California in 2016 alone, which was the highest number since the 2008 financial crisis. Some of the companies that have departed from California over the years include Toyota, Charles Schwab, Jamba Juice, Carl’s Jr., Nissan, Jacobs Engineering, and countless others.
This should come as no surprise to most. After all, California ranks as one of the most expensive states in the country, both for individuals and businesses. As Democrats continue to implement business-harming policies, the number of companies fleeing only increases.
With COVID-19 shutdowns bringing the economy to its knees and claiming thousands of businesses in the process, the last thing the state needs is new legislation that will further crush businesses. California already has the highest income tax rate, gas tax, and sales tax in the country, not to mention that we are also near the top for per capita property tax revenue. The last thing this state needs is more tax revenue from hard-working individuals already struggling to make a living.
If California wants to turn things around, state lawmakers need to focus on cutting spending and taxes. That is the only thing that will stop the mass exodus of business—and people—which will create more revenue as a result.