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Central Valley leaders are taking sides on Proposition 15, the initiative to roll back some of the property tax protections provided by the famous Prop. 13 of 1978.

Supporters say Prop. 15 will close a loophole in the tax system and help schools and communities. Opponents say it is a Sacramento money grab.

“We know that our schools have been devastated now, especially with the pandemic,” Yes on 15 campaign supporter and legendary labor rights activist Dolores Huerta said in a Zoom teleconference with media.

“We need that funding. We want it to come from the people that have the wherewithal — that they have the money to pay their taxes. And now it’s time to join with the rest of us.”

Prop. 13, the revolutionary anti-tax measure, capped the increase on property taxes to 1% a year, among other things.

Unlike Prop. 13, This Calls for Split Roll Tax

If voters approve the initiative on Nov. 3, protections on the tax hikes on business properties will be removed. Home properties will remain protected. The system is known as “split roll.”

Commercial properties would be taxed based on market value. A state analysis estimates it would raise up to $12 billion in revenue. Supporters say it would mean $145 million for the Central Valley.

The state would receive the first cut of revenues generated to “supplement decreases in revenue from the state’s personal income tax and corporation tax due to increased tax deductions,” according to the attorney general’s analysis.

The remainder would be split, with 60% funding local governments and 40% to schools.

Supporters: Justice and Equity

“We need that funding. We want it to come from the people that have the wherewithal — that they have the money to pay their taxes. And now it’s time to join with the rest of us.”Yes on 15’s Dolores Huerta

Three local school board members, Veva Islas with Fresno Unified, Daren Miller with the Fresno County Board of Education, and Deep Singh with Central Unified all made similar arguments — Prop. 15 will help fund schools and the community.

“This would allow reinvestments to low-income communities and communities of color,” Islas said. “We have had too much disadvantage.”

Islas said Prop. 15 would alleviate the “burden” that communities have seen from COVID-19, racial injustice, and wildfires.

Proposition 15 supporters say the added funding from commercial property taxes will alleviate the burden on communities created by COVID-19, wildfires, and economic inequality. (The Salinas Californian/David Rodriguez)

Prop. 15 Will Hurt Consumers, Olivier Says

Clint Olivier, the former Fresno city councilman now executive director of the BizFed Central Valley, says the proposition’s passage would hurt consumers.

“The people who are being taxed do not just shrug it off and say, oh well, we’re being taxed more. They have to raise prices,” Olivier said. “In this case, it will be the leases for their (business) tenants who will consequently not eat the cost of the new taxes, but will pass those costs on to their customers.”

Olivier said the proposition was written pre-COVID, when California’s economy was zooming. But, with the pandemic and its economic unknowns, now is the wrong time for a tax, he said.

Miller says it is fair to propose a new tax now.

“(Corporations) are utilizing our equity from our educational systems for the students to come out and work for them. They’re using our roads. They’re using our police and safety services. We’re just asking them to pay their fair share at the same time that we do,” Miller said.

Olivier is skeptical about the government’s ability to wisely use tax revenues: “They always want more.”

Disagreement on Effect on Ag Industry

Portrait of Fresno County Farm Bureau CEO Ryan Jacobsen

“The proponents of the measure are being very misleading. It makes it look like ag’s not affected. But we are dramatically affected with the proposal.”Ryan Jacobsen, CEO Fresno County Farm Bureau

Huerta emphasized that Prop. 15 would exempt commercial agriculture property. But several of the state’s farm bureaus have publicly opposed the measure.

“I’m assuming that some of the agricultural organizations that are against Proposition 15 were also against … the right to organize, they were against unemployment insurance. They were against the disability insurance for farmworkers. They were against laws for child labor. And, so I don’t know what their reasoning is. I would have to speak to them individually. But unfortunately, they’re often on the wrong side of progress,” Huerta said.

Fresno County Farm Bureau CEO Ryan Jacobsen disagreed on how the revisions would affect farming. He says “anything beyond the dirt” would be subject to a tax increase including barns, dairies, wineries, processing plants, vineyards, and orchards.

The proponents of the measure are being very misleading. It makes it look like ag’s not affected. But we are dramatically affected with the proposal,” Jacobsen said.

Jacobsen is also concerned Prop. 15 might incentivize local governments to rezone ag land into commercial or industrial spaces.

Photo of juicy oranges on a tree against a blue sky

Proposition 15 opponents say that it will burden growers with higher taxes and could lead to ag land being rezoned for intensive commercial uses. (Shutterstock)

Ballot Title Battle

There is controversy over Prop. 15’s ballot title: “Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.”

The No on 15 campaign sued state Attorney General Xavier Becerra — who writes the ballot titles — saying what will appear in front of voters is unfair.

The opponents did not prevail, but the case is under appeal.

“They are fiddling with the English language to make this appear to voters as a mechanism to better fund schools. It’s always about the children. It’s always about the kids. But the reality is, it has nothing to do with that. This is a money grab. By the elites in Sacramento,” Olivier said.

6 Responses

  1. Paul Dictos, CPA

    The California Assessors Association (CAA) finds the Split-Roll measure seriously flawed. It will
    create chaos for Assessors and taxpayers. It will impede the California property tax system, and
    the ability to predict revenue for the multi-year teacher contracts and school budgets will also
    be thrown into turmoil.
    Additionally, it will remove Prop 13’s protections for California farmers, triggering annual
    reassessments at market value for agriculture-related fixtures, irrigation systems and
    improvements, including barns, dairies, processing plants, wineries, mature fruit, nut trees, and
    vineyards, once they reach maturity. Agriculture is a $50 billion industry. It is the lifeblood of
    California, providing more than one-third of the country’s vegetables and two thirds of its fruits
    and nuts. But when family farmers are faced with structural uncertainty under a clouded
    political environment, they may be forced to sell their property to real estate developers. Many
    fear that Prop 15 will create a major fiscal incentive to local government to rezone property
    away from agricultural use in order to take advantage of the higher taxes and satisfy
    Californians’ insatiable appetite for more taxes.

    Reply
  2. Mike Brown

    The day Sacramento shows me that our tax dollars actually go to where “they SAY it goes” is the day I’ll actually vote to increase the taxes we pay. It’s like giving money to the people standing on the corner saying, “I’m hungry”. Then taking the money and buying cigarettes or drugs. Technically their not lying, but the money never goes for the intended purpose.

    Reply
  3. Gene Roza

    Seems some of the so called professional are not reading the entire Prop 15; first of all it does not touch any existing old prop 13 residential properties, owner occupied or rentals; just remember large corporations such as Disney, Wells Fargo, AT&T, etc; have been getting away with miss using the old prop 13 and not paying their fair of taxes which in turn has caused almost every school district in California to have to beg, borrow and ask for school bonds to keep their districts afloat. Although Ryan Jacobsen has legit concerns for small farmers ; it does not touch any farmland what it does to is to make the Big Ag Corporations which own other commercial buildings start to pay their fair share on the commercial buildings only, not the farm land and frankly I believe they should have included corporate Ag Land exceeding 1,000 acres. Don’t worry Disney is not going broke and as far as raising prices on the consumer because they have to pay their fair share of taxes; have you checked what it costs to take a family to Disneyland and what they pay their CEO???

    Reply

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