A big battle over property taxes in California is shaping up for the 2020 ballot.
Supporters of a bid to increase taxes on commercial land announced Tuesday they’ve collected more than 860,000 signatures to force a vote on the issue in two years.
“This is a defining moment for California,” Fred Blackwell, CEO of the San Francisco Foundation, said in a statement. “Closing the commercial property tax loopholes is important to our state.”
Backers, including the California Federation of Teachers, the League of Women Voters and community organization California Calls held news conferences Tuesday in Los Angeles, Berkeley, Fresno, San Diego and San Bernardino to demonstrate support across the state for the idea. Of the signatures turned in to the Secretary of State’s office, 585,407 must be deemed valid for the measure to qualify for the November 2020 election.
The initiative would make dramatic changes to the tax system established four decades ago by Proposition 13, which capped how much property tax bills could increase every year. The proposed measure would boost property tax revenues from commercial and industrial properties by assessing them at their current market value. Property tax protections would remain unchanged for residential properties.
The changes could net $6 billion to $10 billion annually in new property tax revenue statewide, according to an estimate from the state’s nonpartisan Legislative Analyst’s Office. The analyst’s office also warned that the measure could have significant downsides for California’s economy by causing businesses to leave or opt against relocating to the state.
Business groups are girding for the fight over the tax hike, known as “split-roll” because it assesses residential properties different from commercial and industrial properties.
“California already has the worst climate for business and job creation in the country,” Rex Hime, president of the California Business Properties Assn., said in a statement. “A split-roll property tax will just increase pressure on many businesses that are already finding it hard to make ends meet.”