One of the major ballot initiatives facing voters in November will be the Schools and Communities First initiative.

It proposes to change how property taxes are assessed for commercial properties, the first change since Proposition 13 passed in 1978. Currently, a property's value is only reassessed when it is sold and when there's new construction on an existing site. After it changes hands, the increase in the assessed value is capped at 2% per year.

Instead, the initiative would assess commercial and industrial property at market value, regardless of the last date of sale. Residential properties and commercial agriculture properties would continue under the current assessment system.

Last week, the Menlo Park Housing Commission voted 6-1 to recommend that the City Council direct staff to analyze the initiative to see how it might impact housing development, the city's general fund and small businesses, according to Rhonda Coffman, deputy community development director in Menlo Park.

The initiative could generate more tax revenue per capita in San Mateo County than any other county in the state, according to a study by the USC Dornsife Program for Environmental and Regional Equity.

The study was published in February; since then, a revised version of what is now Proposition 15 qualified for the ballot, which stipulates that the switch to using market rate assessments wouldn't take effect until the 2022-23 fiscal year, and until 2025-26 for some properties like retail centers occupied by a majority of small businesses.

Despite the study's dated assumption that the initiative would take effect by the 2021-22 fiscal year, it singles out San Mateo County as the county that would likely generate the greatest increase in additional property tax revenue per capita in the state. If the initiative were to take effect in 2021-22, the county would likely generate around $1,008 per capita in additional property tax revenue, and a total of between $709.4 million and $833.7 million, the study's authors report.

Santa Clara County is projected to generate about $637 per capita during the same fiscal year, at a total of between $1.1 billion and $1.3 billion, they reported.

It also estimated that the proposed reform could generate between $10.3 billion to $12.6 billion in additional tax revenues statewide in the same fiscal year.

While the USC study assumes some slowdown in market growth and assessed values, and its findings seem "generally accurate," it was published before the pandemic, county Assessor Mark Church said in an email. The coronavirus has accelerated the trends of teleworking, business travel and retail, and it's not clear how those impacts will affect property valuations in the future, he said.

A bigger question, he said, is how those funds will be distributed. Just because they might be generated in San Mateo County doesn't mean they will be spent there. The state's formulas for distributing funds dictate that the largest share of property tax revenue goes to Sacramento and is spent according to complex state distribution formulas, Church said.

Counties and commercial properties would be disparately impacted by the initiative, the study reports.

While San Mateo County stands to earn $1,008 per resident in the 2021-22 fiscal year, the rural Tuolumne County stands to generate only about $29 per capita.

The initiative would also impact higher-valued properties more than lower-valued ones, the report said. From commercial properties valued at over $5 million, which represent only about 6% of all commercial properties, the state is estimated to generate about 78% of the revenue gains. Only 1% of the estimated increase in statewide revenue would come from the 61% of commercial properties valued at less than $250,000, according to the report.

But implementing the initiative would also create new costs, assessors say. For decades, California, unlike other states, has not required assessors to regularly evaluate the market value of all commercial properties, and creating the capacity to do so would require staffing up and expanding training.

An independent review by Capitol Matrix Consultants found that, if the initiative passes, it could cost California counties an additional $380 million to $470 million annually during the first five to 10 years and require the creation of 900 new positions statewide.

Church said that his office is still analyzing the administrative burdens of the initiative, since it would create additional work for the assessor's office, roughly quadrupling the number of properties it currently assesses per year to about 4,600 annually from roughly 1,100 per year. This would require the county to hire more senior appraisers and staff members, and senior appraisers are hard to find in the current job market, he said.

For Santa Clara County, that number would increase about twelvefold, according to a white paper report by the California Assessors' Association.

Among the top donors to the committee supporting the November proposition are the California Teachers Association, the SEIU California State Council and the Chan Zuckerberg Initiative's advocacy arm.

Kate Bradshaw writes for The Almanac, the sister publication of PaloAltoOnline.com.