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Guest Opinion: Dare to clean up part of Prop. 13? Vote 'yes' on Prop. 15

In 1978 Palo Altans voted against "The Peoples Amendment to Control Taxation" aka Proposition 13. This historic constitutional amendment was placed on the ballot during a time of soaring real estate prices and out of control property tax assessments ranging between 2.5% and 3.5%. Proposition 13 pinned all property tax assessments at 1% of existing value or purchase price when property sold. This created a new base valuation methodology.

Nancy Shepherd is president of the League of Women Voters Palo Alto, former mayor of the city of Palo Alto and advisory board member for Evolve, a coalition partner of Prop. 15. Courtesy Nancy Shepherd.

The initiative was targeted at helping senior citizens remain in their homes and governments to control public spending. Yet, it was unpopular with Palo Alto voters, who worried about funding for schools and public services. Sure enough, it dropped revenue by more than half.

Times have changed, and today Prop. 13 homeowner protections are popular, even in Palo Alto.

Existing inequalities were strengthened and expanded by Prop. 13. For example, I pay about one quarter in property taxes than my next-door neighbor. Our house is assessed at about $500,000 because our base value began in 1984. Our neighbors, who have school-age children, purchased their home 10 years ago for about $2 million.

Inequities between commercial property base valuations are more extreme, and costing California public services about $12 billion year after year.

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Prop. 13 protects both residential and commercial property equally. Yet, unlike people, publicly held corporate entities, like multinational corporations, live forever — shareholders change, but property ownership does not, which means that base valuation from 1978 continues indefinitely. Today residential property funds 72% of our public services. When voters enacted Prop. 13, property tax revenue was split equally between commercial and resident parcels.

Based on the Santa Clara County Assessor's office annual report, 15% of commercial properties maintain pre-Prop. 13 base valuations, and only 58% have current assessment.

Proposition 15, which is on the November ballot, will correct this loophole by changing the valuation methodology for commercial and industrial properties every few years to market rate. This will add a steady stream of revenue to local communities and schools.

There will be no change to residential property protections, including corporately held residential rental complexes.

The Schools and Communities First Initiative will raise an estimated $12 billion across the state once deployed. In fact, research identifies that 10% of California commercial property will raise about 92% of the new revenue. When fully implemented, an estimated $1 billion of new revenue will flow to our county.

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These new revenues are split between schools and communities; 60% will go to municipalities, special districts, and the county. The city of Palo Alto will receive an estimated $22 million annually, the Midpeninsula Regional Open Space District about $9 million.

I was on Palo Alto City Council during the Great Recession, and staffing basic community services like fire and police was a challenge. Since the city's daily population doubles as employees arrive at our business centers, staffing and equipment for first responders is a large part of the city's budget, yet annual revenue from commercial property roles was anemic in our general fund.

Prop. 15 directs the remaining 40% of new revenue, estimated at about $4 billion, to California public education. Using a formula similar to how Partners in Education allocates to each student after centralizing funds, it will be distributed to schools throughout the state after securing a margin for basic-aid districts like Palo Alto Unified.

In Jennifer Bestor's Aug. 21 Guest Opinion column titled "Where did the other $713 million go?" she identified the mechanics of how new revenue for education will be allocated. Sadly, most of the inequalities of school funding will not be resolved. These inequities escalated when Prop. 13 was enacted in the late 1970s. Jerry Brown was governor and ordered each county to create a formula to distribute property tax revenue between counties, municipalities, districts and schools. No two counties have the same formula. For example, San Francisco is a city and county, whereas Santa Clara County is populated by many municipalities and special districts. Prop. 15 will distribute equally to each school based on student population.

This is not a tax initiative. Since the tax rate will not change, a simple majority of voters can correct this loophole. Santa Clara County Assessor Larry Stone promotes a different correction to Prop. 13 by changing the tax rate for commercial properties from 1% to 2-3%. This correction, which is not on the November ballot, would require support from a super majority of voters (67%).

The argument made by opponents of Prop. 15 — that this loophole correction will harm small businesses — has been invalidated. A study commissioned by Silicon Valley Community Foundation found that Prop. 15 "will not impact small business renters, including triple net lease tenants" and that "the burden will fall on the state's largest corporations and highest-value properties."

Small businesses in general are subject to escalating assessments. For example, shortly after my husband's Palo Alto office secured a new lease, the building was sold for $12 million, which escalated the triple net pass-through to tenants for all building expenses. During my 25 years as a commercial real estate controller/accountant, our projects never profited from the corporate entity loophole. Many of our tenants were small businesses and start-ups. Rents are calibrated based on market forces, not property tax valuation.

Most small businesses do not rent from Chevon, Disneyland or Intel.

The League of Women Voters, city of Palo Alto and Santa Clara County support Prop. 15 and encourage Palo Altans to vote "yes." This is a small but vital step to restore revenue for our public services and invest in our future.

Nancy Shepherd is president of the League of Women Voters Palo Alto, former mayor of the city of Palo Alto and advisory board member for Evolve, a coalition partner of Prop. 15. She can be reached at [email protected]

• Read the opposing viewpoint on Proposition 15 by Menlo Park resident Jennifer Bestor: Guest opinion: Where did the other $713 million go?

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Guest Opinion: Dare to clean up part of Prop. 13? Vote 'yes' on Prop. 15

by /

Uploaded: Tue, Oct 6, 2020, 2:41 pm

In 1978 Palo Altans voted against "The Peoples Amendment to Control Taxation" aka Proposition 13. This historic constitutional amendment was placed on the ballot during a time of soaring real estate prices and out of control property tax assessments ranging between 2.5% and 3.5%. Proposition 13 pinned all property tax assessments at 1% of existing value or purchase price when property sold. This created a new base valuation methodology.

The initiative was targeted at helping senior citizens remain in their homes and governments to control public spending. Yet, it was unpopular with Palo Alto voters, who worried about funding for schools and public services. Sure enough, it dropped revenue by more than half.

Times have changed, and today Prop. 13 homeowner protections are popular, even in Palo Alto.

Existing inequalities were strengthened and expanded by Prop. 13. For example, I pay about one quarter in property taxes than my next-door neighbor. Our house is assessed at about $500,000 because our base value began in 1984. Our neighbors, who have school-age children, purchased their home 10 years ago for about $2 million.

Inequities between commercial property base valuations are more extreme, and costing California public services about $12 billion year after year.

Prop. 13 protects both residential and commercial property equally. Yet, unlike people, publicly held corporate entities, like multinational corporations, live forever — shareholders change, but property ownership does not, which means that base valuation from 1978 continues indefinitely. Today residential property funds 72% of our public services. When voters enacted Prop. 13, property tax revenue was split equally between commercial and resident parcels.

Based on the Santa Clara County Assessor's office annual report, 15% of commercial properties maintain pre-Prop. 13 base valuations, and only 58% have current assessment.

Proposition 15, which is on the November ballot, will correct this loophole by changing the valuation methodology for commercial and industrial properties every few years to market rate. This will add a steady stream of revenue to local communities and schools.

There will be no change to residential property protections, including corporately held residential rental complexes.

The Schools and Communities First Initiative will raise an estimated $12 billion across the state once deployed. In fact, research identifies that 10% of California commercial property will raise about 92% of the new revenue. When fully implemented, an estimated $1 billion of new revenue will flow to our county.

These new revenues are split between schools and communities; 60% will go to municipalities, special districts, and the county. The city of Palo Alto will receive an estimated $22 million annually, the Midpeninsula Regional Open Space District about $9 million.

I was on Palo Alto City Council during the Great Recession, and staffing basic community services like fire and police was a challenge. Since the city's daily population doubles as employees arrive at our business centers, staffing and equipment for first responders is a large part of the city's budget, yet annual revenue from commercial property roles was anemic in our general fund.

Prop. 15 directs the remaining 40% of new revenue, estimated at about $4 billion, to California public education. Using a formula similar to how Partners in Education allocates to each student after centralizing funds, it will be distributed to schools throughout the state after securing a margin for basic-aid districts like Palo Alto Unified.

In Jennifer Bestor's Aug. 21 Guest Opinion column titled "Where did the other $713 million go?" she identified the mechanics of how new revenue for education will be allocated. Sadly, most of the inequalities of school funding will not be resolved. These inequities escalated when Prop. 13 was enacted in the late 1970s. Jerry Brown was governor and ordered each county to create a formula to distribute property tax revenue between counties, municipalities, districts and schools. No two counties have the same formula. For example, San Francisco is a city and county, whereas Santa Clara County is populated by many municipalities and special districts. Prop. 15 will distribute equally to each school based on student population.

This is not a tax initiative. Since the tax rate will not change, a simple majority of voters can correct this loophole. Santa Clara County Assessor Larry Stone promotes a different correction to Prop. 13 by changing the tax rate for commercial properties from 1% to 2-3%. This correction, which is not on the November ballot, would require support from a super majority of voters (67%).

The argument made by opponents of Prop. 15 — that this loophole correction will harm small businesses — has been invalidated. A study commissioned by Silicon Valley Community Foundation found that Prop. 15 "will not impact small business renters, including triple net lease tenants" and that "the burden will fall on the state's largest corporations and highest-value properties."

Small businesses in general are subject to escalating assessments. For example, shortly after my husband's Palo Alto office secured a new lease, the building was sold for $12 million, which escalated the triple net pass-through to tenants for all building expenses. During my 25 years as a commercial real estate controller/accountant, our projects never profited from the corporate entity loophole. Many of our tenants were small businesses and start-ups. Rents are calibrated based on market forces, not property tax valuation.

Most small businesses do not rent from Chevon, Disneyland or Intel.

The League of Women Voters, city of Palo Alto and Santa Clara County support Prop. 15 and encourage Palo Altans to vote "yes." This is a small but vital step to restore revenue for our public services and invest in our future.

Nancy Shepherd is president of the League of Women Voters Palo Alto, former mayor of the city of Palo Alto and advisory board member for Evolve, a coalition partner of Prop. 15. She can be reached at [email protected]

• Read the opposing viewpoint on Proposition 15 by Menlo Park resident Jennifer Bestor: Guest opinion: Where did the other $713 million go?

Comments

Nancy
Registered user
Barron Park
on Oct 6, 2020 at 8:34 pm
Nancy, Barron Park
Registered user
on Oct 6, 2020 at 8:34 pm
84 people like this

California has needed to address large corporation's failure to pay commercial property taxes for 40 years. We can no longer afford to give this massive tax break to huge commercial property owners. EVERY other state reassesses commercial property every 1 to 5 years. This is a narrowly tailored fix (just the very largest commercial properties) that does NOT touch homeowners' property taxes. When Prop. 15 passes, the city of Palo Alto will receive $22 million a year. Given we just had to cut $40 million, these are sorely needed funds. That's why our Palo Alto City council voted unanimously to endorse Prop. 15. Our schools desperately need these additional commercial property revenues. PAUSD will get $1.1 million more per year. Statewide, the additional billions annually will start creeping CA schools only back up to national average in per-student funding (cost of living adjusted). Voting "Yes on Prop. 15" means joining the League of Women Voters, CA PTA, firefighters, nurses, teachers, Sierra Club, League of Conservation Voters and many more wonderful organizations.


Really?
Registered user
Esther Clark Park
on Oct 6, 2020 at 9:30 pm
Really?, Esther Clark Park
Registered user
on Oct 6, 2020 at 9:30 pm
42 people like this

How can you say that "This is not a tax initiative" simply because the tax rate won't change? Will businesses pay more in taxes? Is the initiative targeting taxes? Yes on both counts. In my book that makes this a tax initiative.

If they next come and try to repeal Prop 13, or change it to match what is being asked for commercial properties, and you see your $500,000 assessment jump to $3M and your $6,000/yr tax bill jump to over $30,000, will you say it's not a tax initiative.

It's always easy to make other people pay more.

What is the annual growth rate of property tax money going to the school district? I believe it is close to 4x the rate of inflation over the past 10+ years.

As for city expenses, maybe the city can focus on the necessities before funding art installations and worrying about a "statement bridge" over 101.

You also say that "Rents are calibrated based on market forces, not property tax valuation" Are you trying to say that landlords do not take into account their own costs when figuring out how much to charge in rent? Market forces might set the ceiling for rents, but at some point the landowner needs to cover their costs and if their taxes go up, that floor goes up as well.


Jon Klein
Registered user
Barron Park
on Oct 6, 2020 at 11:58 pm
Jon Klein, Barron Park
Registered user
on Oct 6, 2020 at 11:58 pm
71 people like this

When Prop 13 was passed in 1978 the total property tax burden was shared roughly 50/50 between commercial and residential properties. Because commercial properties change ownership far less frequently then residential property that burden has shifted to where residential property owners now pay almost 80% of the total tax. Prop 15 goes a long way to correcting this inequity. It does absolutely nothing to change the Prop 13 protections for residential property owners.


Stuart Rosenberg
Registered user
another community
on Oct 7, 2020 at 9:14 am
Stuart Rosenberg, another community
Registered user
on Oct 7, 2020 at 9:14 am
12 people like this

Makes sense on one level. Money is needed. I think this is not the right time for this particular bill. I think the bill should be reworked. So many property owners are retirees who depend on the income from properties they bought many years ago. The property taxes are raised 2% a year compounded. These folks may have two properties worth 1.5 million each so with a total of 3 million they are subject to the tax. Sounds like alot but many have loans and make a net of 1-2 % They will be underwater unless the lease allows them to pass through. Why not raise it 3% a year compounded and before you know it those owners will be paying close to full tax. If you want to target big corporations do so but please not the mom and pops. Additionally in most leases the tax increases get passed to the tenant. So many tenants are small businesses who will be taxed out of business. Some principles are good here but I am voting no until there is a bill to address these failings.


Nancy Shepherd
Registered user
Southgate
on Oct 7, 2020 at 9:23 am
Nancy Shepherd, Southgate
Registered user
on Oct 7, 2020 at 9:23 am
73 people like this

Response to Really?

-by law tax initiatives require a super majority vote, Prop 15 does not change the taxable rate, yet provides large corporately held property to pay their fair share for public service instead of only 28%. The super majority requirement for tax initiatives was enacted as part of the 1978 Prop 13 initiative, which passed by a 64% margin and helps to protect its legacy. A few states have enacted protections for residential properties, but not commercial. California will now be more normalized.
-if residential property valuation assessments are changed, voters will decide at the ballot box. Since this concept is not part of Prop 15, there will be no change.
-commercial rents are indeed based on market forces, not landlord costs. Purchase price for commercial property is valued at local rental rates after applying a CAP rate based on location. For example, my husbands new rent Is now reduced by about 15% from 4 years ago due to Covid. And, this reduced rate (along with vacancy assumptions) will affect a sales price for the building as well.


jr1
Registered user
Greenmeadow
on Oct 7, 2020 at 10:43 am
jr1, Greenmeadow
Registered user
on Oct 7, 2020 at 10:43 am
27 people like this

The State of California needs to learn to live within a budget. Most taxpayers know if this passes next on the list will be residential homes. Businesses leave the state of California because of high taxes. If this passes once leases are up, businesses will be moving out of the state again. Building owners will pass the tax along to business and they once again will be put at a disadvantage. This will also have a negative effect on stock prices since stockholders will see another tax for California corporations. The State of California needs to live within a budget. If they want to address something they could address the unfunded mandates that are approaching 90 billion dollars.


What Will They Do Next
Registered user
Old Palo Alto
on Oct 7, 2020 at 10:45 am
What Will They Do Next, Old Palo Alto
Registered user
on Oct 7, 2020 at 10:45 am
29 people like this

Sacramento will never have enough tax payer money to spend. That's why Prop 13 was passed in the first place, to put a lid on wasteful spending. And that's why it should remain untouched.


commonsense
Registered user
Professorville
on Oct 7, 2020 at 10:56 am
commonsense, Professorville
Registered user
on Oct 7, 2020 at 10:56 am
39 people like this

California will soon have the highest income tax in the nation at over 16% for some. Ultimately, this tax is passed on to tenants which is ultimately passed on to the consumer. Locally, small, independent business will see their rent go up which already cannot afford. Next, big box stores and banks lining University, not restaurants.

On the surface, this looks like a no brainer but dig a little deeper and you'll see that it will push even more businesses and residents out of California. Smaller population, less income to CA, fewer people paying taxes, higher taxes again. CA needs to figure out it's spending problem before increasing taxes.


Small Business Owner
Registered user
Old Palo Alto
on Oct 7, 2020 at 11:24 am
Small Business Owner, Old Palo Alto
Registered user
on Oct 7, 2020 at 11:24 am
27 people like this

I don't get why the NNN lease argument is so overlooked. The author first says "will not impact renters, including NNN lease tenants". She then says her husband's lease payments were escalated due to NNN pass-through. YES, that is how NNN works - property taxes are passed to the tenant, not paid by the landlord. I would say escalated lease payments means he was impacted, wouldn't you? This happened to me in two leases, and each time my rent was raised by thousands of dollars (a 40% jump in one case). Both times it happened because the building was sold and reassessed. Prop 15 will make this happen for *all* the small businesses on NNN leases out there. No, we small businesses don't rent from Chevron, but a huge number of us signed NNN leases. The restaurants, gyms, salons, all the small businesses struggling through COVID will suddenly have to pay thousands more per month? Can we just call Prop 15 the anti-PPP program?


Concerned
Registered user
Crescent Park
on Oct 7, 2020 at 11:47 am
Concerned, Crescent Park
Registered user
on Oct 7, 2020 at 11:47 am
27 people like this

According to the Legislative Analyst Office

"August revenue collections from the state’s three largest taxes—the personal income tax, corporation tax, and sales tax—were ahead of budget projections by $1.7 billion (24 percent)"

It is unclear that more money is required by the state even when the private sector is suffering.

The Community Foundation may have concluded that triple net renters won't see the increased property tax in their rent but when I was one, I always did. And, for sure, once the state has come for commercial property it will pivot to residential.

Now is not the time to further squeeze the goose.


What Will They Do Next
Registered user
Old Palo Alto
on Oct 7, 2020 at 12:14 pm
What Will They Do Next, Old Palo Alto
Registered user
on Oct 7, 2020 at 12:14 pm
6 people like this

@commonsense .... Sacramento has no common sense :D)


Me 2
Registered user
Old Palo Alto
on Oct 7, 2020 at 12:45 pm
Me 2, Old Palo Alto
Registered user
on Oct 7, 2020 at 12:45 pm
17 people like this

The problem is structural - we lean too heavily on income tax, which is much more volatile than property tax.

So this is a good idea in general. BUT for me to support Prop 15, it would have to reduce the state income tax rate by a commensurate amount.

It doesn't, so I won't support it.

This is simply a tax increase to generate more revenue for the state. If it walks look likes a duck, walks like a duck... it's a duck. No finessing of legal language will change what is basically a tax increase.


Neil
Registered user
Gunn High School
on Oct 7, 2020 at 1:52 pm
Neil, Gunn High School
Registered user
on Oct 7, 2020 at 1:52 pm
24 people like this

How about instead of trying to find new ways of taxing the populace to death, we start to live within our means. California has some of the highest taxes in the Nation and what does the average citizen get for all those taxes? Forests that are not maintained properly, which has lead to millions of burned acres of land. The incredible amounts of pollution that comes from allowing homelessness to go unchecked. An education system that bends over backwards to fill their halls with international and out of state students just to increase their revenue. Nevermind the fact that these institutions were put in place to educate the children of California residents. What does Newsom do. He bans gas cars in the State and starts a committee to look into reparations for slavery. Did California even have a major slave trade?
I totally reject this push to continue to tax the population to death. Dont be fooled, just because you do not own a commercial property. They will come for you next. They always do.


Small Business Owner
Registered user
Old Palo Alto
on Oct 7, 2020 at 2:03 pm
Small Business Owner, Old Palo Alto
Registered user
on Oct 7, 2020 at 2:03 pm
21 people like this

Found the Community Foundation report that "invalidates" the small business argument at Web Link. I must say, something smells fishy. It says " if an assessed value is lower than market value, this does not influence RENT." (my emphasis on rent). Then it goes on "in a triple net lease, the tenant... is responsible for... real estate taxes". The conclusion they drew, that NNN therefore doesn't raise "rent", can't be mathematically true. If the tenant pays real estate taxes and the assessment goes up to market value, then tenant must pay more. Simple math.

UNLESS they're playing word games. As anyone who has a NNN lease knows, there is "base rent", and there is "NNN expenses". Add up both, and that's what's paid to the landlord. It seems the analysis says "rent" doesn't go up, which is very true - tenants have signed lease contracts with stated rents after all! LL's can't randomly raise rents. However the study doesn't explicitly address NNN expenses! Either way, it's money out the door that we can't afford. NNN expenses isn't rent, it's just another expense for the poor small business.


Bri_jms
Registered user
another community
on Oct 7, 2020 at 4:34 pm
Bri_jms, another community
Registered user
on Oct 7, 2020 at 4:34 pm
17 people like this

Vote no on this, just read a interview about this with willy brown, by the way he is also voting no on this. I don't normally agree with him, but he Said the loophole is from the then legislature setting prop 13 up to be implemented. They messed up on the commercial side of it and it needs to be fixed via the legislature, it's just a small tweek to the commercial tax. The loophole is not From the Jarvis /Gann prop 13 that most of us voted for. This prop 15 is a money grab and one of the worst parts is it will raise property taxes on large apartment complexes valued over 3 million, and not many are valued at less than that. That will cause rent's on families and individuals living in apartment's, some of which cannot afford it.
Vote No on prop 15


Oh well.....
Registered user
Old Palo Alto
on Oct 8, 2020 at 12:18 pm
Oh well....., Old Palo Alto
Registered user
on Oct 8, 2020 at 12:18 pm
7 people like this

VOTE NO ON 15!


Alice Schaffer Smith
Registered user
Downtown North
on Oct 8, 2020 at 4:30 pm
Alice Schaffer Smith, Downtown North
Registered user
on Oct 8, 2020 at 4:30 pm
95 people like this

Some of the anomalies this will correct: the gas stations at a crossroads. Same lot size, same services. One property changed hands and pays say $10k annual property tax at the new assessed value after the sale; the other protected by Prop. 13 pays $2k annual property tax giving that gas station a huge unfair tax advantage. Another example: Disneyland is assessed at a completely unfair rate on land valued at billions in today's market. I support Proposition 15 and ask all of you to do so, too. Fair taxation ...


Name hidden
Downtown North

Registered user
on Oct 8, 2020 at 9:32 pm
Name hidden, Downtown North

Registered user
on Oct 8, 2020 at 9:32 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Jeff Sanders
Registered user
another community
on Oct 10, 2020 at 10:46 am
Jeff Sanders, another community
Registered user
on Oct 10, 2020 at 10:46 am
2 people like this

The premise that Prop 13 shifted the property tax burden to residential from commercial isn't shared in this LAO analysis.

Did Proposition 13 Cause Residential Properties to Pay a Larger Share of Property Taxes?


Web Link


DJT: let's all pay $750 in income tax
Green Acres

Registered user
on Oct 10, 2020 at 10:54 am
Name hidden, Green Acres

Registered user
on Oct 10, 2020 at 10:54 am

Due to violations of our Terms of Use, comments from this poster are only visible to registered users who are logged in. Use the links at the top of the page to Register or Login.


Jeff Sanders
Registered user
another community
on Oct 10, 2020 at 11:02 am
Jeff Sanders, another community
Registered user
on Oct 10, 2020 at 11:02 am
7 people like this

"This is not a tax initiative."

I find that completely disingenuous. It's a tax increase initiative because that is precisely what it does; takes more money from taxpayers than under existing law. The idea that only rate changes are tax increases doesn't hold water. Changing the basis for what's taxed changes the the effective tax being imposed. If people were suddenly forced to pay income tax on the first and every dollar of income, including the value of benefits like health care, with no way to exempt any income, but without changing the existing tax rates, I doubt any of those taxpayers would question whether that was a tax increase.


Stuart Rosenberg
Registered user
another community
on Oct 10, 2020 at 11:41 am
Stuart Rosenberg, another community
Registered user
on Oct 10, 2020 at 11:41 am
9 people like this

Unfortunately prop 15 is a small business killer.The vast majority of small business leases are NN where the property tax increases get passed through to business. Imagine opening a business and signing a lease based on current property tax . Now your tax is increased exponentially and you are forced to close your business. Fair?The NAACP has come out strongly against prop 15. Property tax on commercial and residential are raised 2% a year compounded. Why not just increase the yearly tax increase to 3% on everyone- residential and commercial.? With the value of compounding you will raise great quantities of income in little time. The argument that the individual made about not fair because the business next door pays less. The same argument can and will be made for residential! Why am I paying 25000 a year in property tax but the person who live next door pays 5000 a year. Fair? This bill does have some merit but go after the big boys. Vote it down and rewrite it so small business can survive especially during covid.


Concerned
Registered user
Crescent Park
on Oct 11, 2020 at 8:45 pm
Concerned, Crescent Park
Registered user
on Oct 11, 2020 at 8:45 pm
4 people like this

We went with our daughter, son-in law and two grand kids to half moon bay for pumpkins this weekend.... while my daughter thought there was a bit of over charging...I pointed out that they only have about three weeks to make some money...then of course Christmas...but...I couldn't help but think what prop 15 would do to these mostly family nursery companies.

Raise their taxes to the local value of converting them all to condos and they would be forced to sell.

This seems wrong.


Nancy Shepherd
Registered user
Southgate
on Oct 12, 2020 at 4:37 pm
Nancy Shepherd, Southgate
Registered user
on Oct 12, 2020 at 4:37 pm
13 people like this

Response to “concerned”:

Agricultural property is not included in the initiative. It will be considered like residential, with no change. Only commercial and industrial property assessed over $3M will be affected.


Really?
Registered user
Esther Clark Park
on Oct 12, 2020 at 5:14 pm
Really?, Esther Clark Park
Registered user
on Oct 12, 2020 at 5:14 pm
6 people like this

@Nancy Sheperd - you wrote,"Agricultural property is not included in the initiative. It will be considered like residential, with no change. Only commercial and industrial property assessed over $3M will be affected."

That's simply not true. While the land itself might not be reassessed, Prop 15 does reassess "Fixtures and Improvements". This, from the Agricultrial Council of California, "Though proponents say Prop. 15 makes no changes to the taxation of agricultural land, our farming community is impacted because “fixtures and improvements” are subject to the tax hikes under the initiative.

What falls within the definition of “fixtures and improvements?” Dairies, barns, packinghouses, food processing facilities, buildings, structures and wineries would be all reassessed at current market value. Agricultural improvements such as fruit and nut bearing trees and producing vineyards are included, as well."

Trees, vineyards, barns, etc... would all be reassessed.

The California Farm Bureau Federation President said,"Proposition 15 will raise taxes on California farmers and ranchers, at a time when they are already suffering from the effects of the pandemic. The measure would increase taxes on barns, dairies, wineries, processing plants, vineyards, orchards and other agricultural improvements,”

When farmers costs go up, so do food costs. And, who is most hurt when the cost of food increases? The hardest hit are usually those with lower incomes.

[Portion removed.] For those with questions about Prop 15, I suggest you do you own research [portion removed.]


Jon
Registered user
Barron Park
on Oct 13, 2020 at 5:41 pm
Jon, Barron Park
Registered user
on Oct 13, 2020 at 5:41 pm
3 people like this

Really?

You got it wrong.
Read the proposition text. It plainly states :
"shall also not apply to real property used for commercial agricultural production as defned in this section. Real property used for commercial agricultural production as defned in this section shall be assessed as required by Section 2 of this article."

Also, according to the Analysis by the Legislative Analyst: "Housing and agricultural land continues to be taxed based on its original purchase price."

Regarding buildings and equipment used in agricultural production, there does seem to be some confusion, but the proposition itself appears to except these as well.
The California Farm Bureau's opposition is likely a result of some ambiguity in the wording of the proposition.
For a pretty good treatment of the controversy see:
Web Link

[Portion removed.]


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