It’s that time of year again where signature gatherers are hustling outside shopping centers, farmers markets and grocery stores asking voters to sign petitions to qualify higher taxes for the ballot. Be wary of what they ask you to sign.
One measure in particular, the split-roll property tax, would raise taxes by up to $12.5 billion a year – the largest property tax increase in California history. Unfortunately, you won’t hear that from signature gatherers. So, please let me do the honor and convince you not to sign.
The proposed split-roll property tax would unravel Proposition 13’s protections for commercial and industrial properties by requiring reassessment at current market value every three years – creating a new base year for every business property in the state. This type of property tax is known as a split-roll tax because it ostensibly splits the property tax roll by business vs. residential property.
The measure claims to exempt small businesses, something that signature gatherers surely will try to convince you is true. However, this simply is not the case. Most small businesses rent their property under a “triple net lease” in which property taxes, maintenance and insurance costs are paid directly by the tenant, not the property owner.
Higher property taxes on businesses mean higher prices for consumers on everything we buy, including gasoline, groceries, diapers, clothes and utilities. California already has the highest percentage of population living in poverty, and suffers from the nation’s third-highest cost of living. The split-roll property tax will only make things worse. However, that’s not what signature gatherers will tell you when they approach you at your local grocery store.
They will tell you all the money goes to schools, yet less than 40 cents of every dollar raised would go to schools, and even that isn’t guaranteed.
First, because the tax money must pay off massive administrative costs before it is spent on anything else. The California Assessors’ Association found that it could cost up to $639 million a year statewide to implement the measure, and assessors would need to hire as many as 900 new staffers to manage the increased workload. Not to mention there would be thousands of businesses filing appeals and lawsuits because their property tax bills skyrocketed. The study estimated that these appeals would create a “major backlog requiring multiple years to resolve.”
Second, there is no guarantee the money will even make it into the classroom. Tax dollars likely would be used for pay raises and pensions for school administrators instead of buying books and other resources to educate our kids and increase test scores.
Even worse, the Legislature will define what constitutes “commercial use” of all property, including residential property. This means the Legislature could erode Proposition 13 protections even further, increasing taxes on Californians at an alarming rate, as was the case before Proposition 13 was approved by voters in 1978.
The reality is this measure is the first step in repealing Proposition 13 and increasing property taxes on homeowners.
The split-roll property tax is the classic example of “don’t judge a book by its cover.” Voters across the state should be wary of what signature gatherers tell them – remember, they get paid for collecting signatures, not telling you the truth.
Simply put, the split-roll property tax measure is not worth your signature.
Robert Gutierrez is president and chief executive officer of the California Taxpayers Association, and he co-chairs Californians to Stop Higher Property Taxes. He wrote this for The Modesto Bee.