What is Prop 15?
- Fair and balanced reform that will generate $12B to improve schools and communities.
- Protects homeowners, renters, small businesses, and farmers.
- Requires owners of commercial/industrial property valued over $3M to pay taxes based on its current value, not the original sale value.
How will money be used in San Diego County?
- Prop 15 would generate $700M for local schools and communities in San Diego County.
- In K-12 schools, it would fund additional teachers, counselors, nurses, aides, equipment.
- In community colleges, it would fund job training programs, tutoring, counseling, child care.
- In local cities and the county, it would fund emergency response, foster care, domestic violence shelters, youth programs, water delivery, fire protection, health clinics and hospitals.
- Learn what your community gains.
How does Prop 15 help small businesses?
- Invests in livable communities with good schools, community colleges, and services.
- Cuts the business personal property tax for small businesses, which make up 90% of all businesses in California and in San Diego County.
- Creates fair competition for all businesses by requiring the oldest, biggest businesses to pay their fair share of property taxes, based on market value of property, not original sale value.
How does Prop 15 level the playing field for businesses?
- It requires all commercial/industrial properties valued over $3M to be assessed at the same value -- market value -- which puts them on an equal footing to compete.
- Right now, newer businesses have to compete with similar older businesses on unequal footing, paying higher property taxes based on their more recent property purchases. This not only disadvantages newer businesses but also out-of-state businesses entering CA.
- Putting businesses on an equal footing so they can compete is good for business, good for consumers, and good for San Diego County.
Who will pay increased property taxes?
- According to USC study, most of the revenue will come from the top 10% of property owners.
- 90% of commercial/industrial property in CA is valued at or under $3M and will not be affected.
- The biggest/oldest landowners in SD include multinational corporations like Blackstone, member-only clubs like the La Jolla Country Club, and big-ticket attractions like SeaWorld that charge 2020 prices and pay 1978 taxes, pocketing millions at our expense.
Will this affect home-based businesses?
- No. Prop 15 explicitly protects homes, apartments, and home-based businesses.
- Half of all small businesses are home-based and would be protected.
- Opponents tried to lie about this on the ballot and a judge struck them down. Nevertheless, they continue to lie to California voters.
Will this affect mom-and-pop businesses?
- No. Most mom-and-pop businesses sit on property that is worth far less than $3M.
- The median price of commercial property in San Diego County is less than $3M.
- Here are examples of specific areas of the county, based on recent property sales.
Will big landlords try to pass down the costs to small businesses and raise rents?
- Not likely because the market won’t bear it. According to a study from Beacon Economics, small business rents are determined by many things, but property taxes aren’t one of them.
- Analyzing 12,000 properties, they found that landlords charge in rent what the market can bear; the savings they get from low property taxes don’t get passed down to renters.
- They concluded that reassessments do not increase rents, and that Prop. 15 would only affect the largest corporations and highest-value properties.
- Additionally, vacancy rates in commercial real estate are now on the rise, giving small business tenants more negotiating power.
Will big business pass down the cost to consumers?
- As with rents, the market and not property taxes will dictate costs. Businesses will charge consumers what the market will bear. Even though businesses pay different taxes based on the year they bought property, they will charge the same to compete.
- A group of leading economists penned a letter on this very subject, dispelling the myth that property taxes dictate the price of goods and services, stating that “standard economic theory says that these kinds of impacts reduce windfall profits; they do not lead to price increases.”
What about the argument that this is not the right time to increase taxes?
- It’s the right time to fund what we need -- and we need teachers, nurses, and firefighters now. Small businesses also need support now, and Prop 15 will help them by providing tax relief (eliminating business personal property tax) and investing in the services we all need.
- Prop. 15 closes the largest loophole in CA history. That will increase the tax bill for the biggest and oldest commercial property owners -- the ones we have been subsidizing for decades -- but they will still benefit from the 2% cap on annual property tax increases in Prop 13.
- An analysis of Prop. 15 showed that only the top 10% of commercial and industrial properties will generate most of the new revenue, and they will have time to prepare; Prop. 15 won’t be phased-in until 2022-23 at the earliest and 2025-26 at the latest.
What about the argument that we have enough $ already for schools and communities?
- The wealthy may have enough. But not the rest of us. Prop 15 is fair, reasonable and equitable reform that invests in the public schools and services that help all of us.
- Schools, community colleges, health clinics, and fire crews are struggling with limited resources. In a pandemic that has laid bare the inequities that disproportionately affect low income communities, rural communities, and communities of color, we do not have enough.
- Each school year parents, teachers, community members and small businesses are asked to fill the hole in school funding through donations and fundraising to help kids with art, language, music and sports programs -- programs that were well funded before Prop 13.
Doesn’t the lottery fund our schools?
- Yes, but that revenue is only a small portion of the budget and can be diverted by lawmakers.
- The largest source of funding for our schools is property taxes, which cannot be diverted.
- Prop 15 ensures that all new revenue will go to local schools and communities where the revenue is generated. None of it will stay in Sacramento.
How do we know that revenue from Prop 15 will be used locally?
- Prop 15 explicitly states it will “distribute the new revenue resulting from this measure to schools and local communities, not to the State.”
- The measure also includes strict accountability and transparency requirements.
Won’t the money just go to public pensions for school or government employees?
- Pensions are part of pay. It is paid in lieu of social security benefits that private employers pay.
- We should not be afraid to fund the teachers, nurses, and firefighters we need to thrive.
- The opposition -- big corporations -- do not care about us. If they did, they would have been paying their fair share to support our schools and communities, rather than pocketing profits.
What about the argument that Prop 15 will be difficult and costly to implement?
- It is the Assessor’s job to reassess property. Prop 15 gives them the resources to do this more frequently for commercial/industrial property.
- If schools can teach more students by hiring more teachers, health clinics can help more patients by hiring more nurses, and firefighters can save more lives by hiring more people, why can’t the Assessor do the same and scale up its office?
- The County Assessors have said that they will need to hire and train more assessors. Prop 15 creates good-paying jobs that will stay right here in the county.
Bottom line, what is so important about Prop 15?
- Prop 15 is a historic, systemic, equitable, and long-term solution to usher in a new era of investment into what matters most — our children, families, and future.
The corporate loophole it would close has been devastating:
- K-12 students lack funding; per-pupil spending has fallen from 7th to 39th in the nation, and the ratio of students to teachers, nurses, and librarians is now last.
- Community College students, 2/3 of whom are people of color, often take more than 2 years to earn a degree because courses aren’t offered when they need them.
- Local residents have also suffered from chronic budget shortfalls — and we’ve been forced to “nickel and dime” our way to provide services through sales tax, parcel tax, and fees on utilities, parking, and other services.
A vote for Prop 15 is an act of courage. It addresses the harm caused by chronic disinvestment and moves us towards racial, economic and social justice. #VoteYesOn15
Do you like this post?