Opinion: Irvine City Council To Consider Resolution To Oppose Proposition 15
Mayor Shea and Councilmember Kuo Request that the City of Irvine Adopt a Resolution to Oppose Proposition 15: Split Role Property Tax Initiative (Agenda Item 4.4)
Ballot Initiative 15 is a state level Constitutional Amendment and is a citizen’s initiative. The resolution request from Mayor Christina Shea and Councilmember Anthony Kuo provides little information about the provisions of Ballot Initiative 15, but did point out possible negative consequences. However, the information provided by Shea and Kuo is incomplete and misleading. See Memo below with draft resolution attached:4.4
If the City Council is going to discuss and decide the City’s position on a statewide ballot initiative, Council members and residents should be provided complete information regarding the provisions of the initiative, as well as the arguments for and against the initiative before voting on the resolution.
The initiative has been titled as: Tax on Commercial And Industrial Properties For Education And Local Government Services. It is also known as The California Schools and Local Communities Funding Act of 2020. A list of qualified statewide ballot measures can be found here.
A “Yes” vote: Supports ballot measure
A “No” vote: Opposes ballot measure
Currently, the value of commercial and industrial real property is based on original purchase price and is not reassessed on a regular basis. Current tax law provides tax cuts to large commercial and industrial property owners, and they pay a fraction of what small business owners pay as a result. If enacted, this constitutional amendment would serve to require commercial and industrial real property to be taxed at fair market value and the value of the properties would be reassessed on a regular basis. Revenue from the taxes would not go into the State General Fund, but into a fund distributed to local public schools, community colleges, and local government services. Small businesses would be exempt. This measure would also exempt up to $500,000 of small business personal property from taxes.
Fiscal Impact: Estimates differ, but the taxes would likely generate between $6.5 to $12 billion dollars in revenue.
Proponents’ Arguments for Prop 15
Corporations and large companies should pay taxes based on Fair Market Value. This measure would serve to grow our economy and provide a better quality of life now and for future generations of Californians. We need to do a better job investing in our schools and community colleges and do more to encourage small businesses as they have been hard hit by COVID-19. California is the only state that allows commercial and industrial properties to go decades without property value reassessments. The funds will help address inequities that poorer school districts face. California faces $54 billion in deficits and can use these funds to assist with funding schools and government services.
Proponents: Multiple U.S Senators and U.S. Representatives and State Senators and Assembly-members; Schools and Communities First; California Democratic Party; Green Party of California; School Districts and Boards of Supervisors; ACLU; Alliance of Californians for Community Development; PTAs; Teachers’ unions and associations, SEIU.
Opponents’ Arguments for Prop 15
Funds from higher taxes will be used for out of control pensions. California has an unfavorable business climate and low job creation. These added taxes will make the business climate and job creation statistics even worse. It will be difficult to attract and retain businesses and jobs.
Opponents: Californians Stop Higher Property Taxes; California Business Round Table; California Business Property Association; California Chamber of Commerce and multiple local chambers of commerce; California Black Chamber of Commerce; Hispanic Chamber of Commerce; California Grocers Association; California Restaurant Association; California Retailers Association; California NAACP State Conference; California Taxpayers Association; Howard Jarvis Taxpayers Association.