California Secretary of State Alex Padilla released the final title, summary and analysis for California’s Proposition 15 ballot measure Tuesday.
Prop. 15 would tax commercial and industrial property valued at more than $3 million based on its market value instead of the price at which it was purchased. The proposition would generate an additional $6.5 billion to $11.5 billion every year, which would be used as funding for local governments and schools.
Residential properties, agricultural land, small businesses, as well as commercial and industrial properties with combined values of $3 million or less would be exempt from the tax hike.
According to No on Prop 15 campaign spokesperson Matt Klink, if passed, Prop. 15 would be the largest corporate property tax increase in state history.
In 1978, Californians voted in favor of Prop. 13, capping property taxes at 1% of the purchase price with annual increases of no more than 2%. Prop. 13 is advantageous for people who bought cheap real estate years ago, but cutting property taxes has resulted in decreased school funding, according to Alex Stack, spokesperson for Schools and Communities First.
“There have been these long-standing corporate property tax loopholes that essentially mean that corporations pay property tax rates based on assessments from the 1970s and 1980s,” Stack said. “This results in a significant amount of revenue not going to city and local governments, and instead going to corporate profits.”
Schools and Communities First is a coalition of teachers, nurses, doctors, small-business owners and elected officials who support Prop. 15, and includes the Berkeley City Council, Berkeley Unified School District and presidential candidate Joe Biden.
The coalition is working on a voter education campaign, as well as conducting TV and digital outreach.
“Prop 15 would make a big difference for our entire community. It wouldn’t just fund schools but all kinds of public sector services that we currently need,” said Matt Meyer, president of the Berkeley Federation of Teachers, in an email. “Our members are excited to work towards getting this passed in November.”
Klink, however, said he thinks there are ways to fund education other than passing such a large tax increase. The organization says it thinks the measure would hurt farmers, solar energy goals, renters and small businesses, and would be incredibly expensive for local governments.
Overall, Klink said he thinks the ballot measure lacks transparency and makes no guarantees that the tax revenue will end up in classrooms.
“It’s not just a property tax increase, it’s a tax that will be paid by all Californians,” Klink said.
He added that he thinks the tax will be passed on to consumers.
In June, the California Assessors’ Association announced it does not support Prop. 15 because it thinks it would be near impossible to hire, train and deploy the number of qualified assessors needed to evaluate properties. Implementation of the measure could cost more than $1 billion during the three-year phase-in period, according to the association.
On Nov. 3, California residents will vote on Prop. 15, in addition to 11 other ballot measures.
A previous version of this article may have implied that the property tax would be on all property owners.