YES ON PROP 15

CLOSING CORPORATE PROPERTY TAX LOOPHOLES

THE PROBLEM

When homeowners buy a new house, the property is reassessed and the property tax increases.

But wealthy corporations and investors in nonresidential commercial and industrial property have ways of avoiding reassessment and keeping their taxes low.

Corporations change ownership all the time, but their property doesn’t get reassessed. They employ armies of lawyers and accountants to exploit loopholes to avoid reassessment.

These corporate loopholes deprive our schools and local communities of billions of dollars in badly needed revenues every year, and we pay the price.

PROP 15 CLOSES THE LOOPHOLES:

THE WEALTHY OWNERS OF ONLY 10% OF CALIFORNIA’S MOST EXPENSIVE BUSINESS PROPERTIES WILL PROVIDE 92% OF PROP 15’S LOOPHOLE-CLOSING REVENUES. 

Prop 15 closes loopholes by requiring non-residential commercial and industrial property to be reassessed based on its actual fair market value. The fair market value standard is used in nearly every other state to assess commercial and industrial property.

By closing these loopholes, Prop 15 will ensure wealthy corporations pay their share to support the schools and essential services provided by local communities from which they benefit.

Prop 15 keeps California business property taxes below most other states by maintaining Prop 13’s low 1% limit on property taxes. For example, businesses in Dallas pay 2.56%, in Phoenix they pay 2.57%, and in Portland they pay 2.46%.

Prop 15 also cuts taxes for small businesses and encourages new investment and start-ups by providing businesses with a $500,000 exemption on the business personal property tax on equipment, computers and fixtures. As a result, many small businesses will see a net reduction in their taxes.

PROTECTING HOMEOWNERS AND RENTERS

THE PROBLEM

Since Prop 13 passed in 1978, the residential share of property taxes has skyrocketed from 55% to 72%.

When corporate loopholes take billions of dollars from schools and local communities, homeowners and renters get nickel and dimed with higher fees, fines and other taxes to help cover the difference. Since 1978, these other charges and taxes have increased from 28% to 51% of locally generated revenues.

HOW PROP 15 PROTECTS HOMEOWNERS AND RENTERS

Prop 15 maintains FULL PROP 13 PROTECTIONS for homeowners and renters by exempting all residential property.

To make sure these protection can never be tampered with, Prop 15 places its protections for homeowners and renters into the California Constitution where they can only be changed by a vote of the people.

Prop 15 rebalances the scales by closing property tax loopholes benefitting wealthy corporations at the expense of the rest of us.

SUPPORTING SMALL BUSINESSES

THE PROBLEM

Even in the best of times small businesses struggle to compete against wealthy corporations like Amazon that pay little or nothing in taxes while making billions in profits. But these are not the best of times. The COVID-19 pandemic has compounded the struggle of small businesses to survive and pushed far too many over the edge.

PROP 15 SUPPORTS SMALL BUSINESSES

Prop 15 exempts small businesses and cuts their taxes to help them recover and rebuild. Prop 15 eliminates the business personal property tax on their equipment, computers and fixtures.

Prop 15 protects small businesses by specifically exempting all small businesses operating out of homes. According to the California Department of Industrial Relations over half of all small businesses are operated in homes.

For small business that operate outside of homes in commercial or industrial properties, Prop 15 exempts small businesses owning non-residential commercial and industrial property worth $3,000,000 or less. As a result of this exemption, owners of 65% of all nonresidential commercial and industrial properties will see no change in their property taxes from Prop 15. 

For small businesses that rent, many will be unaffected because they rent in the 65% of all business properties that are exempted from Prop 15 or in properties whose owners already are paying their fair share.

REMEMBER: Landlords who try to increase rents after their loopholes are closed will risk losing their tenants who can relocate to other buildings unaffected by Prop 15 or whose landlords want to fill their vacant spaces. Prop 15 gives small business renters more time to consider their options by providing them an extended phase-in.

By closing loopholes benefiting wealthy corporations, Prop 15 helps small businesses compete by leveling the playing field.

RECLAIMING BILLIONS FOR OUR SCHOOLS AND COMMUNITY COLLEGES

THE PROBLEM

California is home to great wealth, but despite all our wealth we are failing to invest in our children and our future. Our schools rank 39th in per pupil spending and have the nation’s largest class sizes. The COVID-19 pandemic has placed new demands on our schools and our teachers.

Investment in our community colleges will play a critical role in rebuilding after the massive economic dislocations caused by the pandemic. Millions of Californians are unemployed, with the impact felt most heavily on low-wage workers and communities of color. Now is the time to invest in our community colleges.

PROP 15 PROVIDES BADLY NEEDED FUNDING TO SCHOOLS AND COMMUNITY COLLEGES

The largest share of Prop 15’s billions of dollars in loophole-closing revenues will go to local schools, public charter schools, and community colleges.

• Prop 15 will provide schools with additional resources to meet new challenges from the pandemic while helping lower class sizes and reduce racial and economic inequities in education funding.

• Prop 15 will reclaim new funding for community colleges to invest in expanded training of frontline health care workers and prepare newly unemployed workers the skills they will need to re-enter the workforce and provide a better future for themselves and their families.

Prop 15 guarantees that every school district, charter school and community college district will receive new funding in addition to all other funding and that the new Prop 15 revenues cannot be used to replace other funding.

Prop 15 funds will go directly to education. State politicians are prohibited from appropriating, redirecting, transferring or borrowing Prop 15 funds.

Prop 15 guarantees that funds for schools and community colleges will be allocated in a manner that provides the most funding to schools with the greatest needs.

INVESTING BILLIONS DIRECTLY IN OUR LOCAL COMMUNITIES

THE PROBLEM

The property tax is the largest source of local revenues in our communities. When wealthy corporations avoid paying their fair share of local property taxes, they are robbing local communities of billions of dollars to invest in essential services. This directly hurts the quality of life for the people in those communities. It also impairs the ability of cities and counties to effectively respond to pandemics, to homelessness and housing affordability. Further, it undermines essential services provided by special districts, including fire protection, our water supplies, and sewage treatment.

PROP 15 RESTORES BILLIONS OF DOLLARS TO OUR LOCAL COMMUNITIES

Prop 15 allocates its funding directly to local communities the same way that property tax revenues are currently allocated to cities, counties and special districts.

Prop 15’s allocation of its new loophole-closing revenues is consistent with the provisions of Proposition 1A approved by 84% of voters in 2004 and Proposition 22 approved by 61% of voters in 2010 to protect local property taxes from raids by Sacramento politicians.

Prop 15 recognizes that California is a diverse state with many local communities with different needs and priorities.

Prop 15 places decisions on how local communities spend the new revenues – whether on front line healthcare workers, or reducing homelessness, or increasing fire protection or another priority – in the hands of local elected leaders and requires them to be fully transparent about each dollar they receive and how it is spent.

Prop 15 requires that counties be reimbursed out of its loophole-closing new revenues for the costs incurred by county assessors and other county offices implementing the measure.

REQUIRING FULL TRANSPARENCY AND ACCOUNTABILITY

THE PROBLEM

We’ve seen it before. Voters approve a ballot measure promising new funding, but after it passes no one can explain where the money went.

PROP 15 PROTECTS TAXPAYERS BY DEMANDING FULL TRANSPARENCY

Prop 15 equips taxpayers to hold elected officials accountable by requiring every school district, community college, city, county, or special district that receives Prop 15’s loophole-closing funding to publicly disclose every dollar they receive and how it is spent, and to include these disclosures in their budgets.

Prop 15 further requires these public disclosures to be made widely available to the public and be written in a manner that is easily understood.

PROTECTING AGRICULTURE AND GIVING FARMERS A TAX CUT

THE PROBLEM

California agriculture is increasingly dominated by big corporations while the concerns of small family farmers are overlooked.

PROP 15 PROTECTS AGRICULTURAL LAND AND SUPPORTS SMALL FARMERS

Prop 15 exempts all agricultural land, making no change in existing laws affecting the taxation or preservation of agricultural land.

Prop 15 exempts all farmhouses and housing for agricultural workers

Prop 15 exempts farmers owning $3 million or less of commercial or industrial property – this exemption is in addition to the exemptions for agricultural land and farm housing.

Prop 15 eliminates the business personal property tax on farm equipment and fixtures for small farmers and provides a $500,000 exemption on farm equipment and fixtures for other farmers.