By Maydeen Merino
On Nov. 3, Californians will vote on Proposition 15, the state’s first significant property tax change since 1978.
|Voting YES on Proposition 15 will||Voting NO on Proposition 15 will|
|require commercial and industrial properties valued over $3 million to be taxed based on their market value, rather than their purchase price, with commercial agriculture and farmlands exempt.||allow all properties to continue to be taxed by the purchase price, with annual increases to the rate of inflation or 2%.|
Ruth Luevand is a chemistry teacher at San Dimas High School and a strong supporter of Proposition 15. She says public schools need extra assistance during these times of uncertainty. Although most California schools are still undergoing virtual learning, Luveand is looking towards the future and how she’ll keep her and her students safe once in-person education returns.
“This funding would be necessary to ensure that we can take care of some of the basic needs that we know we are going to have if we are going to come back to the inside classroom,” Luevand said.
COVID-19 means more money is needed to provide additional supplies to ensure classrooms are safe for in-person instruction. Luevand believes public schools also need funding for things like mental health services and alcohol and drug abuse programs for students.
“This pandemic has torn them asunder,” she said.
Luevand urges people of the community to look past the taxes and consider the well-being of students.
“So many people are focused on taxes, taxes, taxes, taxes, taxes,” Luevand said. “That’s easy to say when they’re not teaching 35 kids per class like I am, and that’s easy to say when they haven’t lost a student to suicide as I have.”
San Dimas resident Dan Daniel agrees that public schools need funding, but he doesn’t think this proposition will provide that funding.
“If you look at who’s backing this proposition, it’s the unions and the Democratic Party. It’s all the people who just want money so they can give it away,” Daniel said.
In 1978, California adopted Proposition 13, resetting property taxes based on the original purchase price, freezing the tax at the 1976 assessed value level. It also limited the annual increase of property taxes to a maximum of 2%.
“Prop 13 has provided incredible certainty and predictability for all property owners, and interestingly enough for local governments because local governments know what they’re going to get,” said Matt Klink, a spokesperson for No on Prop 15.
If Proposition 15 passes, it will increase property taxes on most commercial real estate worth more than $3 million, and the revenue will go to public schools, community colleges and local governments.
Many large businesses’ property tax would increase to equal the property’s current market value. The Legislative Analyst Office, the California Legislature’s Nonpartisan Fiscal and Policy Advisor, estimates that passage of Proposition 15 would generate $6.5 to $11.5 billion in new revenue every year. According to the Legislative Analyst Office, 60% of the funds would be distributed to cities, counties and special districts. The remaining 40% would increase funding for schools and community colleges.
Some educators support Proposition 15 because of the amount of funding that would go toward public schools. Based on the California Teachers Association Proposition 15 calculator, Bonita Unified School District would receive an estimated $6,120,037 from Proposition 15 annually.
Although Proposition 15 will fund schools and support local government, many opponents also argue Proposition 15 will lead to higher rents for small businesses.
“I am concerned about the consequences to regular everyday people that happen to own a business,” San Dimas City Council Member John Ebiner said.
In San Dimas, some small businesses rent space in buildings from owners who might own other units, Ebiner explained. If the building exceeds $3 million in value, it can potentially influence the cost of rent for some of the tenants.
The No on Prop 15 organization believes this, in turn, will drive up the cost of living and increase income inequality.
Properties in which small businesses account for 50% or more of the occupied space will not be reassessed until the 2025-2026 leasing year. This will provide small business tenants additional time to choose the best leasing option, according to the Proposition 15 ballots.
Proposition 15 also eliminates personal property tax on equipment and fixtures, providing a $500,000 per year exemption for all other businesses.
Proposition 15 will not directly affect homeowners or small businesses with under $3 million in California property. Farmlands and agriculture are also exempt.