The Schools & Communities First initiative will raise $12 billion every year for California’s schools, essential workers, and local governments. This will come by ensuring that all corporate properties worth more than $3 million pay their fair share of property taxes – while protecting homeowners and renters, small businesses, and agriculture. This money is needed now more than ever and is critical to California’s recovery and reinvestment.
Vote YES on Prop 15
The League of Women Voters of California is a proponent of Prop 15, the Schools & Communities First Initiative. League positions support full funding for critical government services, including schools and services provided by local governments. These services include those related to: libraries, parks, infrastructure maintenance, health care, mental health care, children and family support, and elections. We also support a broad tax base in order to provide more stable funding for these critical services. Prop 15 will provide both increased funding, and a stable source of funding for schools and local governments.
Property taxes fund schools and local governments. Since 1978, property taxes in California have been limited to one percent of the value of the property. More importantly, properties are only reassessed when they change ownership. Some commercial property owners – particularly larger corporations – have not been reassessed for many years for a variety of reasons including corporate structures that make it difficult to determine if property ownership changed. This has led to a decline in funding for schools and local governments.
Under Prop 15, all residential property will continue to be exempt from reassessment until it is sold or transferred. This includes single family houses, apartment buildings, and anywhere else people live, such as: nursing homes, mobile home parks, and the residential part of mixed-use developments. In addition, Prop 15 exempts agricultural land.
Prop 15 only affects commercial property worth more than $3 million dollars, requiring reassessment at market value once every three years instead of waiting for the property to change ownership. Because of corporate structuring it is often difficult to determine when a commercial property changes ownership with the result of properties never being assessed as a whole. This reduces the amount of property tax revenue available to schools and communities.
Prop 15 does not affect home based businesses which account for nearly half of all small businesses in California. They will continue to be treated as residential property.
Further Prop 15 reduces the tax on tangible personal property (business equipment) up to $500,000 for all businesses, whether they own commercial property or not. This benefits small businesses.
It is anticipated that 10% of the commercial properties will account for over 90% of the almost $12 billion raised by Prop 15. The money stays within the counties and does not go into the State General Fund.
Given the current pandemic, California is in need of both short and long term recovery measures. We anticipate that short term recovery measures will be established by the state and federal governments. Prop 15 is one piece of that longer-term recovery and reinvestment package.
Taxes matter. They are how we invest in and build strong communities. Schools and local government services are the ways we actually do that – invest in our communities. Strong communities build a healthy economy. These strong communities are places we are all proud to live in, communities in which we all have opportunities to succeed.
Paid for by League of Women Voters Supporting Schools and Communities First – Yes on Prop 15 (Nonprofit 501(c)(4))