TAXPAYERS SCORE A MAJOR VICTORY, NEW THREATS AHEAD
A measure that would have made it easier to raise local taxes throughout California was solidly defeated in a vote on the floor of the state Assembly, a critical victory for taxpayers that was achieved with the help of phone calls and petitions from Members of the Howard Jarvis Taxpayers Association.
Assembly Constitutional Amendment 1 would amend the state constitution to allow taxes for infrastructure or affordable housing to pass with the approval of only 55 percent of the electorate, instead of the two-thirds vote required by Proposition 13. The measure needed a two-thirds vote in the Assembly to advance to the Senate, but it fell 10 votes short of the 54 needed.
The author of ACA 1, Assembly Member Cecilia Aguiar-Curry, D-Napa, immediately asked for reconsideration, meaning the measure could come up for one more vote. However, it was not brought up for a vote for the rest of the legislative session, which ended in September. Constitutional amendments proposed by the Legislature require a two-thirds vote in each house, and the approval of a simple majority of voters statewide.
The failure of ACA 1 in the Assembly dashed the hopes of tax-raisers who wanted to push the measure through the Senate quickly enough to get it on the March statewide ballot. Now Aguiar-Curry has only the option of the November ballot, where a traffic jam of other tax increase proposals is beginning to develop.
One measure that has already qualified for the November ballot is an initiative called “The California Schools and Local Communities Funding Act.” The initiative would cut deeply into Proposition 13 by revoking its protections from business properties. Office buildings, shopping malls, factories, warehouses and most other commercial property would be reassessed to current market value at least every three years.
This is the so-called split roll, which would split the county assessors’ lists of taxable properties (the tax roll) into two categories: residential (homes and apartments) and commercial (businesses and industrial properties). For the first time in California history, commercial properties would be taxed differently from residential. Currently, all properties are assessed under Proposition 13 at the fair market value at the time of the most recent sale, plus an annual adjustment for inflation of no more than two percent.
Under the “Schools and Local Communities Funding Act,” most business properties would be hit with a massive tax increase, repeated every few years as property values increased.
Although this initiative had previously qualified for the November 2020 ballot, proponents have written a new version to address criticism of some aspects of the measure as well as poor polling results. Signature gathering is underway again.
Another tax increase that could be on the November 2020 ballot comes from the California School Boards Association and the Association of California School Administrators. The “Full and Fair Funding” initiative would increase California’s income tax, already the highest in the nation with a top marginal rate of 13.3 percent. The proposed initiative would increase the personal income tax rate on high earners by up to three percentage points, bringing the top marginal rate to 16.3 percent, while also increasing the state’s corporate tax rate by five percentage points on companies with more than $1 million in earnings.
And that’s not all. Governor Newsom signed a $15 billion bond measure that would authorize state borrowing to pay for school construction. It will be on the March statewide ballot, misleadingly numbered “Proposition 13.ˮ
It will be a challenging year, but taxpayers can prevail by working hard to spread the word about reckless tax increases, wasteful spending and threats to Proposition 13. Invite your friends to sign up for e-mail alerts from HJTA and to join if they’re not already members. You can find more information online at our website, www.hjta.org.