mar-apr-2020

ADVOCACY REPORT The “Split Roll” Tax Ballot Initiative and Its Impacts on Agriculture This year on the ballot, voters will be asked to vote on a “split roll” initiative, which would amend Proposition 13 from 1978 to exclude commercial property from its protections against extreme property tax increases. The initiative, officially known as the California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative, has qualified to appear on the November 3, 2020 ballot in California as an initiated constitutional amendment. This revision to the Proposition 13 is very different from the Proposition 13 that was on the March 2020 ballot which was the California Schools and Local Community Funding Act of 2018. In fact, due to the mass confusion, Legislators are trying to have the number 13 removed from assignment for any future proposition initiative. Background on Proposition 13 Proposition 13 has been the law for more than 40 years. In 1978, property values were soaring and so were their corresponding property taxes. There was no limit to how high an assessor could increase a property’s value in any given year. Between 1972 and 1977, home prices in Southern California doubled. Property tax bills also doubled, even if the tax rates did not change. Many taxpayers could not afford their ever-increasing property taxes and feared losing their homes. Proposition 13 brought a halt to all that — limiting total taxes to one percent of the property’s value, and any increases to a maximum of one percent per year. California voters passed the constitutional amendment by a nearly two to one margin, and solidified property tax reasonableness and predictability. Proposition 13 Amendments to State Constitution Keep Property Taxes Manageable and Predictable Proposition 13 required that all categories of real property on the local assessment roll be assessed at the same basic tax rate and under the same valuation standard. It did not distinguish among residential, commercial, industrial, agricultural, or any other type of property. When a property is sold, it is reassessed at its new purchase price. It is then taxed at a rate of one percent of that new value, and from then on, Proposition 13’s tax limits apply until it is sold again. These protections provide stability and predictability to both property owners and government coffers — protecting both from very high or very low reassessed property values each year. Furthermore, Proposition 13 required any state tax to be 2 2 A L M O N D F A C T S