The California League of Women Voters and other advocates of a split-roll property tax system filed an initiative December 15 that would increase property taxes on California employers by an estimated $11.4 billion per year.

A tax increase of this size will lead to higher consumer prices for goods and services we use every day. In addition to dramatically increasing the cost of living, this misguided measure would drive employers out of California, taking middle-class jobs and future career opportunities with them.

The measure is targeted specifically at California-based employers, and thus would make the Golden State less competitive with other states for jobs and investments. It would add a new section to the California Constitution that would, beginning with the 2020-21 budget year, require commercial and industrial property to be frequently reassessed at full market value.

Proposition 13, approved overwhelmingly by voters in 1978, established an acquisition-value assessment system for the property tax, setting the property tax rate at a maximum of 1 percent, and limiting the amount a taxpayer’s assessed value can increase to 2 percent annually. Under Proposition 13, property also is reassessed when new construction occurs.

Before passage of Proposition 13, taxpayers paid property tax based on county assessors’ opinion of value. Proposition 13 removed subjective opinions and guesswork from the property tax system.

Voters rejected a split-roll measure on the same ballot as Proposition 13, and have rejected several subsequent split-roll proposals.

Since passage of Proposition 13, opponents have claimed that business property receives an unfair benefit from the law. However, state data shows that at the time of Proposition 13’s passage, business properties paid approximately 58 percent of the total property tax burden, while today they pay approximately 62 percent of the property tax burden.

The Legislative Analyst’s Office studied this issue and reported last year:

“Residential, commercial, and industrial properties appear to be turning over at relatively similar rates. … (T)he rate of turnover for residential (including homeowners and rented residential properties) and commercial and industrial properties across the state is relatively similar in recent years. … Comparing the frequency of reassessment across property types in Los Angeles County … suggests that residential properties are not reassessed – and therefore do not turn over –more frequently than commercial and industrial properties. In addition, in San Diego County a typical commercial and industrial property was last reassessed ten years ago, compared to 14 years ago for residential property. This suggests residential properties turnover slightly less often, which increases the tax benefits to these properties.”