Last week I reported that the Los Angeles County Business Federation (BizFed) poll showed that business respondents found homelessness such a severe problem that it was one reason businesses were choosing to leave the state. But far be it for me to ignore another issue that could chase even more businesses away from California: the split roll property tax increase aimed at businesses on the November 2020 ballot. 

The poll found that 40% of the respondents would consider leaving California if the split roll passed. 

Raising commercial property to full market value for tax purposes, as the split roll prescribes, will bring in up to $11 billion according to official estimates. Such a large tax increase would cause businesses to respond in different ways. 

Asked how their business would be affected if the split roll measure passed, 62% said rents may increase, 53% said profit margins would decrease, 40% said they would consider moving their business out of the state, 35% said they would look to payroll cuts. 

Taxes and fees top the concerns of Los Angeles business leaders for the ninth year in a row in the annual BizFed poll so its not a surprise that an additional whopping tax increase in the form of a split roll would have four out of ten business leaders thinking about throwing in the towel on California. 

Since 2017, taxes and fees have been tabbed 81% of the time by poll respondents as the leading cause why businesses leave Los Angeles County and California. 

For business, the issue of the split roll property tax increases is clear, as the poll indicates. But will voters catch the message that the business community is putting out?

Voters will be told that the tax increase will fund schools and local governments and that if they vote for the measure they will be raising a tax on someone else. Yet, the business leaders’ answers to the BizFed poll questions tell what happens in practice if business property taxes are raised. 

Increased rents for certain businesses and direct tax increases for others according to the business leaders would translate into fewer jobs, increased costs for goods and services, payroll cuts or lost jobs if the businesses pull up stakes in California. Those realities would directly affect the voters.