Skip to content
CapRadio

CapRadio

listen live donate
listen live donate
listen live
donate
  • News
    • News

    • State Government
    • Environment
    • Health Care
    • Race and Equity
    • Business
    • Arts and Lifestyle
    • Food and Sustainability
    • PolitiFact California
    News
    • News

    • State Government
    • Environment
    • Health Care
    • Race and Equity
    • Business
    • Arts and Lifestyle
    • Food and Sustainability
    • PolitiFact California
  • Music
    • Music

    • Classical
    • Jazz
    • Eclectic

    • Daily Playlist
    Music
    • Music

    • Classical
    • Jazz
    • Eclectic

    • Daily Playlist
  • Podcasts & Shows
  • Schedules
  • Events
  • Support
    • Support
    • Ways to support
    • Evergreen Donation
    • One-Time Donation
    • Corporate Sponsorship
    • Vehicle Donation
    • Stock Giving
    • Legacy Giving
    • Endowment Support
    • Members
    • Member Benefits
    • Member FAQ
    • Member Newsletter

    • Fund drives
    • Drawing Winners
    • Thank You Gifts
    Support
    • Support
    • Ways to support
    • Evergreen Donation
    • One-Time Donation
    • Corporate Sponsorship
    • Vehicle Donation
    • Stock Giving
    • Legacy Giving
    • Endowment Support
    • Members
    • Member Benefits
    • Member FAQ
    • Member Newsletter

    • Fund drives
    • Drawing Winners
    • Thank You Gifts
  • About
  • Close Menu
 We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 
  • State Government
  •  

California’s Proposition 15 Would Raise Taxes On Businesses While Supporting Schools, Local Governments

  •  Chris Nichols 
Tuesday, September 15, 2020 | Sacramento, CA
Listen
/
Update RequiredTo play audio, update browser or Flash plugin.
Andrew Nixon / CapRadio

William Land Elementary School in Midtown, Friday, Sept 11, 2020.

Andrew Nixon / CapRadio

California voters will decide this fall whether to approve Proposition 15, a major change to the state’s historic property tax law that would raise taxes on large businesses, while providing up to $11.5 billion per year to fund public schools, community colleges and local governments. 

The measure, also referred to as the “split roll” initiative, would raise taxes on commercial and industrial real estate worth more than $3 million. It would do this by removing the property tax protection for businesses granted in 1978 under the state’s landmark Proposition 13. The protection for homeowners would stay in place. 

“This initiative is about closing corporate property tax loopholes on the biggest, most profitable corporations in the state: The top 10%,” said Alex Stack, spokesperson for the Yes on 15 campaign. 

Stack said the measure would affect large, established Silicon Valley companies such as IBM and Intel, along with Hollywood movie studios and others that “haven’t changed ownership and are still paying property taxes based on assessments from the 1960s and ‘70s.” 

Under Proposition 15, the companies would have to pay property tax based on current market value. Right now, they pay a much lower tax based on the original purchase price. 

But Rob Lapsley, president of the California Business Roundtable and one of the measure’s opponents, says the tax hike would harm not just big businesses, but small ones, too. 

Lapsley said the owners of large commercial properties like shopping centers would pass the tax increase on to smaller tenants in the form of higher rents and fees. 

“Ultimately, everybody pays this tax,” Lapsley said. “But most importantly, the small business owner is going to get hit exactly at the wrong time in this economic crisis.” 

While both campaigns agree that property tax protections will remain for homeowners, they disagree on how home-based businesses will be treated. Stack said those are “totally exempt” from the measure’s tax increases. Lapsley, however, said the initiative gives the Legislature the authority to define a home-based business, creating uncertainty. 

The language in the initiative says “the Legislature shall also define and provide by statute that limited commercial uses of residential property, such as home offices, home-based businesses or short-term rentals, shall be classified as residential.” 

The higher property tax assessments would start in 2022 for some properties, but not until 2025 for those where half or more of the tenants are small businesses. 

How Would The Tax Revenue Be Shared? 

The nonpartisan California Legislative Analyst’s Office estimates Proposition 15 would generate between $6.5 billion and $11.5 billion in new funding each year for local governments and schools.

Sixty percent of the funds would be distributed to cities, counties and special districts. The total each receives would depend on the amount of new taxes paid by commercial properties in each community. 

“Not all governments would be guaranteed new money,” the LAO reported, citing a provision in the measure that reduces taxes on business equipment. “Some in rural areas may end up losing money because of lower taxes on business equipment.”

The LAO said the other 40% would go to K-12 schools and community colleges. 

“Each school or community college’s share of the money is mostly based on how many students they have,” the LAO reported.

False Claims On Social Media

Long before the measure qualified for the ballot, social media posts falsely claimed it would “repeal” the historic Proposition 13. PolitiFact California found those claims capture real concern about potential changes to Proposition 13 for large businesses, but also greatly misrepresent the specific changes the November measure would make for other properties. 

Homeowners, small businesses and most agricultural properties would not lose their Proposition 13 tax safeguards, as the social media posts suggest. That’s spelled out in the measure’s official state title and summary document.

Claims About Agricultural Land

Alex Stack of the Yes on 15 campaign said farms would retain their Proposition 13 protections. However, those with part of their property or an adjacent property that is used purely for commercial purposes and valued at more than $3 million would be subject to the tax increase under the measure. He estimated that few such properties exist, saying perhaps high-end winery tasting rooms or markets in Napa would be included. 

The Agricultural Council of California and other farm groups have opposed Proposition 15 saying it “would trigger reassessments at market value for agriculture-related facilities and improvements.”

Stack said Proposition 15 would have no effect on farms that make such upgrades. Existing state law already requires reassessments when property owners make improvements, he noted. 

Supporters and Opponents of Proposition 15

Many top Democratic leaders and public sector unions support the measure, according to a list compiled by Ballotpedia.org. They include presidential candidate and former Vice President Joe Biden, his running mate and California Sen. Kamala Harris, Gov. Gavin Newsom, Sacramento Mayor Darrell Steinberg, Oakland Mayor Libby Schaaf and San Francisco Mayor London Breed. 

Some of the unions that support the measure are the American Federation of State, County and Municipal Employees; the American Federation of Teachers; California Federation of Teachers; the California Teachers Association and the California Nurses Association. 

Opponents include Democrat and former Los Angeles Mayor Antonio Villaraigosa; the Howard Jarvis Taxpayers Association; the California Taxpayers Association; the California Farm Bureau Federation; the California NAACP State Conference; California Hispanic Chambers of Commerce; the California Small Business Association; and the California Grocers Association.

Campaign finance reports show supporters had raised $20.8 million as of June 30, the most recent filing period, Ballotpedia reported. The California Teachers Association Political Action Committee contributed $6 million, the largest amount. 

Meanwhile, opponents of the measure had pulled in $5.5 million up to June 30. The “No on Prop 15 - Stop Higher Property Taxes and Save Prop 13” committee contributed $3.1 million of the total.

Funding for that committee comes from the California Business Roundtable, the California Taxpayers Association and the Paramount Group, a real estate investment company. 


Follow us for more stories like this

CapRadio provides a trusted source of news because of you.  As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.

Donate Today  

    More about Election 2020

  • Election 2020: Latest Results And Updates

    See all of CapRadio's coverage of the 2020 Election, including our guide to voting, explainers for all 12 statewide ballot measures and fact-checks on election misinformation.

 Election 2020Proposition 15Propositions 2020

Chris Nichols

PolitiFact California Reporter

For the past dozen years, Chris Nichols has worked as a government and politics reporter at newspapers across California.  Read Full Bio 

 @christhejourno Email Chris Nichols

Sign up for ReCap and never miss the top stories

Delivered to your inbox every Friday.

 

Check out a sample ReCap newsletter.

Thanks for subscribing!

Thank you for signing up for the ReCap newsletter! We'll send you an email each Friday with the top stories from CapRadio.

Browse all newsletters

More State Government Stories

Andrew Nixon / CapRadio

Republican plan would outlaw homeless camps near California schools or parks

January 26, 2023

Andrew Nixon / CapRadio

State Justice Department hasn’t probed — or even logged — all police shootings of possibly unarmed people

January 27, 2023

Courtesy Mendocino College

University of California planning to expand outreach at 65 California community colleges

January 23, 2023

Most Viewed

10 new California laws that go into effect in 2023

California coronavirus updates: Pyongyang under lockdown for respiratory disease

Behind The I-80 Castle: A Drag-Racing, Beauty School Mogul’s Dream House

Cal State contends with 'unprecedented' enrollment declines

Still testing positive after day 10? How to decide when to end your COVID isolation

We Get Support From:
Become a Supporter

Most Viewed

10 new California laws that go into effect in 2023

California coronavirus updates: Pyongyang under lockdown for respiratory disease

Behind The I-80 Castle: A Drag-Racing, Beauty School Mogul’s Dream House

Cal State contends with 'unprecedented' enrollment declines

Still testing positive after day 10? How to decide when to end your COVID isolation

Back to Top

  • CapRadio

    7055 Folsom Boulevard
    Sacramento, CA 95826-2625

    •  
      (916) 278-8900
    •  
      (877) 480-5900
    •  Contact / Feedback
    •  Submit a News Tip
  • About

    • Mission / Vision / Core Values
    • Stations & Coverage Map
    • Careers & Internships
    • Staff Directory
    • Board of Directors
    • Press
  • Listening Options

    • Mobile Apps
    • Smart Speakers
    • Podcasts & Shows
    • On-Air Schedules
    • Daily Playlist
    • Signal Status
  • Connect

    •  Facebook
    •  Twitter
    •  Instagram
    •  YouTube
  • Donate

  • Listen Live

  • Newsletters

CapRadio stations are licensed to California State University, Sacramento. © 2023, Capital Public Radio. All Rights Reserved. Privacy Policy | Website Feedback FCC Public Files: KXJZ KKTO KUOP KQNC KXPR KXSR KXJS. For assistance accessing our public files, please call 916-278-8900 or email us.