Prop 15 could be boon to schools
AV School Board Assoc. discusses pros and cons
PALMDALE — Of the 12 state measures on the Nov. 3 ballot, Proposition 15 is probably the most contentious.
The proposed measure would require commercial and industrial properties, save for those zoned as commercial agriculture, to be taxed based on their current market value rather than their purchase price, with exemptions for smaller businesses.
Known as a “split-roll” proposal, Proposition 15 would assess taxes on commercial and industrial properties based on their market value, while continuing to assess taxes on residential properties based on their purchase price.
The measure would generate an estimated $8 to $12.5 billion annually at full implementation for local governments and schools.
Supporters say Proposition 15 could be a boon for local school districts; critics say it could devastate businesses further during an historic recession because of the COVID-19 pandemic.
The Antelope Valley School Boards Association gave both sides of the argument a chance to speak during the Sept. 22 Education Summit conducted.
Susan Shelly of the Howard Jarvis Taxpayers Association spoke on behalf of the “con” side and Kathy Vanderzee and Jesse Aguilar of the California Teachers Association spoke on behalf of the “pro” side.
“Proposition 15 is a revision of Proposition 13,” Shelly began.
Proposition 13 is the 1978 state measure that limits annual increases in assessed property value to 2%.
“One of the things that we’ve seen in this COVID-19
shutdown is that when businesses have less revenue, revenue to the government falls also. In fact, it craters,” Shelly said. “When you hurt businesses it’s not a free shot; it’s not free money. It causes, sometimes, unintended consequences.”
She cautioned the estimated $12.5 billion in annual revenue that Proposition 15 would reportedly raise was based on pre-COVID-19 estimates. Of that, schools would receive an estimated 40%. The remaining 60% would go to local governments.
Proposition 15 would remove the Proposition 13 protection on how much a property tax assessment can increase each year, she said.
“Property tax assessments do go up every year with inflation but they are capped at 2%, so it’s not as if everyone’s paying the purchase price assessment,” Shelly said. “What they are paying is a limited cap every year for as long as they’ve owned the property.”
The higher property taxes under Proposition 15 would be passed on to small business owners who lease their property and ultimately, consumers.
“Property tax revenue currently is very dependable; it goes up every year,” she said. “It’s on the spending side that we’ve seen the problem in school funding.”
Shelly said Proposition 15 does a lot of damage.
“All schools get out of it is 40% of what it raises after expenses,” she said. “It isn’t worth it. This is a bad policy and it’s a particularly bad time for this policy.”
Aguilar, a high school art teacher in Bakersfield, said the intent of Proposition 13 was not to shift the tax burden to homeowners.
He talked about the local share of the 40% from Proposition 15. For example, Westside Union School District would get an estimated $5.5 million annually and Lancaster School District would get an estimated $9.7 million annually.
“Even small Acton-Agua Dulce (Unified School District) is looking $683,000 additional every year and that’s huge,” Aguilar said.
In addition, he said Proposition 15 brings in money for healthcare and addressing homelessness. The 60% that does not go into schools helps students and their families by helping them with issues that affect them in the classroom.
“Mental health services, other health services, I think are important to the area and could be vastly improved with this money coming in to the communities,” Aguilar said.
Westside Union School District Board Vice President Steve DeMarzio asked if dairies, barns, food processing plants and packing houses are included in the reassessment.
“The agricultural land is exempt but fruit trees, nut trees, barns, wineries, buildings, anything that’s involved with processing, those are all reassessed to market value,” Shelly said.
Vanderzee said Proposition 15 was written so that farms can be completely exempt.
“The intent in the language and the actual language in the proposition exempts agricultural property. We have no desire to make the agricultural property have increased taxes,” she said.