San Francisco Chronicle

Effort to change Prop. 13 revised in bid for passage

- By John Wildermuth and Joe Garofoli

A 2020 ballot initiative that would dramatical­ly change Propositio­n 13, California’s landmark property taxcutting measure, is being pushed aside by its backers in favor of a revised plan they believe will have a better chance of passing.

Like the measure that backers hope to replace, the new initiative would split the property tax roll, keeping the Prop. 13 tax limits for residentia­l, small business and agricultur­al property, but eliminatin­g those limits for most highdollar commercial and industrial buildings and land.

Prop. 13’s restrictio­ns on taxing properties such as shopping centers, office buildings and factories “have starved funding for schools and local communitie­s,” said Tyler Law, a spokes

man for the “Schools & Communitie­s First” initiative. “We are refiling the initiative to substantia­lly strengthen the measure ... and widen the path to victory in November 2020.”

Like the original measure, the new one would lead to more frequent reassessme­nts of commercial and industrial property. Limiting such reassessme­nts was a key feature of Prop. 13, which voters passed in 1978. Under it, property is reassessed only when it changes hands.

In practice, that has resulted in more frequent reassessme­nts for residentia­l property. Large commercial properties often remain under one owner for decades, meaning that some are still taxed based on 1970s assessment­s.

The new measure, which was submitted to the state attorney general Tuesday, pushes back the start date for the program, changes language to ensure that every school district receives a share of the estimated $11 billion windfall anticipate­d from the tax changes, strengthen­s tax relief for small businesses and toughens zoning language “to ensure large corporatio­ns cannot avoid reassessme­nt,” Law said in a statement.

The move means that supporters of the splitroll plan are committed to running an expensive effort to qualify a new initiative, even though the measure it would replace has already qualified for the November 2020 ballot.

That’s not a sign of confidence, said Rob Lapsley, president of the California Business Roundtable and cochair of California­ns to Stop Higher Property Taxes, which opposes changing the rules for commercial property taxation.

“The refiling of this shows that their first measure was fatally flawed,” Lapsley said. “And this one is equally flawed. ... People do not like the idea of changing Prop. 13.”

But while voters have been adamant about protecting the tax limits on residentia­l property, recent surveys suggest they don’t feel the same way about commercial property. In an April poll by the Public Policy Institute of California, 54% of likely voters said they would support the change.

That 54% is good, but not great, news for splitroll supporters, and opponents suggest it wouldn’t translate into a 2020 victory.

“Our studies suggest the tax measure has a very, very tough row to hoe,” said Jon Coupal, president of the Howard Jarvis Taxpayers Associatio­n, a group named after the man behind Prop. 13. “This is an $11 billion tax increase, and why would people vote for it at a time California is flush with cash?”

While a February 2018 report on the original splitroll initiative by the nonpartisa­n legislativ­e analyst estimated it would bring the state $11 billion in new revenue, the new measure’s changes could trim that amount. Both versions would split the new money between schools and local government.

Splitroll backers now have to begin a new drive to get their initiative on the ballot. And while they needed 585,407 valid signatures to qualify the original measure, the huge turnout for the 2018 governor’s race boosted the needed number to 997,113 signatures. They must gather that total by April 21 to make the November 2020 ballot.

“It’s going to take them a chunk of cash to get that done,” Lapsley said. “It shows you they were kind of desperate, because they’re spending that kind of money.”

Splitroll backers spent about $3.5 million to collect signatures for the original measure. With the higher signature count and the relatively short time frame, it’s going to be an expensive propositio­n.

The original measure will stay on the November 2020 ballot, at least until the revised version qualifies, Law said.

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