Will Prop. 13 Tax Revision Help or Hurt Central Valley? Leaders Debate.

Central Valley leaders are taking sides on Proposition 15, the initiative to roll back some of the property tax protections provided by the famous Prop. 13 of 1978.

Supporters say Prop. 15 will close a loophole in the tax system and help schools and communities. Opponents say it is a Sacramento money grab.

“We know that our schools have been devastated now, especially with the pandemic,” Yes on 15 campaign supporter and legendary labor rights activist Dolores Huerta said in a Zoom teleconference with media.

“We need that funding. We want it to come from the people that have the wherewithal — that they have the money to pay their taxes. And now it’s time to join with the rest of us.”

Prop. 13, the revolutionary anti-tax measure, capped the increase on property taxes to 1% a year, among other things.

Unlike Prop. 13, This Calls for Split Roll Tax

If voters approve the initiative on Nov. 3, protections on the tax hikes on business properties will be removed. Home properties will remain protected. The system is known as “split roll.”

Commercial properties would be taxed based on market value. A state analysis estimates it would raise up to $12 billion in revenue. Supporters say it would mean $145 million for the Central Valley.

The state would receive the first cut of revenues generated to “supplement decreases in revenue from the state’s personal income tax and corporation tax due to increased tax deductions,” according to the attorney general’s analysis.

The remainder would be split, with 60% funding local governments and 40% to schools.

Supporters: Justice and Equity

Three local school board members, Veva Islas with Fresno Unified, Daren Miller with the Fresno County Board of Education, and Deep Singh with Central Unified all made similar arguments — Prop. 15 will help fund schools and the community.

“This would allow reinvestments to low-income communities and communities of color,” Islas said. “We have had too much disadvantage.”

Islas said Prop. 15 would alleviate the “burden” that communities have seen from COVID-19, racial injustice, and wildfires.

Proposition 15 supporters say the added funding from commercial property taxes will alleviate the burden on communities created by COVID-19, wildfires, and economic inequality. (The Salinas Californian/David Rodriguez)

Prop. 15 Will Hurt Consumers, Olivier Says

Clint Olivier, the former Fresno city councilman now executive director of the BizFed Central Valley, says the proposition’s passage would hurt consumers.

“The people who are being taxed do not just shrug it off and say, oh well, we’re being taxed more. They have to raise prices,” Olivier said. “In this case, it will be the leases for their (business) tenants who will consequently not eat the cost of the new taxes, but will pass those costs on to their customers.”

Olivier said the proposition was written pre-COVID, when California’s economy was zooming. But, with the pandemic and its economic unknowns, now is the wrong time for a tax, he said.

Miller says it is fair to propose a new tax now.

“(Corporations) are utilizing our equity from our educational systems for the students to come out and work for them. They’re using our roads. They’re using our police and safety services. We’re just asking them to pay their fair share at the same time that we do,” Miller said.

Olivier is skeptical about the government’s ability to wisely use tax revenues: “They always want more.”

Disagreement on Effect on Ag Industry

Huerta emphasized that Prop. 15 would exempt commercial agriculture property. But several of the state’s farm bureaus have publicly opposed the measure.

“I’m assuming that some of the agricultural organizations that are against Proposition 15 were also against … the right to organize, they were against unemployment insurance. They were against the disability insurance for farmworkers. They were against laws for child labor. And, so I don’t know what their reasoning is. I would have to speak to them individually. But unfortunately, they’re often on the wrong side of progress,” Huerta said.

Fresno County Farm Bureau CEO Ryan Jacobsen disagreed on how the revisions would affect farming. He says “anything beyond the dirt” would be subject to a tax increase including barns, dairies, wineries, processing plants, vineyards, and orchards.

“The proponents of the measure are being very misleading. It makes it look like ag’s not affected. But we are dramatically affected with the proposal,” Jacobsen said.

Jacobsen is also concerned Prop. 15 might incentivize local governments to rezone ag land into commercial or industrial spaces.

Proposition 15 opponents say that it will burden growers with higher taxes and could lead to ag land being rezoned for intensive commercial uses. (Shutterstock)

Ballot Title Battle

There is controversy over Prop. 15’s ballot title: “Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.”

The No on 15 campaign sued state Attorney General Xavier Becerra — who writes the ballot titles — saying what will appear in front of voters is unfair.

The opponents did not prevail, but the case is under appeal.

“They are fiddling with the English language to make this appear to voters as a mechanism to better fund schools. It’s always about the children. It’s always about the kids. But the reality is, it has nothing to do with that. This is a money grab. By the elites in Sacramento,” Olivier said.