Ever since Proposition 13 was passed with the support of nearly two-thirds of California voters in 1978, \u201creforming\u201d it has been a high priority for the state\u2019s powerful public employee unions and others who see California property owners as an untapped source of government spending money.<\/p>\n
And \u201csplit roll\u201d is their way in.<\/p>\n
\u201cSplit roll\u201d is a term for a property tax system that would allow higher taxes on businesses than on homeowners. The \u201croll\u201d is the county assessor\u2019s property tax roll, the list of all real estate parcels that are subject to property taxes. \u201cSplit\u201d refers to a division of the list into different types of property, such as residential and nonresidential, or homes and businesses.<\/p>\n
California has always had a single, unified property tax roll, going all the way back to the 19th century. Proposition 13 didn\u2019t change that, but it lowered the property tax rate to 1 percent from a statewide average of 2.67 percent, and it put new limits on annual tax increases. Never again would a property owner in California open a tax bill to the shock that it had increased by 10, 15 or 20 percent because property values had spiked from the year before. Increases in taxable value were generally capped at 2 percent per year until there was a change of ownership.<\/p>\n
A split-roll initiative, if passed, would begin the incremental destruction of Proposition 13. Emboldened activists have openly admitted that taxing business would be \u201cthe first step\u201d for the ultimate repeal of Prop. 13 in its entirety. They would chip away at its protections for one group and then for another, until there is nothing left.<\/p>\n
Split roll would be the log that broke the camel\u2019s back for California\u2019s beleaguered business community.<\/p>\n
The cost of living, already high in California, would be pushed even higher as the new tax bills hit every business in the state at the same time. And it would be only the first of many tax increases \u2013 without Proposition 13\u2019s cap on increases in assessed value, property taxes would rise along with real estate values in California, regardless of whether businesses had the cash flow to make those tax payments.<\/p>\n
Inevitably, businesses would be forced to cut their workforce and raise their prices, and business flight out of California would accelerate.<\/p>\n
In 2012, a study by the Davenport Institute at Pepperdine University\u2019s School of Public Policy concluded that a split roll would have a \u201csignificant and detrimental impact on the state\u2019s economy.\u201d At the time, the Davenport Institute study estimated that split roll would raise property taxes on businesses by $6 billion and would cost the California economy $71.8 billion of lost output and more than 396,000 lost jobs over the first five years alone.<\/p>\n
In 2020, the Tax Foundation found that Proposition 15, a failed attempt at split roll, introduced \u201cthe downside of greater revenue volatility without the upside of accurate, neutral valuations, since it skews property tax burdens disproportionately toward businesses\u201d and that while Prop. 15 had exemptions for small businesses that \u201cmany small businesses rent space. Their rent is likely to go up as the tax increase is passed on through rental costs.\u201d<\/p>\n
And this year, the Pacific Research Institute\u2019s economic and tax model estimated the impact of split roll would be \u201can $8 billion to $12.5 billion tax increase on California\u2019s businesses\u201d and that \u201cwithin five years, the size of California\u2019s economy could shrink between 3.4 percent and 4.8 percent relative to the baseline.\u201d<\/p>\n
Further, \u201cthe growth in the average household\u2019s income would be between $2,170 and $3,090 smaller, the growth in jobs would between 225,000 and 322,000 less, and the exodus of people from the state would increase between 46,000 and 66,000.\u201d<\/p>\n
That\u2019s probably why voters have rejected every attempt at a split roll that has been put before them. On the same ballot as Proposition 13, there was Proposition 8, which allowed for split roll. It failed. The aforementioned Prop. 15 in 2020 failed, too.<\/p>\n
Meanwhile, Prop. 13 remains as popular with Californians as it has ever been, with 65 percent of respondents in the most recent statewide poll saying it is a \u201cmostly good\u201d thing. That\u2019s because Prop. 13 works for everyone.<\/p>\n
Prop. 13 protects long-time homeowners from unpredictable increases, it protects new homeowners who would pay more than double in their first year, and it protects business owners who already have a hard enough time staying open in this state.<\/p>\n
Californians are taxed enough. Say no to split roll. Protect Prop. 13.<\/p>\n
Jon Coupal is president of the Howard Jarvis Taxpayers Association.<\/p>\n","protected":false},"excerpt":{"rendered":"Ever since Proposition 13 was passed with the support of nearly two-thirds of California voters in 1978, \u201creforming\u201d…\n","protected":false},"author":2,"featured_media":1397,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,975,2082],"class_list":["post-369134","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news","tag-opinion","tag-opinion-columnists"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/369134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=369134"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/369134\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/1397"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=369134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=369134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=369134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}