Authors: Jeff Moore, President, NAIOP SoCAL Chapter & Justin McCusker, Legislative Chair, NAIOP SoCAL Chapter
Living in California is no easy task. From the sky-high taxes to the unbearable cost of living, it’s certainly not making the American Dream easy to achieve. The Golden state leads the nation with the highest gas tax, state income tax and state sales tax. It also has one of the highest costs of living. And, if special interests have their way, California’s last taxpayer protection – Prop 13 – could be removed.
Prop 13 was passed overwhelmingly by voters in 1978 to bring certainty to residents and businesses, allowing them to predict and afford their property tax bills long into the future. The measure put a halt to skyrocketing property taxes by capping annual increases for both business and residential property at two percent a year. It also calculates general property taxes based on one percent of the purchase rather than market value, protecting property owners and local governments from the booms and busts in the real estate market.
But now those protections that have provided certainty to California homeowners, renters, businesses and local governments could soon be whittled away.
Last fall, a measure qualified for the November 2020 ballot that is a direct attack on Prop 13’s protections for California businesses. It would raise property taxes on commercial and industrial property by $11 billion a year and require reassessment at current market value every three years starting in 2020-21. This would create a new base year for every business property in the state, not only hurting business owners, but also jobs, the economy and consumers.
For example, when businesses face higher property taxes, they are left with very few options to cope with the dent to their pocketbook. Many businesses will simply pass on the higher property taxes to consumers, increasing costs on everything we buy and use, including groceries, fuel, utilities, day care and health care. Other businesses may not have any other choice but to lay off employees, move out of state or shut their doors.
Even worse, if the measure passes next November, proponents will come after Prop 13 protections for homeowners next. And, when property taxes increase, so do monthly housing costs, making homes more expensive to own, rent and build. This will only make California’s housing crisis worse, not better. We should not be increasing taxes that ultimately make the cost of living even more expensive, especially when California’s homeless rate is among the highest in the nation.
At the same time, California has a $22 billion budget surplus and more than $36 billion in general and special fund reserves. Now is not the time to be raising property taxes by $11 billion a year on California businesses, ultimately hurting working families just trying to make ends meet.
Please join NAIOP SoCAL in opposing the $11 billion property tax increase that will be on the November 2020 ballot. You can sign up to oppose the initiative and make an online contribution at: www.StopHigherPropertyTaxes.org Your help is greatly needed.
Jeff Moore is the President of NAIOP SoCAL Chapter. Justin McCusker is the legislative chair of the NAIOP SoCAL Chapter.