California’s Proposition 15 is an amendment to the state constitution that would update how the state assesses property taxes.
Now, since 1978, property taxes have largely been viewed as a third rail in state politics. That’s when Proposition 13 passed. It rolled back property values for tax purposes to 1976 levels and froze them there. Increases were capped at two percent annually, unless a property was sold. Once a sale happened the new property tax was assessed as one per cent of the purchase price.
If Proposition 15 passes, the state will start basing its property tax assessment on the current market value of a property. This could mean a significant jump in state revenue, since property values tend to appreciate more than 2% annually.
But there’s a big catch: the change in the taxation formula would only apply to commercial and industrial real estate, with a few exceptions. Residential properties would be exempt.
The state’s Legislative Analyst’s Office projects Proposition 15 could increase state revenue up to $12 billion every year. Most of that money would go directly to cities, counties and special districts. But a big chunk — averaging $3.5 billion a year — would be earmarked specifically for schools and community colleges.
The two groups spending the most on Proposition 15’s passage are the California Teachers Union and SEIU. The proposition has received endorsements from national political figures, including both Joe Biden and Bernie Sanders. It also has a long list of supporters at the state and local level.
The proposition is opposed by the California Business Roundtable and the California Chamber of Commerce, among others.
So to recap, a vote for Proposition 15 would change how most commercial and industrial property taxes are calculated throughout the state. A vote against Proposition 15 would keep those property taxes as they are.