California PropertyTax

The Proposition 15 “Split-Roll” property tax would force many California businesses, owned by business property owners and renters alike, to literally go out of business, or relocate to a state that actually  welcomes business investment and doesn’t believe in stifling businesses with egregiously high commercial property taxation.   

The California Legislative Analyst’s Office has repeatedly warned state and local politicians that if this new property tax ballot initiative passes the entire state will most likely experience increases with respect to business operating costs all across California… and that this is also likely to influence business owners in terms of deciding whether or not to spend good money after bad in this state, or to simply pack it up and call it a day… and relocate to another state.   This is, one might say, not an attractive picture to envision for such an important state as California. 

This Split-Roll tax that California politicians want does not include any form of accountability or watchdog measures to protect California taxpayers…  There are no cost controls, no fixed requirements to produce transparency in order to avoid corruption or illicit over-spending while no one  is minding the store! 

These Split-Roll property tax supporters, typically critics of property tax relief at all costs, even removed a stop-gap on administrative expenses — so government management staffers can waste this new tax cash on overhead such as salary increases, lavish benefits and vacations, and such… with no limits or checks and balances whatsoever.  Let’s face it, something is entirely wrong with this picture.

Moreover, this property tax initiative will change the official tax assessor’s process of review for all types of properties — from a solid objective system to an arbitrary up and down mess, as we had prior to 1978 in California.  That sort of arbitrary, unpredictable tax system will lead to subjective, unpredictable property assessments. Endless, expensive legal appeals; and a rising tide of overspending on the bureaucratic side.

Let’s face it, additional property tax revenue at this level is not even needed… California taxpayers have payed into and built a Mount Everest high mountain of state and local tax cash since Proposition 13 began.  More than $240 billion just this year alone!  Next year, our competent Governor Newsom predicts a budget surplus of $21 billion!

Since Proposition 13 passed in 1978, local tax revenue (adjusted for inflation) has gone up by nearly 55%. That equals approximately $90 Billion in new spending requirements, even after another 17 million residents are added to the mix, along with accelerated cost of living in California.

These property tax revenues are not needed to accomplish what must be accomplished in this state.  California has all-time high revenues coming in, plus a significant surplus.  The type of surplus, for example, Bill Clinton would have solidified, were it not spent by the spendthrift administration that followed him.  A similar surplus formula is in motion in California as well, since the state’s local inbound government revenue is at a record high level. 

In fact, when Proposition 13 was passed into law in 1978, allowing heirs of estates and trust beneficiaries to transfer parents property taxes, with a parent to child transfer, upon inheriting property from parents, hence inheriting property taxes at a low base rate – local property tax assessments were over $6 Billion!  In fact, California state economists now confirm that local property tax has increased by over $19 Billion over the past ten years; starting at $50 billion in 2008–2009 during the  recession, to nearly $69 billion by 2019.

At any rate, beneficiaries and heirs of estates were all of a sudden   able to keep parents property taxes instead of suffering devastating tax hikes from arbitrary reassessment.  In fact, being able to avoid  property tax reassessment altogether.  While maintaining parents’ low Proposition 13 property tax rate and in 1986 with the advent of Proposition 58 and being able to buyout property shares inherited by  co-beneficiarties, being able to retain that low tax base forever after any property tax transfer from parents, which estate attorneys still refer to as a parent to child transfer or “parent to child exclusion” — which you are also most likely familiar with by now.       

Point being — an egregious property tax increase in California in Nov. 2020 from a Split-Roll tax, through the decidedly deceptive stripping down of  the 1978 Proposition 13 tax cap protection for commercial property owners — avoiding property tax reassessment for business and commercial as well as manufacturing facilities, office buildings, malls, multi-rental properties, so on and so forth.

Basically, this type of property tax relief unraveling is just simply not needed by local California government revenue collectors, in order to maintain a sound economy going forward, for the state of  California.

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