California Tax Increase on Corporate Real Estate Initiative (2010)

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A California Tax Increase on Corporate Real Estate Initiative (09-0077) did not qualify for the 2010 ballot in California as an initiated constitutional amendment. It would change the California Constitution to require that commercial property be re-assessed for property tax purposes at least once every three years.

Initiative 09-0077 was filed by Roberta B. Johansen and Karen Getman on November 5, 2009. The California Attorney General gave 09-0077 a ballot title and summary on January 5, 2010. It has a signature deadline of June 4, 2010.

A similar initiative, Proposition 167, failed in 1992.

Ballot summary

The official ballot summary says, "Changes existing law to require that commercial property be assessed at fair market value at least once every three years. Excludes residential and agricultural property. Doubles homeowners’ tax exemption from $7,000 to $14,000 on residential property. Creates small business tax exemption for first $1,000,000 in personal property. Permits county governments to offset reassessment costs; transfers ninety percent of remaining revenues to state’s General Fund to support all General Fund programs, including education, public safety, and health care."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office says, "Additional net state General Fund revenues of about $3 billion annually and additional local government revenues of about $400 million annually when the measure is fully implemented in 2014-15. Increased state funding for K-12 schools and community colleges of about $2 billion annually when the measure is fully implemented."

Phil Ting

San Francisco Assessor Phil Ting filed paperwork with the state in May 2009 to register a committee called the "Close the Proposition 13 Loophole" committee.[1]

Ting said at the time that he believes the state constitution should be amended to allow the imposition of higher property taxes on real estate owned by California businesses. He said there are different ways to assess higher taxes on businesses and he didn't yet know which way he prefers. Possibilities include a different property tax rate for businesses, or re-assessing the value of property owned by businesses more often.[1] Whether Ting's group will support Initiative 09-0077 has not been publicly announced.

Business versus residential

The concept of two sets of property tax calculations, one for commercial and industrial businesses and one for residences, is sometimes referred to as the "split roll" idea. It has been described as "limit[ing] or eliminat[ing] the rights of businesses to keep their property taxes down, as homeowners do.[2]

Lenny Goldberg, director of the California Tax Reform Association, says of the current system that is it ."..completely unenforceable." His organization supports moving toward a split roll.[3]

References


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