California will vote on a major change to Proposition 13

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A ballot measure asking California voters to remove property tax assessment limits for commercial and industrial properties has qualified for the November 2020 ballot.

The "split roll" measure would be a fundamental shift to limits imposed in 1978's Proposition 13, which caps the amount property tax assessments can rise in any given year, unless a property is sold.

Secretary of State Alex Padilla announced on Monday that the initiative had qualified for the ballot.

This year marks the 40th anniversary of the measure approved by voters in 1978. It set a base property rate of 1% assessed value and capped annual assessment increases at 2% or the rate of inflation, whichever is lower.

A recent poll by the Public Policy Institute of California found voters divided on the issue with 46% in favor and 43% opposed.

“Support for this idea is at its lowest point among likely voters since PPIC began asking this question in January 2012. Today, a majority of Democratic likely voters (53%) are in favor, compared to fewer independents (45%) and Republicans (34%). Likely voters age 18 to 34 (57%) are more likely than older voters to favor this proposal (47% 35 to 54, 41% 55 and older),” according to the Institute.

The Legislative Analyst’s Office estimated in February that such a change would bring in additional property tax revenues of $6 billion to $10 billion annually.

If voters approve the initiative, about 60% of that money would go to local governments and the remaining 40% to schools and local community colleges. It would also reduce the amount of money the state would be required to send to school districts to meet per-student funding minimums.

The 2020 initiative would tax commercial properties according to their current market value but would not lift Proposition 13’s limits on residential properties—creating a “split roll” tax system.

The coalition of labor groups and community organizations that support the initiative announced in February they were delaying the measure until the 2020 election in order to have time to better explain the measure to voters.

It also gives the opposition more time to marshal its resources.

The Howard Jarvis Taxpayers Association, which has made protecting the landmark law limiting property taxes its primary mission, has already come out strongly against the initiative.

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