Approved by California voters on June 6, 1978, an amendment to the California Constitution was made titled the People’s Initiative to Limit Property Taxation. This has long carried the name of its proposition number, Proposition 13. Verbiage from the Merced County Assessor’s website reads as follows, “Under Proposition 13, the property tax rate is 1% of assessed value, plus any bonds or fees approved by popular vote. An annual tax bill may also include other special assessments and levies, which are not property taxes and not based on assessed value.” For years, various interests have worked to remove this assessment for property taxes.
In the midst of the chaos of 2020, an initiative has been approved for the November ballot – Proposition 15: Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative. The has largely been funded by the California Teachers Association (CTA), Chan Zuckerberg Initiative and SEIU California. The tax hike will raise up to an estimated amount of $12.5 billion per year for schools, cities and counties according to Family Farmers Against Prop 15.
The initiative’s wording can be found on the California Secretary of State’s website. It reads: “Increases funding for K-12 public schools, community colleges, and local governments by requiring that commercial and industrial real property be taxed based on current market value. Exempts from this change: residential properties; agricultural properties; and owners of commercial and industrial properties with combined value of $3 million or less. Increased education funding will supplement existing school funding guarantees. Exempts small business from personal property tax; for other businesses, exempts $500,000 worth of personal property. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Net increase in annual property tax revenues of $7.5 billion to $12 billion in most years, depending on the strength of real estate markets. After backfilling state income tax losses related to the measure and paying for county administrative costs, the remaining $6.5 billion to $11.5 billion would be allocated to schools (40 percent) and other local governments (60 percent). (19-0008.)”
You’ll notice that agricultural properties are listed as exempt. Upon review, our organization has found that “fixtures and improvements” are not exempt. This means you will face an increase in taxes on a wide range of property including: fruit and nut trees, vineyards, fences, barns, processing plants, dairies, irrigation systems, silos and tanks, storage sheds, feedlots, dams, paved roads, wind machines and much more.” This has been sourced from the Assessor’s Handbook (CA State Board of Equalization) and can be found on the fact sheet that we have listed on page 11 of the Farm News. The above has also found not to be exempt by the Legislative Analyst Office which is a nonpartisan and independent body. The initiative will also increase taxes for businesses that support agriculture including warehouses, farm equipment dealers and transportation companies.
I do not need to tell you how detrimental this will be to local and state agriculture, but this will impact others as well. Assessors from throughout the state have also spoken up and said this will be a large impact to them and our local offices are no different. Not only will the number of assessors be increased which will be hard, but the space and equipment will need to be increased.
Please do not take this issue lightly and believe that our organization is not in the least. Review the documents on page 11 and reach out to your friends and family – both involved and not involved in agriculture. More information can also be found at www.cafarmersagainstprop15.com. Reach out to our office should you have questions and know we will not be quiet on this issue.