The False Premises and Promises of the
push for Split Roll

I guess desperate times call for desperate measures.

But I am keeping my fingers crossed that California voters, already living in the highest taxed state in the nation, will see through the political antics of the desperate.

In 2018, some of California’s largest labor organizations and civil rights groups filed an initiative to raise taxes on businesses by removing their Proposition 13 protections and creating a split roll property tax system.

They spent over $3 million to collect over 855,000 signatures to qualify the initiative for the ballot. Polling showed that their initiative would most likely go down in flames, so they decided to file a new initiative with some minor changes that polled better.

Proponents will now need to collect almost 1 million signatures at a cost that could go beyond $5 million.

Sound desperate yet?

They’ve already had some help from state Attorney General Xavier Becerra, who changed the wording in the new initiative from “tax increase” to “increasing funding for schools and local services by changing tax assessments.”

Kind of like putting lipstick on a pig.

This second initiative is now on the street and in front of grocery stores in your neighborhood looking for signatures.

The higher-tax crowd is hoping that this new language will sway you to not only sign the petition and get it on the ballot for November 2020, but will persuade you to vote for it as well. They are willing to pay millions to make that happen. Please don’t sign it.

A split roll property tax system, which removes Prop. 13 protections from commercial properties, is bad news for California taxpayers.

It will result in fewer jobs and reduced wages as well as raise prices for most anything we buy in a store or services we use in our daily lives.

I am always surprised when people state that they don’t care if businesses have to pay higher taxes.

The problem is that businesses won’t be paying the increase — we will. Think about every business you walk into: grocery store, nail salon, movie theater, restaurant, dog groomer, gas station, car dealership, big box retailer, even your accountant’s office.

Each and every business will be passing this $11 billion tax increase down to the consumer. The exemption that proponents are touting for small businesses is practically worthless. This is not just an attack on “big corporations.” It will impact just about every business in California.

The estimate today is a loss of close to 400,000 jobs in a state that is already ranked dead last for businesses. And the irony is that the authors themselves seem to understand this will hurt small business owners.

The initiative itself has language that allows for some small businesses to defer the tax increase to give them time to find a new place to lease, stating that they recognize “that the impact of this measure will be different for each property.”

That’s code for, “Sorry your lease is being raised, hurry up and move your business to a new location, most likely in another state.”

One of the biggest red herrings used by Prop. 13 opponents is the argument that there is a loophole that helps businesses get around being reassessed when they are sold. The irony to that argument is if there is a problem, it isn’t with Proposition 13, but with the California Legislature itself.

Prop. 13 did not define the term “change of ownership” when it was overwhelmingly passed by voters in 1978. The Legislature did that later. And if Sacramento wanted to change that definition, they could.

Orange County Sen. Pat Bates has been trying for years. She has authored legislation year after year, only to watch her bills die in committee.

The authors of the split roll initiative state that California has a funding shortfall. Apparently they believe we don’t send Sacramento enough of our money.

The facts don’t support this. Tax revenue to Sacramento has never been higher. The 2019-2020 California general fund budget is $144.2 billion, an increase of $20 billion over the 2017-2018 budget.

I don’t know about you, but “funding shortfall” is not a term I would use when describing the California budget. Will they ever have enough?

Prop. 13 has protected all Californians for over 40 years. Whether you own a home, rent an apartment, or shop in a brick and mortar business, Prop. 13 has kept property taxes at a sane level for everyone.

Don’t kid yourself into believing that this initiative will only hurt big business.

This is just the first step in an effort to eliminate Prop. 13 completely.

Reprinted from Orange County Register
By CAROLYN CAVECCHE 
PUBLISHED: November 1, 2019 at 5:49 pm | UPDATED: November 1, 2019 at 5:49 pm
Carolyn Cavecche is CEO and president of the Orange County Taxpayers Association.

Governmental Affairs Committee