Property Tax Hike Initiative Won’t Be on November Ballot

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OpposeProponents of a California Chamber of Commerce-opposed plan to increase taxes on commercial property to fund poverty reduction programs have called off efforts to place the initiative on the November ballot.

The initiative proposes a “surcharge” of up to 1% on targeted properties to fund state tax credits, health programs and education programs.

Trying Later

One of the initiative proponents, former Board of Equalization member Conway Collis, said the 2016 ballot has become too crowded with too many revenue-raising measures on it, according to The Sacramento Bee. Collis said it makes more sense to try to qualify early for a later ballot and that proponents also will see if their approach should be modified before refiling the measure.

“That’s one less new tax to worry about for now,” said CalChamber President and CEO Allan Zaremberg, who was prepared to help lead the campaign to oppose the property tax surcharge, in keeping with the CalChamber’s longtime opposition to proposals that would increase the tax burden on commercial properties.

Inappropriate Use

Zaremberg has previously pointed out that the Property Tax Surcharge to Fund Poverty Reduction Programs is “a completely inappropriate use of property taxes in California.”

Since its inception, the property tax has been used to fund local government services.

“By diverting local property taxes to fund new state programs, the proposed surcharge will hurt police, fire, special districts and other programs that depend on the property tax,” Zaremberg said. “Moreover, this property tax surcharge would add to California’s status as having the most burdensome tax structure in the nation, including the highest personal income tax, corporate tax, sales tax, and, under this proposed initiative, property tax. It will derail further economic growth, particularly in parts of the state where people continue to struggle.”

Job Killers

In the last five years, the Legislature has introduced three bills that would have created a so-called “split roll” for property taxes. The CalChamber opposed those bills as job killers.

In voting last December to oppose the property tax surcharge, the CalChamber Board expressed concern that higher taxes on rental properties will likely create higher rents for businesses and rental property residents should the measure pass.

Additional concerns included the fact that the initiative would have created a targeted tax on commercial property and created uncertainty in its application.

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