CalChamber Opposing Newest Initiative Plan to Hike Tax Burden on Commercial Property

OpposeThe California Chamber of Commerce Board of Directors has voted to oppose an initiative proposal to impose a “surcharge” of up to 1% on targeted properties.

The measure, the Property Tax Surcharge to Fund Poverty Reduction Programs, has been cleared to seek signatures to qualify for the November 2016 ballot.

If approved by voters, the initiative will fund state tax credits, health programs and education programs with the revenue from the property tax “surcharge.”

Initiative proponents have until March 21, 2016 to submit no fewer than 585,880 signatures.


“This proposal is a completely inappropriate use of property taxes in California,” said CalChamber President and CEO Allan Zaremberg. “Since its inception, the property tax has been used to fund local government services. By diverting local property taxes to fund state programs to end poverty, the proposed surcharge will hurt police, fire, special districts and other programs that depend on the property tax.

“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.”

CalChamber Leads Opposition

The CalChamber expects to take a leadership role in working to ensure the initiative is defeated. The CalChamber position on the initiative is consistent with its previous opposition to all proposals that would increase the tax burden on commercial properties. 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.

Higher Rents

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 include:

• The initiative will create a targeted tax on high-value property.

• Ambiguities in drafting will likely lead to litigation.

• Uncertainty will be created regarding the application of the surcharge on commercial property.