Prop. 13 rejected but property tax battle not over

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By Vicky Boyd


Confused by its title, California voters rejected Proposition 13, a March ballot measure that would have allowed the state to issue $15 billion in new school bonds.

Voters in November will again face a measure about the original Prop. 13. This time, though, they will be asked to amend the 1978 property tax reform measure to increase taxes on business properties, including packinghouses, dairy milking parlors, wineries and processors.

As it did with the March school bond measure, San Joaquin Farm Bureau will mount a campaign to defeat the November initiative.

“Farm Bureau isn’t anti-school or anti-student,” said SJFB First Vice President Ken Vogel, who grows cherries and walnuts near Linden. “But everybody is suffering right now as far as farming. For many crops, the prices are down. For agriculture, all of the farm buildings would be taxable, and it would be a huge increase.”

He pointed to voters hurting from ever-increasing taxes and bond measure fatigue as reasons for Proposition 13’s defeat.

The Endorsement Committee, which operates under the San Joaquin Farm Bureau, passed a motion to oppose it.

“We pay enough taxes already, and this would have raised all of our property taxes,” said Kenny Watkins, a Linden area cattle and walnut producer who chairs the PAC.

Some voters also may have wondered whether the bond money would actually wind up helping schools. Vogel cited the gasoline and diesel tax increase as an example of how the state diverts funding that should have gone to one use — road construction and repairs — to other uses.

“Besides the amount of taxes, the trust in government in California I think right now is kind of low,” said Vogel, who also sits on the San Joaquin County Board of Education.

Hidden deep in the Proposition 13 wording was a provision that would have allowed local school districts to issue additional bonds, thereby also increasing property taxes.

Currently, elementary and high school districts that issue bonds cannot exceed 1.25% of the basic property valuations within the district. For unified school districts and community college districts, the limit is 2.5%.

Proposition 13 would have increased the limit for elementary and high school districts to 2% and the limit for unified school districts and community colleges to 4%.

Split-roll initiative

Nicknamed the “split-roll tax initiative,” the November ballot proposal would amend the 40-year-old Prop. 13 to create different tax formulas for commercial and industrial properties than for residential properties.

Residential and agricultural land would still be protected under Prop 13, which limits total taxes to 1% of a property’s value when it was purchased and limits tax increases to 2% annually. A property is not reassessed until it is sold.

But under the ballot measure, commercial and industrial properties would no longer be protected. Measure supporters say they also will redefine commercial and industrial structures to include barns, food processors, packinghouses, dairy milking facilities and other buildings related to food and fiber production.

As such, these operations would fall under the new taxing structure that would require a value reassessment beginning with the lien date for the 2022-23 fiscal year. County assessors would be given two years to complete the task, after which time they would reassess the properties every three years, according to ballot measure language.

SJFB President Davis Strecker said he hopes voters will weigh the current economic climate caused by the coronavirus and defeat the initiative.

“I think we have to look at what we’re now facing with the epidemic and what businesses are going to have to take on with a new tax,” he said. “It’s not like all of our businesses are flush with cash.”

Strecker said the pandemic has raised consumer’s awareness of the importance of agriculture, which should aid SJFB in educating them about the detrimental impacts of split-roll taxes.

“I think that’s going to be Farm Bureau’s role as we progress forward,” he said. “I think we’re going to have the public’s attention a lot more than we have in the past. When we’re talking about these regulations, how we’re able to use our workforce, people are going to be a lot more open that yeah, they need these tools to feed us.”

Formally known as the “California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative,” the measure is referred to as the “Schools and Communities First” Act by supporters.

Vogel compared the measure’s deceptive nickname to that of Prop. 47, the “Safe Neighborhoods and Schools Act.”

Prop. 47 supporters claimed it would save taxpayers money by reducing the incarcerated population and redirecting them to mental health and substance abuse programs. It also raised the cap for a misdemeanor to $950 from $450. Instead, crime against property is up, and jails remain overcrowded.

“Isn’t this great – a white stallion when it’s really a shaggy little burrow,” he said. Initiative supporters are highlighting the fact that residential property owners will not see a tax increase. Vogel said voters will have to be educated about the measure’s wide-sweeping ramifications.

“They’re catching the big headlines without reading the fine print and knowing exactly who’s going to get taxed and where the money will come from,” Vogel said.