A 2020 Ballot Initiative Aims To Change The Rules When It Comes To Property Taxes
We want to tell you about a property tax measure that’s coming up on the November 2020 ballot. It has its share of big backers but opponents say it will burden businesses and county assessors. The goal of the measure? To help recoup the loss of funding to schools and public services that was the result of a controversial proposition passed 41 years ago.
One Associated Press report from 1978, the year Prop 13 passed, pointed out that property taxes were rising at an alarming rate for some residents in California.
“For many here, there was hardly a choice. The property tax burden had become unbearable. House taxes on this home last year were a weighty $1,900 a year; this year they would have tripled.”
Prop 13 limited when homes, businesses and farms were appraised, and the rate at which property taxes could be raised. For properties that stayed in the same hands without any changes, their tax could only increase by about 2 percent a year.
While burdened homeowners were ready for a tax break, the Associated Press reporter asked one family if they worried about how lower taxes would mean less funding for schools and public safety.
“Those are all hysteria, political tricks, I feel,” a member of the Whittemore family said. “I realize there will be a hardship but what it means is we are going to have to work harder.”
Sue Thornton says the loss of funds wasn’t a hysterical political trick. She remembers having to ration paper in her classroom.
“You were allowed one ream of paper per week I believe. I eventually went to my principal and I said, you know, I’ve got 180 kids,” she recalls. “I can't even give them three sheets of paper, I can’t give them a two page test.”
Thornton spent 25 years as a science teacher at Thomas Jefferson Middle School in Madera. She says she often spent her own money on materials, or repurposed items like film canisters for science labs.
Which is why groups like the California Teachers Association, League of Women Voters, and even Mark Zuckerberg’s philanthropic initiative are supporting a new measure to change some of rules enacted by Prop 13. The ballot initiative doesn’t have a shortened name yet, but the Secretary of State website says it “requires certain commercial and industrial real property to be taxed based on fair-market value,” and “dedicates a portion of any increased revenue to education and local services.” It leaves residential properties alone but it brings high-value commercial and industrial property taxes up to market values.
“This tax is not on everybody. It's on a limited number of businesses,” says Helen Hutchison.
She’s president of the California League of Women Voters. She helped the measure qualify for the November 2020 ballot, and says it could generate up to $10 billion.
“We do pass taxes on a regular basis when there are services that we can see that we need,” she says. “We all live in communities that, we have potholes, we have schools without enough money, the classes are too big, teachers are not paid well.”
Despite the revenue this measure could bring, there’s local opposition.
Fresno County Administrative Officer Jean Rousseau says he doesn't want the measure to pass. If it fails, he says, “I think from a business environment standpoint, it would help our competitiveness.”
Rousseau notes that increasing property taxes might dissuade business from coming here, since the state also has high utility rates, and a higher minimum wage. For existing businesses, he argues the added costs would trickle down to the consumer.
Another concern comes from tax appraisers like Marilyn Tanaka. She fears the measure will lead to a massive backlog in her office with the Fresno County Assessor-Recorder. As a senior appraiser, she’s already busy enough.
“I could go see ten properties in one day, but then I go back to the office and start writing them all up, and filling in and checking all those boxes off,” says Tanaka. The process of calculating an assessment, collecting and filling out the proper paperwork could take up to a week for each property.
Right now, her team does appraisals when a commercial property is being sold or under construction. She’s usually notified when the owner submits a permit, but she also makes mental notes whenever she sees construction in her day-to-day life.
“I try to drive by and see what kind it is,” she says, pointing to a building under construction along Herndon. “It’s concrete block in the back and it looks like it's a shed roof.”
If she were appraising this building, these are the details she would notice.
If the measure passes, it could mean appraising hundreds more properties like this a year, which her team of six appraisers just can’t handle. So she’s making this plea to the Fresno County Board of Supervisors:
“Please give our office more money to be able to get the employees to do all the necessary assessments that we would have to do,” says Tanaka. “Because it’s going to just be so much.”
Tanaka says the job of an appraiser is unique. It takes up to five years to train someone, and that usually happens on the job. So if the Fresno County Assessor-Recorder’s Office is to prepare for the passage of this ballot initiative and increased appraisals, Tanaka says hiring should have already started.
Rousseau says he recognizes the bind the county assessor’s office is in, but at the moment, the county has to prioritize hiring more employees in the sheriff and public defenders offices, thanks to two lawsuits.
Fresno County’s Administrative Office will put out a proposed budget by June 30, and it’s unlikely to include a windfall for the Assessor-Recorder’s office. So Tanaka’s wish is unlikely to come true anytime soon.