(CBS13/AP) — Proposition 15 has failed. This means property taxes on commercial properties will stay the same. Local governments and schools will not get new funding.
California voters have rejected a proposal to partially dismantle the state’s 42-year-old cap on property taxes. Tuesday’s update to the vote count showed opponents to Proposition 15 with nearly 52% of the votes.
For decades, California’s system of limiting property tax increases has been deemed sacrosanct. The system tying taxes to the most recent purchase price now faces one of its biggest challenges.
Since the 1978 ballot measure passed, sparking a national outcry for tax cuts and perhaps easing former Gov. Ronald Reagan’s path to the White House two years later, California has limited tax increases to 2% a year for inflation until a property is sold. With prices climbing at a much higher rate, taxpayers who have held homes and businesses for many years pay far less than what the market value would determine.
Proposition 15 on the Nov. 3 ballot would instead reassess commercial and industrial properties every three years, while residential property, including home-based businesses, would remain under 1978 rules.
Supporters say the “split-roll” system will go a long way toward fixing inequities that shield wealthy corporations from Disneyland to Hollywood studios, depriving property tax proceeds for public schools and local governments. Opponents call it a massive tax increase that will further cripple businesses in a pandemic-wracked economy.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)