California voters narrowly rejected a ballot question to partially dismantle the state’s 42-year-old cap on property taxes. Proposition 15 failed to reach the majority vote needed to pass on Tuesday night, according to the Associated Press.
Proposition 15, a measure backed by organized labor to fundamentally change the way California calculates property taxes for commercial and industrial real estate and generate revenue for schools and local government services, failed Tuesday night.
Proposition 15 represented a wish by liberal Democrats, ever since the landmark tax-cutting measure Proposition 13 passed in 1978, to create a so-called "split roll" — splitting off commercial and industrial property from residential and farm land for the purpose of calculating taxes.
Currently, all property in California is taxed by the Proposition 13 formula, based on 1% of the purchase price with an annual increase of no more than 2%.
“From day one, we knew that if voters understood the harm this deeply flawed tax hike would impose on California’s economy and its families, farmers and small businesses, voters would reject this ill-advised effort,” said Rob Lapsley, president of the California Business Roundtable, in a statement. “Today’s victory should send a clear message to the proponents and warn all politicians that voters will continue to reject attempts to dismantle Prop 13.”
Supporters of Proposition 15 said the current tax system created by Proposition 13 was sold to voters as a way to protect homeowners, not corporations. They argued that businesses unfairly benefit, in part by taking advantage of a “loophole” that allows them to avoid having property reassessed, even when it’s sold, by limiting ownership of any individual or group to less than 50%.
