California voters have rejected Proposition 15, a ballot measure that sought to force large businesses to pay higher property taxes but likely fell victim to concerns about its economic impact on employers and consumers amid the pandemic-sparked recession.
The defeat, projected by the Associated Press on Tuesday, came with unofficial results showing almost 52% of votes were cast against the measure — a level of opposition that remained consistent through the early counting of ballots on Nov. 3 and the week that followed. While returns won’t be certified until early next month, the AP analysis concluded that there are unlikely to be enough ballots remaining to change the outcome.
“California voters understood the very real threat Proposition 15 presented to small businesses, farmers and consumers,” Allan Zaremberg, president of the California Chamber of Commerce, said in a written statement. “Voters in California smartly recognized that enacting the largest tax hike in California history would have been devastating to jobs, our economy and California’s future competitiveness.”
Since its inception, Proposition 15 was a fight about a different ballot measure — Proposition 13, the 1978 landmark initiative that created a tight cap on property values and tax rates. The new proposal’s supporters spent years crafting their plan to strip high-value business properties from the protections provided by Proposition 13, arguing that it had allowed powerful corporations to avoid paying property taxes they could easily afford. The November ballot measure could have generated as much as $11.5 billion a year for public schools and local government services once fully implemented.
Where Proposition 13 sets the value of a property by its purchase price and caps the annual tax at 1% of the value, Proposition 15 would have generated new tax revenue by allowing more frequent valuations of commercial and industrial property holdings worth $3 million or more. Some lower-valued properties would have also been swept into the system because their owners have large portfolios of property across California.
Proposition 15 was explicit in its protection of residential property tax rules, though some of its opponents ominously warned that it was the first step toward a complete overhaul, or outright repeal, of Proposition 13. Read from source….