To our BOMA OC Colleagues:
Re: No on Prop 15
Proposition 13 protections for commercial properties are under attack. The impact of this will be far reaching and hurt every sector of the commercial real estate industry as well as negatively impact almost every business, consumer and the California economy.
This November 3, 2020, Proposition 15, written to dismantle Proposition 13 protection for commercial properties, will be on the ballot. If we allow Proposition 15 to pass, it will be the largest property tax increase in California history – $12.5 billion in additional taxes estimated the first year, increasing at least every three years, and levied in perpetuity.
BOMA Orange County is reaching out to its membership for support to ensure the defeat of Proposition 15. We are providing you with information to share with every business you know so that we are all aware of the negative impacts and repercussions that can occur if we do not defeat Proposition 15.
What you need to know:
- If passed, Proposition 15 would eliminate Proposition 13 protection from office, industrial and retail properties.
- Proposition 15, commonly referred to as the “split roll tax,” would split commercial and residential tax policies, requiring reassessment of all commercial properties at current market value every three years.
- If passed, Proposition 15 will more than double the current property tax collections, with that bill entirely falling on commercial property owners. These taxes would go into the general fund or general budget with no accountability to taxpayers.
- Higher property taxes will get passed on to the tenants which in turn will be paid for by consumers in the form of increased costs on just about everything people buy and use.
- California already bears some of the nation’s highest tax rates with significant barriers to entry for new business. Raising taxes on commercial property, especially in the midst of a global health crisis and economic downturn, creates significant obstacles to economic recovery.
- Because of COVID-19, small businesses are already struggling. Proposition 15’s higher property taxes will mean soaring costs at a time when federal and state governments are trying to provide small business with rent relief to keep their doors open. And since labor costs account for one of the largest costs for most businesses, it is unlikely that those businesses will be able to pay those taxes without cutting jobs.
- Studies report that increasing property taxes on businesses will hurt female-and minority-owned businesses the most.
You can make a difference. Vote no on Proposition 15 this November. Make everyone you can aware of the devastating effects of Proposition 15. Share this information through your forums and social media platforms.
Proposition 13 has helped all Californians for more than 40 years because property taxes for both residential and business properties are calculated based on 1% of their purchase price and annual increases are capped at 2% per year. Proposition 13 provides certainty and predictability for all of us no matter the ups and downs of economic cycles. Going forward, that certainty will be crucial to our industry and state’s economic recovery.
Sincerely,
Your Team
BOMA OC Governmental Affairs