Santa Barbara County supervisors vote to support controversial Prop. 15

After roughly two-dozen comments from the public and a lively debate, the Santa Barbara County Board of Supervisors voted on Sept. 15 to symbolically support a controversial state ballot measure that would change California’s current property tax assessment formula. 

Proposition 15 will be on every Californian’s ballot in November, and if passed, it would amend the California Constitution and ensure that commercial and industrial properties are taxed based on their fair market value. Residential properties, property used for commercial agriculture, and properties owned by those with $3 million or less in holdings in California would be exempt from the changes outlined in Proposition 15. 

Under California’s current tax system—which was passed as Proposition 13 in 1978—all residential, commercial, and industrial properties in California are taxed based on their purchasing prices, with the tax limited to no more than 2 percent each year.  

Although opponents say Proposition 15 would increase costs for business owners already hurting amid the COVID-19 pandemic and resulting economic downturn, supporters, including 1st District Supervisor Das Williams, say it would close Proposition 13’s loopholes and even the playing field for small and new businesses.

“I fundamentally agree with the goal of Prop. 13, which was to keep people in their homes,” Williams said at the meeting on Sept. 15. “I do not think that the majority of the electorate who voted for Prop. 13 meant to provide tax exemptions for commercial properties that are over $3 million.” 

Williams said as it stands now, California gives preference to older businesses that are passed down through generations of families and large corporations that might have purchased a property decades ago and are still paying taxes based on that price. Meanwhile, up and coming business owners hoping to buy a property now would have to pay significantly more. 

Plus, Williams said Proposition 15 would generate revenue for schools and governments that are currently hurting financially. 

The California Legislative Analyst’s Office estimates that Proposition 15 could generate between $7.5 billion and $12.5 billion in additional revenue each year statewide, according to a county staff report. A little less than 60 percent of that would go toward local jurisdictions, and roughly 40 percent would go toward schools and community colleges. An estimated $51 million—not including revenue for schools—would go toward local Santa Barbara County jurisdictions. 

“We ask a lot of our education systems,” Williams said at the meeting on Sept. 15. “We ask this all of our schools and yet we do not give them the resources necessary to perform these tasks. And of all times when schools need help, now is most conspicuous because to even be able to provide basic education services to all students requires not less resources but more.”

But 5th District Supervisor Steve Lavagnino said including schools as recipients of revenue generated by Proposition 15 is likely just a ploy to get votes. 

“First off, only 40 percent of the money goes to schools,” Lavagnino said at the meeting. “If you named it the California pension backfill initiative I don’t think it would get much traction.” 

Lavagnino said Proposition 15 actually would impact small businesses. Most small business owners rent commercial space from large corporations, he said. If those corporations have to pay more in property taxes, they’ll increase rent, and small businesses will have to either eat the cost, close down, or push the cost onto consumers. 

The Santa Maria Valley Chamber of Commerce, Grower-Shipper Association of Santa Barbara and San Luis Obispo Counties, and Santa Barbara County Farm Bureau agree, and all oppose Proposition 15. 

Lavagnino and 4th District Supervisor Peter Adam voted against supporting the measure, but were outnumbered by the three other board members.  

“It’s a really bad idea at probably the worst possible time ever,” Lavagnino said, “You have a small business that’s trying to make it through a pandemic. And they’re finally coming up and getting their head above water. They’re coming up from their third time of drowning and instead of throwing them a life preserver, you’re throwing them a brick or an anchor.”

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