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May 21, 2020

WG Opposes “Split Roll” Calif. Ballot Initiative

At the direction of the WG board of directors, the association will oppose the “split roll” initiative set to appear on the California ballot in November 2020.

Currently, there are two versions of the ballot initiative. The first version, the California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative, qualified as an initiated constitutional amendment on October 15, 2018.

On April 2, 2020, the campaign Schools and Communities First, which is behind the proposal, reported filing 1.7 million signatures for a revised version of the ballot initiative. At least 997,139 signatures need to be valid. The campaign has stated they will not withdraw the qualified initiative from the ballot until the revised initiative qualifies.

Both versions of the ballot initiative would amend the state constitution to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, partially overturning Proposition 13, which passed in 1978. Residential properties would continue to be assessed based on purchase price.

Proposition 13 requires that residential, commercial, and industrial properties be taxed based on their purchase price. The tax is limited to no more than 1 percent of the purchase price, with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower.

In announcing the organization’s opposition to the “split roll” initiative, WG President and CEO Dave Puglia issued the following statement:

“By repealing Proposition 13’s protections for restaurateurs, farmers, and other business property owners, the split roll initiative would add to the already-painful number of businesses closing forever in the wake of the COVID-19 economic shutdown. For those hanging on, this initiative would increase the attractiveness of locating their businesses to other states and countries. 

“Regardless of the current crisis, the split roll initiative represents bad public policy. If passed, commercial and industrial properties will face unpredictable, potentially massive annual tax increases as our economy begins to recover. This is terrifying for every business owner struggling to pay bills and make payroll.

“The split roll initiative also will result in higher taxes owed by the packing, processing and cooling facilities that are essential to the fresh produce business. Farmers with permanent crops, such as tree fruit, grapes and tree nuts, would be hit with higher taxes on those investments, as well.

“We will look to play an active role in helping California voters see the dangers in this initiative.”