YES ON PROP 15

The Schools & Communities First Funding Act

The COVID-19 crisis has put a spotlight on how over 40 years of under-funding of public services have hurt communities across California. Despite the state, counties, cities, and school boards allocating emergency funding to meet the immediate needs of our communities, the crisis has put a strain on public services already struggling from big corporations not paying their fair share in taxes.

Proposition 15: The Schools & Communities First Funding Act will close the corporate tax loopholes, and reclaim $10-12 billion a year—funding that will build stronger communities and go toward hospitals, schools, first responders, and all the vital services we’re relying on to get us through this crisis – and beyond.

Learn what you can do to get Proposition 15 passed in November.

Here’s the problem:

Corporate Property Tax Loopholes

A $10-12 billion a year loss for our schools and communities.
A $10-12 billion a year tax break for big corporations.

In 1978, a ballot measure was passed to cap property taxes, so that increases on property assessments was limited to 2% each year, and property taxes were limited to 1% of the assessed value, until a home was sold.

This measure—known as Prop 13—helped homeowners keep home ownership affordable. Under Proposition 15, nothing changes here. Unlike commercial property, houses are sold frequently, which means new homeowners pay a lot more in property taxes than big corporations.

But, this measure also opened loopholes for big corporations to exploit and avoid paying their fair share in taxes. Unlike homeowners, big corporations own a lot of land and rarely, if never, sell it. This allows them to keep money that should be going toward funding our schools and communities as profit.

Corporations have pushed the tax burden onto the rest of us

Before Prop 13 was passed, the share of property taxes that fund public schools and other public services was about 55% for homeowners and 45% for corporations.

Today, the share has become lopsided with homeowners carrying much of the tax burden at 72%. While corporations are contributing a record low in taxes, they’ve been enjoying record profits at the expense of working families whose salaries and wages haven’t kept up with the increasing cost of living.

If you’ve been wondering why, in the wealthiest state in the country, we’re 47th in the country in per-pupil spending, or why we’ve been so ill-prepared with medical supplies and equipment during the COVID-19 pandemic, this is a big reason why.

The Opposition: Debunking Their Scare Tactics

Massive out-of-state corporations, special interests and Trump’s biggest donors are all bankrolling the opposition to Prop 15.

These are the same wealthy corporations that avoid reassessment by employing highly paid tax lawyers and accountants to exploit loopholes in the law.

Now they are engaged in deceptive scare tactics to hold onto their loopholes. A judge even removed more than 100 words from their proposed ballot argument for “false or misleading” scare tactics!

Here are the facts confronting their dishonest scare tactics:

The facts: Prop 15 closes the costliest corporate property tax loopholes in California history.

  • Prop 15 is a fair and balanced reform that closes nonresidential commercial property tax loopholes benefiting wealthy corporations at the expense of schools and essential services in our local communities.

  • ​The most expensive 10% of nonresidential business properties account for 92% of Prop 15’s loophole-closing revenues. Prop 15 targets loopholes benefiting the wealthiest corporate owners of California’s most expensive corporate properties.

  • Prop 15 keeps business property taxes below most other states by maintaining Prop 13’s low 1% limit on business property tax rates. By contrast, for example, commercial property in Dallas Texas is taxed at 2.56% of market value.

The facts: Prop 15 provides a tax cut for most small businesses.

  • Prop 15 cuts small business taxes by completely eliminating the business personal property tax small businesses pay on their equipment, computers and fixtures.
  • ​Prop 15’s specifically exempts all businesses operated out of the home, which accounts for more than half of all small businesses (source: California Department of Industrial Relations).
  • Prop 15 also exempts small businesses owning nonresidential commercial property worth $3 million or less.
  • Prop 15 is phased in over three or more years so small businesses potentially threatened with rent increases will have time to pursue better alternatives. If landlords try to raise rents after Prop 15 passes, they will risk losing their tenants to the many landlords who will have no reason to raise rents because their property taxes won’t have changed.

The facts: We as consumers, homeowners and renters already pay the price every day for these corporate loopholes.
  • Big corporations and wealthy investors that are abusing the tax system charge the same prices as businesses that are paying their share.
  • If wealthy corporations try to raise prices when Prop 15 closes their loopholes, they will lose customers and end up paying the price themselves.
  • When wealthy property owners don’t pay their share, the burden falls on us. Since Prop 13 passed in 1978, the residential share of property taxes has skyrocketed from 55% to 72% while the share of property taxes paid by nonresidential commercial property has declined.
  • We’re also being nickeled and dimed by other fees and taxes that have increased from 28% of local government’s own revenues in 1978 to 51% of local revenues today.

The facts: The text of Prop 15 makes clear this is completely false.

  • Prop 15 amends the California Constitution (Article XVI, Section 8.6(f)) to require that all local education agencies, community colleges, counties, cities and counties, cities, and special districts that receive funds from Prop 15 shall publicly disclose for each fiscal year, including in their annual budgets, the amount of property tax revenues they received for that fiscal year as the result of Prop 15 and how those revenues were spent. 

    • Such disclosure shall be made so that it is widely available to the public and written so as to be easily understood.

  • It’s laughable for the opposition to talk about accountability. Their campaign is largely funded by secretive special interest groups that don’t even disclose who serves on the boards of their organizations.

    • There certainly isn’t accountability for the billions of dollars in property tax loopholes that we are paying to large corporations.  

    • While we don’t know where it is going, we do know where it isn’t: to pay their share of property taxes to support our schools and essential services in our local communities.

The facts: Prop 15 prevents Sacramento politicians from diverting any of its new revenues from schools or local communities, places responsibility on local schools and communities to set their spending priorities, and makes those decisions fully transparent so voters can hold their local leaders accountable for their decisions.
  • Prop 15 amends the California Constitution (Article XVI, Section 8.7(b)) to state that Prop 15’s new money for schools and community colleges shall not be subject to appropriation, reversion, or transfer by the Legislature, the Governor, the Director of Finance, or the Controller for any purpose not specified by Prop 15 nor shall these revenues be loaned to the General Fund or any other fund of the State or any local government.
  • Prop 15 ensures that new revenues going to cities, counties and special districts are allocated the same way as other property tax revenues and consistent with Proposition 1A approved by 84% of voters in 2004 and Prop 22 approved by 61% of voters in 2010 to protect local property tax revenues from raids by Sacramento politicians.

The facts: The text of Prop 15 makes clear this is completely false.

  • Prop 15 retains full Proposition 13 protections for homeowners and renters.
  • To be sure these protections cannot be tampered with, Prop 15 places its protections exempting all residential property in Section 2.5 of Article XIII A of the California Constitution.
  • Prop 15 further protects homeowners and renters by restoring balance and fairness to the property tax. Since Prop 13 passed in 1978 the residential share of property taxes has increased from 55% to 72% while the commercial portion has declined despite the massive growth of California’s economy. Prop 15 closes corporate loopholes and rebalances the scales.

The facts: Prop 15 is a fair and balanced reform that closes loopholes benefiting wealthy corporations while keeping business property taxes well below most other states and encouraging start-ups and small businesses by cutting their taxes.

  • Prop 15’s corporate opponents know the “job killer” scare tactic isn’t true. They hired biased consultants to write a report attacking Prop 15, but even these hired guns had to admit that Prop 15 would create a net of 20,000 new jobs.

  • Prop 15 keeps California business property taxes very competitive with other states by maintaining Proposition 13’s low 1% limit on business property tax rates. A recent national study comparing commercial property taxes in the nation’s 50 largest cities demonstrates that after Prop 15 passes:

    • California business property tax rates in our 8 largest cities will be far below the national average of 1.98% of fair market value for the nation’s 50 largest cities.

    • Commercial property tax rates in all 8 of California’s largest cities will be far below Dallas Texas at 2.56% of market value, Phoenix Arizona at 2.57% and Portland Oregon at 2.46%. 

  • Prop 15 encourages start-ups and small businesses by eliminating the property taxes small businesses pay of their equipment, computers and fixtures.

  • California schools rank last in the nation in class sizes and school counselors per student. That’s the real threat to California’s economic future and the well-being of our children and grandchildren. Prop 15 makes sure wealthy corporations are paying their fair share of local property taxes. The property tax is the number one source of local revenue for our schools and we will all better off when everyone pays their share.

The COVID-19 crisis has revealed the worst effects of the tax loopholes

During these difficult times, the tax loopholes that have led to chronic under-funding of public services are having a devastating effect on front line workers, students, and working families.

Not enough personal protective equipment for front-line workers.

Inequitable access to internet and laptops for students.

Not enough hospital beds and ventilators, and inequitable health care access.

Proposition 15 will…

Reclaim Funding

If passed, we will reclaim $10-12 billion every year for our local schools and communities by ensuring that corporations pay their fair share in taxes based on what their commercial properties are actually worth.

Not Raise Taxes

Prop 15 will not raise taxes on homes, apartments, and other residential properties. Homeowners and apartment owners will not be affected. It only affects commercial property owners that have not been paying their fair share.

Help Small Businesses

Prop 15 will provide tax relief by exempting small businesses with properties worth $3 million or less. It will also eliminate the burdensome business personal property tax allowing small business owners to grow their businesses and provide more goods and services to our local communities.

Ensure Transparency

Every dollar restored to California’s schools and local communities will be fully accounted for and open to public scrutiny. Plus, Prop 15 ensures that funding will be equitably distributed to schools and students that need it the most.

Help reclaim $10-12 billion annually for schools and local communities. Get involved.

Collect Signatures

DONE!

Signature collection was completed and submitted on April 2. In total, the coalition collected 1.7 million signatures to qualify the measure for the November 2020 ballot. SEIU Local 99 members collected 10,153. Great job, members! Read more here.

Make a Commitment

Make a commitment to vote “Yes” for reclaiming funding for our schools and communities. If you’re not yet registered to vote, register now. If you think your registration status is outdated, check its status and re-register if you need to.

Tell Others

Every vote counts. Educate your friends, family, and co-workers about why we need to reclaim lost funding for our schools and communities, make big corporations pay their fair share, and how passing Prop 15 is the way to go.

Share Your Experience

Are you a school worker and/or a parent who can talk about the effects of under-funded schools? Do you remember a time when things were better? What’s changed? 

COLLECT SIGNATURES

DONE!

Signature collection was completed and submitted on April 2. In total, the coalition collected 1.7 million signatures to qualify the measure for the November 2020 ballot. SEIU Local 99 members collected 10,153. Great job, members! Read more here.

MAKE A COMMITMENT

Make a commitment to vote “Yes” for reclaiming funding for our schools and communities. If you’re not yet registered to vote, register now. If you think your registration status is outdated, check its status and re-register if you need to.

TELL OTHERS

Every vote counts. Educate your friends, family, and co-workers about why we need to close the loopholes, make big corporations pay their fair share, and how passing Proposition 15 is the way to go.

SHARE YOUR EXPERIENCE

Are you a school worker and/or a parent who can talk about the effects of under-funded schools? Do you remember a time when things were better? What’s changed? 

[layerslider id=”31″ /]

Frequently Asked Questions about Proposition 15

Proposition 15 is a statewide initiative that we are working to qualify to be on the November 3, 2020 ballot in partnership with other organizations. In order to qualify, we need to collect 1.4 million signatures from registered California voters. If it qualifies and passes, it will reclaim $10-12 billion per year for California’s schools, community colleges, health clinics, and other vital local services by closing California’s loophole in corporate property taxes.

The initiative protects homeowners, renters, agricultural land, and small businesses, while reclaiming the billions of dollars in tax breaks to millionaires, billionaires and big corporations that have drained our schools and communities of funding for the last 40 years.

The $10-12 billion per year that the measure would generate would go to schools, including increased student support staff and teachers, smaller class sizes, building improvements, and more resources for the classrooms. Funds would also go to fund services in our local communities including libraries, parks, housing, fire prevention and safety, emergency services, senior centers, and health clinics.

About 40% of the $10-12 billion will go to education and the remainder will go to our local cities and counties. The education funding generated by Proposition 15 will be placed in a special state fund and will be in addition to Prop 98 funding for K-12 schools and community colleges. The rest will go to local cities, counties, and special districts based on current property tax distribution guidelines. These local governments will use the funding for local trauma centers, fire fighters and other first responders, libraries, parks, housing and other public services.

Proposition 13 was a ballot measure passed in 1978 that froze property values to the 1975 assessed value. Property tax increases were limited to no more than 2% per year as long as the property was not sold. When sold, the property was reassessed at the sales price, and then the 2% annual limit then applied to future years.

Prop 13 provided important protections for homeowners especially seniors living on fixed incomes and Proposition 15 will not change these protections. It fully exempts residential properties from reassessment.
Proposition 15 will only close the corporate tax loophole created by Prop 13 that has cost California hundreds of billions of dollars over the past 40 years, and forced massive cuts to our schools and other public services.

No. Proposition 15 does not touch homeowner property taxes and only addresses the corporate commercial property tax loophole. Proposition 15 reaffirms and strengthens protections for residential properties, protecting homeowners and renters. Homes, apartments, mobile homes, senior centers, and even hotels that have been converted into housing for the homeless will not be affected. Residential properties zoned as commercial/industrial will not see tax increases. And homes that are used for small business, such as childcare, will not see tax increases. In fact, investing in roads, schools, parks and local services will help homeowners by increasing their property values.

This initiative is about closing a corporate tax loophole in order to restore desperately needed revenue to our schools and communities. Prop 13 will remain in place for homeowners and renters – all residential property. However, right-wing groups like the Howard Jarvis Association are scaring homeowners into believing that this commonsense reform will take away their protections to ensure ultra-rich corporations can continue to get an $10-12 billion tax break every year.

No. Homes that are used for small business, such as childcare, will not see any tax increases. In fact, the Proposition 15 Act clearly exempts independent businesses with fewer than 50 employees from being reassessed.

No. Proposition 15 will not raise taxes on homes, apartments, and other residential properties. It only affects corporate commercial property.

Proposition 15 is not a new tax. It does not change the property tax rate for the average homeowner. It fixes the corporate tax loophole in Proposition 13 by assessing commercial property at fair market value.

Prices for groceries, gas, clothing and other items are determined by the market not by property taxes. In other words, prices are set by how much consumers are willing to pay. It’s also important to know that the majority of businesses in California will not be impacted by Proposition 15. Only a fraction of legacy companies that have owned their land for decades currently benefits from the corporate tax loophole. Small businesses will get tax relief and all business will benefit from investments in local communities and public safety.

The Proposition 15 Act only targets billionaires and wealthy corporations to pay their fair share to fund our schools and public services. Average homeowners and small businesses will not be affected. This measure also provides funding for both schools and other public services such as housing and health care. And, instead of creating funding with an expiration date, this proposition will provide stable, long term funding by finally fixing the broken tax system.

The California lottery raises about $1 billion a year for K-12 schools, community colleges, CSU and UC campuses. While it’s a big amount, this accounts for only 1.5% of what our public schools need because public education has been so underfunded in CA for so many years. Additionally, because no tax-payer dollars are used to fund the lottery, money from the sale of lottery tickets is also used to run the program and pay the jackpots.

Proposition 15 protects and helps small businesses by exempting small business from property tax reassessment. Small businesses are defined as independent, California-based businesses having 50 or fewer full time employees. It also creates an even playing field for small businesses in California by making sure legacy companies and out-of-state investors that have owned their land for decades and have been paying outdated property taxes pay their fair market value like everyone else.

No. Proposition 15 will lead to job creation and a stronger economy. It will lead to increased investment, better land use decisions and increased funding for schools, roads, parks and other services in local communities, creating more high-paying jobs as a result.

Proposition 15 has strict accountability measures to ensure that the state and local school districts, cities and counites report on how the money is being spent. Since this is local money, it’s up to us to hold our elected officials accountable to prioritizing our community’s needs.

Furthermore, the language in the measure ensures that money for schools will be distributed based on the Local Control Funding Formula (LCFF). LCFF is California’s school funding formula that directs extra funding to high need students, which includes students living in poverty, English learners, and foster youth. Because of this, the entire $10-12 billion will be given to local communities and school districts to use for important services in our neighborhoods.

Proposition 15 will help spur better land use decisions and more housing development. There are three key ways that Proposition 15 will support housing and smarter economic development:

  • Smarter land use. Under the current system, it costs absent landlords virtually nothing to hold under-developed or vacant land, driving up the cost of land and housing. Reassessing commercial property regularly will free up that land. It will also end the fiscalization of land use, where cities make land-use decisions based on what is expected to generate higher tax revenue, leading to more land being used for big box retail stores and auto malls rather than housing.
  • Spur Housing Development. Proposition 15 will free up commercial property for mixed-use development, lower land values to expand housing development, and increase revenue for affordable housing and homeless services.
  • Strengthen local communities. When neighborhood schools and other local services are improved, our communities will benefit and homeowners will see their property values increase. Regular re-assessment would incentivize absent landowners to develop their land or sell it, resulting in more land being used for housing and neighborhood services.

Massive corporations like Chevron and Shell will spend tens of millions of dollars to ensure that they get to keep their unfair tax break while our schools and communities continue to be underfunded. Opponents include the Howard Jarvis Taxpayers Association and the California Business Roundtable, two right-wing organizations that consistently advocate for wealthy corporate landowners and against working families and our communities.

[facebook-page-plugin href=”Schools1stCA” width=”470″ height=”800″ adapt=”true” tabs=”timeline” cover=”true”]

Paid for by Service Employees International Union Local 99