By Mark Powell
Voters got it right this election and rejected the deceptively named “California Schools and Local Community Funding Act” — also known as the “Split Roll Tax Initiative” — that would have triggered the closure of even more businesses across San Diego County.
If Proposition 15 had passed, small business owners would have struggled to keep afloat due to massive spikes in their rents caused by what would have been a colossal property tax increase.
The act was an ill-advised, special-interest property tax increase and would have most likely led to some of the same economic and housing problems that famous Proposition 13 corrected. We are in the process of recovering from the world’s worst pandemic in over 100 years, and the voters realized that now was not the time to increase taxes.
Ironically, politicians and special interest groups who advocate for affordable housing were pushing for the passage of Prop. 15, the largest property tax increase in the history of the state.
Even though the ballot title was misleading, voters saw through the harmful repercussions that would have adversely affected residential property values. But without a doubt, proponents of the initiative will be back and will took for other ways to derail Prop. 13’s long-established protections.
Prop. 15 was essentially a tax increase that would have effectively ended Proposition 13 protections for businesses, creating a “split roll” for property tax assessment. Touted as a boon for schools and local communities, this measure was actually a veiled attempt by various levels of government and special interests to methodically destroy Prop. 13 protections for homeowners.
Make no mistake about it — the removal of Prop. 13’s protections for single-family homes would have been next on the chopping block.
Organizations such as the Regional Hispanic Chamber of Commerce, the San Diego Regional Chamber of Commerce and even the NAACP, Coastal Branch were against Prop. 15. They recognized that any property tax increase on commercial businesses will be passed onto business owners who generally pass the increase onto customers, unfairly affecting the poor, seniors on fixed incomes, and minority business owners.
Prop. 15 was forecast to bring an additional $6.5 billion to $11.5 billion in funding to local governments and schools. Since California cannot simply print more money, the tax would have been paid by us, the consumers, through higher prices on goods and services.
Passage of Prop. 15 would have also resulted in the loss of more jobs due to business closures. Sixty percent of restaurants that shut down during the pandemic are now closed for good, according to a recent report from Yelp. The restaurants and mom-and-pop businesses that managed to endure the coronavirus shutdown are having a hard enough time surviving.
If voters had passed Prop. 15, neighborhood strip malls across San Diego County would have had a much tougher time meeting their financial obligations, and the few businesses that survived the pandemic could have been forced to close permanently due to increased rents.
The desire to better educate our students is obvious, but what we need are innovative solutions to address our struggling schools, such as career technical education internships, community volunteers in the classroom, and parental empowerment through school choice programs. The need for good schools must be balanced by smart economic decisions, and the ramifications of undermining Prop. 13 will always outweigh any perceived benefits.
Splitting the tax roll would have shifted the tax burden onto consumers who are already taxed enough, making homes ever less affordable throughout San Diego County. When a different version of Prop. 15 appears on a future ballot, let’s hope the voters get it right again.
Mark Powell is a vice president on the Greater San Diego Association of Realtors. The opinions expressed in this article are the author’s own.