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Californians Are Faced with Billions in New Taxes
Voters have rejected higher property taxes time and again, but the politicians keep trying. Proposals for property tax increases are under consideration right now in Sacramento that proponents claim will solve our budget problems. But take a closer look:
Property tax increases will only hurt California consumers, seniors and taxpayers and further damage our state’s struggling economy.
Billions in new taxes:
- One of the tax proposals in question – known as a “split roll” – would increase property taxes – including those on local shopping centers, family-owned and neighborhood restaurants, apartment buildings, medical buildings and more – by removing, or “splitting” business property taxes from Proposition 13 protections. Prop. 13 was passed by voters in 1978 to curb rapidly increasing property taxes. At that time, some property owners faced a 50% to 100% tax increase in just one year!
- Under split roll, business property could be reassessed to an estimated “market value” more often and/or could be taxed at a higher rate. Market value would become a subjective standard determined by each county assessor’s opinion of value.
- The non-partisan state legislative analyst estimated that a 2005 reassessment attempt at split roll would have increased property taxes by $3.5 billion each year.
- Voters understand the negative impacts of billions in new taxes and have rejected split roll ballot initiatives twice before!
Small businesses will be hurt:
- Small businesses will likely be the first to feel the split roll pinch. As property taxes rise by billions a year, these increases will be passed on in the form of higher rents for tenants – including small local businesses like gas stations, dry cleaners, coffee shops, family-owned restaurants, and auto repair shops, to name a few.
- Already cash-strapped small businesses will have to pass on their costs to consumers, lay off workers, or shut their doors completely.
- Health care facilities like private hospitals, clinics and dentist offices that typically rent office space will also see their tax bills increase due to split roll.
Consumers will pay:
- The billions in new taxes under split roll will be passed on to consumers through even higher costs for goods and services, including food and gas.
Senior citizens will pay:
- Senior citizens and others on a fixed income will bear the brunt of the effect of split roll as they struggle to pay for a variety of products including gas, groceries and neighborhood services.
Renters will pay:
- Rental and lease costs will rise dramatically as taxes on apartment buildings and rental homes rise.
More harm than good:
- Commercial properties already account for 60 percent of the local property taxes. This is in addition to the other taxes the property owners must pay, including payroll, equipment and income taxes. Adding to the tax burden of businesses that keep our state moving in the right direction will only make our economy worse and will aid other states like Nevada and Arizona that seek to lure California’s best companies into their much more business-friendly environments. We can’t afford to damage our economy and lose jobs, especially during economic downturns like the one we are facing now.
- Split roll will chip away at Proposition 13, which has protected California property owners from skyrocketing taxes for 30 years!
Would encourage more wasteful spending:
- California state revenues have increased by $25 billion over the past five years – yet due to wasteful spending the state budget is still over $15 billion in the hole! Shouldn’t California end wasteful spending habits before asking taxpayers for more of our hard-earned dollars?
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