USC Poll: Voters Favor Eliminating Prop 13 for Business

The Associated Press
Newport Beach, CA

USC Poll found that a majority of California registered voters would back a 2020 initiative to eliminate Prop 13 benefits for commercial property owners.

The latest USC Dornsife/Los Angeles Times poll found that 54 percent of California registered voters now favor eliminating Proposition 13’s protections against unlimited increases for industrial and commercial owners. With about $60 billion per year currently collected in property taxes, eliminating Prop 13 protections for businesses would generate another $6.5 to 10.5 billion in property tax revenue each year, according to the non-partisan California State Legislative Analysts Office.

Rather than the property taxed on the market value of a parcel like almost every other state, California’s property tax rates are based on a property parcel’s purchase price under the 1978 voter initiative Proposition 13. Each property owner’s annual property tax bill is equal to the taxable value of their property—or assessed value—multiplied by the maximum property tax rate of 1 percent, plus any smaller local-voter-approved rates to finance infrastructure.

The property’s taxable value can only increase each year by a maximum of 2 percent or the rate of inflation, whichever is lower. This process continues until the property is sold and again is taxed at its purchase price. The market value of most properties has grown faster than 2 percent per year, resulting in the taxable assessed value of most California commercial, industrial and residential properties being less than their market value.

Democrats legislators and governors have blamed the current property tax system for the high variability of California’s annual tax revenues. Ever since the Proposition 13 initiative passed in 1978 with a 65 percent yes vote on a massive 69 percent voter turnout, Democrats have feared trying to overturn the popular law would be like touching the “third rail” of an electric train and politically being electrocuted by voters.

But when the USC Dornsife / LAT poll asked a scientifically selected 691 registered voters survey asked the question if voters would support a “split roll” initiative in 2020 that would only remove Prop 13’s protections for larger commercial and industrial properties based on their market values rather than purchase value, 64 percent of Democrats favored the initiative and just over one-third of Republicans would support it, according to the Los Angeles.

Democrats had originally intended putting split roll on the 2018 ballot, but decided to wait until 2020 after the Howard Jarvis Taxpayers’ Association quickly collected more than 150 percent of the signatures necessary to qualify a ‘Reject The Gas Tax’ initiative on the November 2018 statewide ballot.

Breitbart News reported that according to the same USC Dornsife / LAT poll, 51 percent of registered voters now favor voting to dump the 12-cent-per-gallon gas tax increase first enacted by the Democrat-controlled legislature in 2017. Only 38 percent are in favor of preserving the tax; 9 percent say they do not know enough about the issue yet, and 2 percent have no opinion. The margin of error was 4 percent.