A measure known as "Split Roll Initiative" has qualified for the November 3, 2020 ballot which would dismantle Proposition 13 by splitting residential and commercial, increasing property taxes for industrial and commercial properties.
Dear California Self Storage Owner/Operator,
Since 1978 Proposition 13 has protected California property owners from dramatic property tax burdens by limiting the extent of reassessments ever since. These benefits have encouraged investments, stability and employment within the self storage industry, as well as all commercial, industrial, agricultural, residential and other real estate sectors in our state. For the first time in more than four decades, these incentives, to business owners specifically, are vulnerable to a ballot measure which will amount to a massive tax increase to you unless we are successful in defeating it.
The California Self Storage Association (CSSA) along with the national Self Storage Association encourages all California owners to support efforts to maintain Proposition 13, which will be voted upon in November through a measure confusing named “ CA Schools & Local Communities Funding Act” (better known as “Split Roll”). As long-time and involved members of the SSA and CSSA, we have been asked by the leaders of these two organizations to research and recommend the best options for self storage owners to collectively defend our industry ahead of this historic vote.
We have determined that our efforts are best directed towards Sacramento-based Californians to Stop Higher Property Taxes, a coalition that also includes: California Chamber of Commerce, California Business Roundtable, California Business Properties Association, California Taxpayers Association and the Howard Jarvis Taxpayers Association, among others.
This is not the time to take a passive approach. The cost to your businesses will be devastating; not only does Proposition 13 cap increases on annual assessments to 2 percent, after the market value assessment at its last change of ownership, it also limits the amount of local property taxes to 1 percent of the initial market value, among other protections. Upon enactment, the Split Roll will result in tax increases on your properties many times the amount of your current assessments. Although the most long-tenured businesses stand to lose the most, even the most recent entrants will be affected immediately and at the mercy of tax assessors forever more.
We believe a contribution of several thousand dollars, per facility, is a fraction of the annual cost to your businesses. Although Spilt Roll will be conveyed as “tax reform” meant to support education and other services, the truth is the tax increase is meant to fund union pensions and other questionable government spending resulting from decades of poor policy decisions by state and local governments. Please find attached more information about the Californians to Stop Higher Property Taxes and a remittal form to help you join this important fight.
CEO, A-1 Self Storage San Diego, CA
C- Chair, SSA/CSSA Property Protection Task Force
CEO, Devon Self Storage Emeryville, CA
C- Chair, SSA/CSSA Property Protection Task Force
CSSA & SSA encourage contributions to “Californians to Stop Higher Property Taxes” which will lead public advocacy, polling, and other initiatives in support of our industry.
CSSA and SSA are a part of this coalition which includes CA Chamber of Commerce, California Business Roundtable, California Business Properties Association, California Taxpayers Association and the Howard Jarvis Taxpayers Association, among others.
Checks can be made out to:Californians to Stop Higher TaxesID: 1403027455 Capitol Mall, Suite 6Sacramento, CA 95814
Or CLICK HERE for donation remittal form
California’s Proposition 13 protects property owners from dramatic property tax assessments and rate increases. The National Self Storage Association and the California Self Storage Association need your participation and contributions in efforts to defeat a November ballot measure, known as Split Roll, which would repeal Proposition 13. (click here for full article)
• In November, for the first time in 4 decades, Prop. 13 as we know it may be repealed via statewide vote.
• Although the lengthiest-tenured properties will be affected most, even the most recently owned will see dramatic increases.
• If passed, your property tax treatment will increase immediately and be subject annually, with assessment adjustments to “market value” every three years.
• Sold to voters as tax reform to fund education, this massive tax increase is actually meant to fund unreasonable government and union pensions.
• SSA & CSSA encourage contributions to “Californians to Stop Higher Property Taxes” which will lead public advocacy, polling and other initiatives in support of our industry.
• Coalition includes: CA Chamber of Commerce, California Business Roundtable, California Business Properties Association, California Taxpayers Association and the Howard Jarvis Taxpayers Association, among others.
Checks can be made out to:
Californians to Stop Higher Taxes
455 Capitol Mall, Suite 6
Sacramento, CA 95814
Fact Sheet (Click Here for Myth vs Fact Sheet)
Background: Prop 13 Has Helped All Californians for More Than 40 Years
For more than 40 years, Prop 13 has provided certainty to homeowners, farmers and businesses that they will be able to afford their property tax bills in the future. Under Prop 13, both residential and business property taxes are calculated based on 1% of their purchase price, and annual increases in property taxes are capped at 2%, which limits increases in property taxes, especially when property values rise quickly.
Split-Roll Property Tax Measure Destroys Prop 13 and Makes Our Economic Crisis Worse
Amid an unprecedented economic crisis, special interests submitted petitions to qualify a measure for the November 2020 statewide ballot that will destroy Prop 13’s property tax protections and will be the largest property tax increase in California history. The measure will raise taxes on commercial and industrial property by requiring reassessment at current market value at least every three years. This type of property tax is known as a “split-roll tax” because it splits the property tax roll, assessing business property differently than residential property.
We should reject this measure and maintain Prop 13 protections that have kept property taxes affordable and provided every taxpayer who buys a home or business property with certainty that they can afford their property tax bills in the future. Now is not the time to raise taxes and bring more uncertainty to businesses and all Californians.
Hurts Small Businesses and Drives Up Everyone’s Cost of Living
Small businesses are already struggling. This measure will make it even more difficult for them to reopen their doors or stay in business as a result of this economic crisis. Increasing property taxes on businesses by $12.5 billion a year will hurt female- and minority-owned businesses the most and 120,000 jobs will be lost, according to a Berkeley Research Group study. Voters are being asked to consider a measure that will only increase job losses at a time when millions of Californians are applying for unemployment benefits.
Most small businesses rent the property on which they operate. The measure’s higher property taxes will mean soaring rents at a time when the federal and state government is trying to provide small businesses with rent relief to keep their doors open. Ultimately, the measure’s tax hike on businesses will get passed on to consumers in the form of increased costs on just about everything people buy and use, including groceries, fuel, utilities, day care and health care.
California’s cost of living is already among the nation’s highest. A split-roll property tax will drive the cost of living even higher.
No Taxpayer Protections, Transparency or Accountability
This measure has no accountability to taxpayers. Sacramento politicians can divert the new local government tax money for other purposes that benefit special interests, just like they are trying to do with the gas tax.
The split-roll measure is misleading. Supporters say the property tax increase is about more money for schools, but more than two-thirds of the new tax money doesn’t go to schools. Instead, it goes to the state and local governments to spend however they want – just like they are doing with the lottery.
Homeowners Are Under Attack
If businesses lose their Prop 13 protections, homeowners will be next. Supporters of the measure even admitted that this initiative was the first step in a plan to end Prop 13, which could mean skyrocketing property tax increases for all California homeowners.
Ad paid for by Californians to Save Prop 13 and Stop Higher Property Taxes, sponsored by California homeowners, taxpayers, and businesses Committee major funding from
Portfolio Media. Inc. | 111 West 19th Street, 5th floor | New York, NY 10011 | www.law360.com Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | email@example.com
Calif. Property Tax Ballot Measure Resubmitted With Changes
By James Nani
Law360 (August 13, 2019, 8:29 PM EDT) --
Supporters of a 2020 California ballot measure that could change how large commercial and industrial properties are taxed and increase property tax revenues by billions resubmitted the measure on Tuesday with changes to help more small businesses, organizers said.
The Schools and Communities First campaign, the organizing group behind the ballot measure, said it would refile the initiative Tuesday with the secretary of state to change several elements of the proposal. Those changes include new implementation dates, more tax relief for small businesses, “clarified education financing” and new language to try to stop large businesses from avoiding reassessment, according to the group.
The group's spokesman, Tyler Law, said the new measure has the same intentions as the previous initiative and that California's way of taxing commercial and industrial property “has starved funding for schools and local communities, disadvantaged small and startup businesses, and exacerbated our housing crisis.” Refiling the measure means supporters will need to gather enough signatures statewide to get the measure on the ballot.
“A robust statewide signature-gathering organization began prior to the 2018 election, but the ultimate submission and qualification process placed the initiative on the 2020 ballot,” Law said. “As a result, we are refiling the initiative to substantively strengthen the measure, including expansive new small-business tax relief, and widen the path to victory in November 2020.”
The new measure includes what the group said is a clarified definition of a small business and increases a reassessment exemption for small-business owners with property valued at $3 million or less. The first measure set the threshold at $2 million.
The new measure would also delay reassessment for at least three years for buildings occupied at least 50% or more by small businesses, according to the group. The new measure also includes unchanged from the previous proposal, a proposal to exempt certain small businesses in California from the business personal property tax.
The measure was filed Tuesday afternoon, but an official version wasn't immediately available. Tyler Law provided a copy to Law360.
In October 2018 the California secretary of state said supporters of the initiative had gathered enough signatures to put it on the ballot in 2020. The “split-roll” measure, formally called the California Schools and Local Communities Funding Act, would require certain commercial and industrial real property to be taxed based on fair-market value rather than the current method of purchase price with limited inflation. It would dedicate a portion of any increased revenue to education and local services.
Supporters of the measure said it would be the first commercial property tax reform initiative to qualify for the ballot since the passage of Proposition 13 in 1978. Proposition 13 limits property tax rates to 1% for all local governments serving the property, with certain exceptions to finance local infrastructure, and caps the growth of a property's taxable value to the lower of 2% or the rate of inflation per year.
The initiative in 2018 needed at least 643,948 projected valid signatures to qualify by random sampling, and it exceeded that threshold Tuesday. But the threshold to get on the ballot has since increased for such initiatives to close to one million, according to the secretary of state's office. In 2018, the group Housing California said it submitted more than 860,000 signatures to get the act onto the November 2020 ballot.
Rob Lapsley, president of the California Business Roundtable and co-chair of Californians to Stop Higher Property Taxes, said on Tuesday the announcement to refile proved there were significant flaws in the first proposition and said the new measure was equally flawed. His group has adamantly supported Proposition 13.
“There are no tweaks or amendments that can be made to this split-roll measure that will prevent it from being a major, multibillion-dollar tax on all Californians in the form of higher prices on everything we buy — from groceries and gasoline to diapers and day care,” Lapsley said. “Should either measure appear on the November 2020 ballot, an aggressive, broad-based coalition will fight it.”
Rex Hime, president and CEO of the California Business Properties Association and co-chair of Californians to Stop Higher Property Taxes, said the proposed changes don't change the negative impact of the measure.
“This last-ditch attempt to tinker with the details is like rearranging the chairs on the deck of the Titanic,” Hime said. “No matter how you shuffle, dismantling Proposition 13 will result in disaster for California families, workers and the economy.”
If the proposition makes it onto the ballot and is then passed by voters in 2020, commercial and industrial properties, as well as vacant land not intended for housing or commercial agriculture, would be taxed based on market value instead of the purchase price. Properties would be exempt from market value assessment and continue to use purchase price if the owner operates a business on the property and the owner's holdings in the state are less than $3 million, adjusted for inflation biannually beginning in 2023.
--Editing by Vincent Sherry.
All Content © 2003-2019, Portfolio Media, Inc.
Although this bill is labeled EDUCATION and LOCAL GOV’T FUNDING, it is the REPEAL of PROPOSITION 13 – VOTE NO!
The elimination of Prop. 13 is is just one more way of taxing people in California will have the complete opposite effect on what the sponsors are attempting to accomplish. If additional taxes continue to be added to the already burdensome taxes we are presently being assessed in California it will add to the mass exodus that is occurring in California, not only by business’, but by individuals as well. Below are the reasons why.
With respect to commercial property, if there are Triple Net (NNN) leases in place, the Landlord will pass through the increase in the property taxes to the tenants, which substantially increases the effective rent of the tenants. The vast majority of tenants will not be able to afford paying additional rents and a great many of them will be forced to go out of business. This, in turn, creates multiple vacancies. Without sufficient income to make payments on their loans, the lenders will foreclose on the properties and Landlords will lose the properties. This will further create an adverse effect on the California economy and thus, a substantial reduction in collectible property and income taxes, which is the opposite affect the advocates of the elimination of Prop. 13 are attempting to accomplish.
if Real Property Taxes are increased on properties with Gross Leases as opposed to Triple Net leases, the additional expense will have to be absorbed by the Landlord. Without sufficient income to pay the mortgages, lenders will foreclose and the Landlords will lose their properties. This will cause devaluation of the properties and result in less property taxes being collected. In addition, there will be an adverse snowballing effect on the industries related to the ownership of real estate (ie; the construction industry, mortgages, insurance, title insurance, escrows, etc.).
If Real Property Taxes are increased on residential property (our HOMES) it will undoubtedly have the same effect that the increased mortgage rates had on homeowners in 2008 as property owners, particularly those seniors with fixed income, will no longer be able to make the payments and will subsequently lose their properties.
The proponents of the elimination of Prop. 13 are very short sighted, deceptive and untruthful. For the reasons stated above it will cause a substantial decrease in the value of all real property, foreclosures will skyrocket and the economy of California will result in less property taxes being collected and generated. Then where will the money come from to fund all of the proponents idealistic and idiotic programs?
Teachers Union Contributes Another $3 Million Towards 2020 Split Roll Initiative
The California Teachers Association (CTA) once again opened their checkbook and made another $3 million contribution to the campaign supporting the split roll property tax measure. This latest move brings CTA’s fundraising for the campaign to $6 million, making the union the biggest supporter of the proposal thus far. According to the Secretary of State's Office, a total of about $11 million has been raised in support.
The split roll measure, dubbed by the proponents as Schools & Communities First initiative, has also garnered support from the Chan Zuckerberg Initiative, which has contributed $1.8 million, and the Service Employees International Union (SEIU), which has contributed $1.5 million. On the other hand, nearly $2 million has been raised by opponents against the proposed ballot measure.
Editorial Board Deems Split Roll Ballot Measure “Catastrophically Misguided”
Opponents of an initiative to revise Proposition 13 and allow for a split property tax roll are distributing excerpts of the Southern California News Group editorial, “Split roll measure a bad idea in good times, now even worse.” Please read the excerpts below:
“An initiative that would change Proposition 13 to require nearly all business properties to be regularly reassessed to market value has run into the hurricane of coronavirus. What was already a bad idea is now catastrophically misguided…
If or when the commercial property market rebounds, unlimited increases in property taxes would impede economic growth and could drive some businesses to leave the state, taking jobs with them. If values stay depressed, the disruptive change to Proposition 13 would raise far less revenue than predicted.
This is a no-win proposal. The best thing the proponents of the split roll initiative could do right now is withdraw this ill-advised measure.”
For more information, please see https://stophigherpropertytaxes.org/southern-california-news-group-editorial-board-says-initiative-to-destroy-prop-13-is-catastrophically-misguided/.
Above articles: Split Roll info for website.docx
California Self Storage Association5325 Elkhorn Blvd., #283 Sacramento, CA 95842P: 888-CSSA-207 or 888-277-2207F: 949-861-9425
Contact us Online
Whether you’re an Owner, Operator or Vendor we have a membership that is right for you.
Become a Member