As reported by MKA (McHugh Koepke & Associates Government Relations)
On Friday, September 9th, Governor Gavin Newsom announced his support for Proposition 15, the “split roll” property tax measure on the November ballot. He called the proposal “a fair, phased-in and long-overdue reform to state tax policy.” Further, Newsom stated, “It’s consistent with California’s progressive fiscal values, it will exempt small businesses and residential property owners, it will fund essential services such as public schools and public safety, and, most importantly, it will be decided by a vote of the people.”
If approved by voters, Proposition 15 would create different tax rules for commercial and residential property. Specifically, the measure would lift commercial property tax caps imposed by 1978’s Proposition 13. Under the initiative, most commercial properties would be reassessed every three years instead of when they are sold.
Notably, for the past several months, both the supporters and opponents of the initiative have been seeking the Governor’s endorsement. In response to the news, the Yes on 15 campaign stated that this is “another watershed moment in the push to close corporate tax loopholes so Californians can reclaim billions for schools and essential local services.” Conversely, the No on Proposition 15 campaign responded by stating the initiative “will mean increased costs for the same small and minority-owned businesses he’s forced to close for the last six months.” Other groups including the California Chamber of Commerce, California Manufacturers & Technology Association, the California Retailers Association, and California Farm Bureau Federation also issued statements in response.
Newsom coupled his endorsement of Proposition 15 with a rejection of efforts to raise income taxes. “In a global, mobile economy, now is not the time for the kind of state tax increases on income we saw proposed at the end of this legislative session and I will not sign such proposals into law,” he said.