20 OCTOBER 2019 • WWW.AAGLA.ORG It is called the “California Schools and Local Community Funding Act,” the proposed 2020 ballot initiative that is an $11 billion special interest backed tax increase. If passed, the initiative will dismantle Proposition 13 and raise taxes on commercial and industrial property by requiring reassessment at current market value every three years starting in 2020. As a result, property taxes for all businesses would dramatically increase, therefore, forcing businesses to pass along costs to consumers. This type of property tax is known as a “split roll tax” because it splits the property tax roll by business vs. residential property. However, residential property owners could BE THE NEXT TARGET! If this initiative passes, the sponsors will come after Proposition 13 protections on residential property owners next. That means higher property taxes for owners of apartments, single-family homes and condominiums. This will make the housing crisis even worse by increasing the costs of owning and renting a home – it could even force people out of their homes, like what happened before the voters passed Proposition 13 in 1978. In the 1970s, families, seniors and small businesses were faced with the possibility of losing their properties because they could not afford 50% - 100% increases in their property taxes every year. Unpredictable property tax bills skyrocketed, often beyond the owners’ ability to pay. As a result, many families were forced from their homes and small businesses were left with no choice but to raise prices. The “solution” became known as “Proposition 13.” California voters overwhelmingly passed Proposition 13 in 1978 to bring property tax certainty to residents and businesses, allowing them to afford their property tax bills in the future. Proposition 13: • Calculates general property taxes for residential and business properties based on 1% of their purchase price. • Limits annual increases in property taxes to just 2% per year, which prevents sharp increases in property taxes, especially when property values rise quickly. • Requires that local special tax increases be approved by voters with a two-thirds vote. • Requires that state tax increases be approved by a two-thirds vote of each house of the Legislature. The loss of Proposition 13 protections could have devasting effects on our economy and our livelihoods. Businesses will surely need to pass along the cost of increased taxes to consumers or will no longer be able to afford to do business in California. Thousands of jobs may be lost! And, it is only a matter of time before apartment buildings are considered the same as “commercial” property and, accordingly, lose Proposition 13 protections too. As an industry, we must fight all attempts to compromise Proposition 13 protections. ”SPLIT ROLL” 2020 BALLOT INITIATIVE COULD INCREASE PROPERTY TAXES BY REPEALING PROPOSITION 13 PROTECTIONS The Apartment Association of Greater Los Angeles will be providing future updates to members and we will be asking for contributions to its Political Action Committee to fight this ill-conceived ballot initiative. Please generously give today! Contribute by mailing your check to AAGLA PAC, c/o Reed & Davidson, LLP, 515 South Figueroa Street, Suite 1110, Los Angeles, California 90071-3301; Attn. C. Davidson, Treasurer, or contribute online at: https://aagla.org/pac/.