At the heart of the initiative, which is still being reviewed by the state attorney general’s office, is a property tax law enshrined in the state constitution since 1978. Proposition 13 caps taxes for all kinds of properties — residential and commercial — at 1 percent of a property’s purchase price, allowing for increases of no more than 2 percent per year, even if the value of the property triples or quadruples over time.
The initiative would change the constitution so that commercial and industrial properties — and land not intended for housing development — are instead taxed based on their current market value. The idea, long favored by critics of Proposition 13, is often called a “split roll” since it would not affect protections for residential properties. Commercial properties valued below $2 million would be exempt.
. . . If it qualifies, it is sure to be fought by the state’s deep-pocketed business interests who already complain about the cost of doing business in California. The LAO’s analysis notes that the changes proposed by the initiative could influence a business’s decision to move to or expand in the Golden State.
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