Here's what Proposition 15 could mean for local public school district funding
Proposition 15 could spell a significant increase in funding for schools by addressing property tax assessment.
Currently, commercial and industrial properties in California are assessed for taxes based on purchase price, according to the state Legislative Analyst's Office. Proposition 15, also known as The California Schools and Local Communities Act of 2020, would change the way these properties are assessed, and instead use current market value.
This proposition would amend Proposition 13, which passed back in 1978. Proposition 13 limits property taxes to 1% of the assessed value and caps an increase in taxable value by 2% or rate of inflation — whichever is lower — per year, according to the state. If the property is sold, the property is taxed based on purchase price.
According to a summary of a 2016 Proposition 13 report from the state's analyst office, the market value is often greater than 2%.
"Many property owners therefore pay lower property taxes under Proposition 13 than they would pay if taxed based on their properties’ market values," the report states.
Proposition 15 would increase property taxes for commercial and industrial properties worth more than $3 million starting 2022 by assessing for property tax based on market value. They would still be taxed 1% on this new value and cap yearly increases by 2%.
The proposition does not directly affect residential homeowners, as well as small businesses that have a fair market value of $3 million or less.
The increased taxes are used to help fund governing bodies including cities and school districts. Governing bodies could see between $6.5 and $11.5 billion in funding per year, Legislative Analyst's Office.
Around 60% would go to cities, counties and special districts. The other 40% of money from this increase would be funneled into a local school and community college property tax fund.
This proposition has received significant attention, primarily with support from teachers' advocacy groups and opposition from real estate interest groups.
What about local schools?
On the high end, local public school districts stand to gain millions of dollars in upcoming years if the proposition were to pass.
Education firm School Services of California, Inc. calculated revenue estimates if the proposition were to raise $6.5-$11.5 billion based on 2019-20 enrollment data.
Based on the information, the Oxnard school districts — two of the largest districts locally — stand to gain the most. Oxnard Union High School District could see between $6.6 and $11.7 million while Oxnard School District could see between $6.3 and $11.2 million.
Conejo Valley and Ventura unified school districts each stand to gain anywhere between $5-$6 million and $10-$11 million.
Smaller school districts would see money ranging in the thousands. Santa Clara Elementary, for example, could see $37,917 on the high end.
Voting in 2020:Here are more answers to your voting questions
Oxnard-based youth organization Future Leaders of America held an event late September in Oxnard to advocate for the proposition. Their members were joined by representatives from city council and Oxnard Union school board.
Oxnard Union Board President Karen Sher spoke about her experience as a teacher.
"It is time for businesses and corporations to pay their fair share so that we can provide powerful futures for every child," said Sher. "As a teacher, that is my mission."
Locally, the Ventura County Democratic Party, Democratic Socialists of America - Ventura County chapter and local chapters of the California Federation of Teachers support Proposition 15.
Opposition to Proposition 15
Those opposing the proposition say it could have devastating consequences to California businesses.
Danielle Borja, CEO and president of Greater Conejo Valley Chamber of Commerce, said there are many reasons why she doesn't support Proposition 15.
"We’re in the worst economic environment since the Great Depression, and we’re talking about passing the largest tax increase in the state of California," she said. "I don’t think those two things should happen at the same time."
Borja said she understood the need for schools' funding. She currently has two kids in the local public school system.
"No one doesn’t want to help education, but at what cost?" Borja said.
She said the $3 million threshold that decides whether or not a commercial/industrial property is taxed differently is too low for a state like California.
Borja explained that small businesses under that threshold could still be affected. Tenants under a triple-net lease agree to pay a portion of expenses like property taxes among other fees, according to a research article written by Stanford University Professor Steven Grenadier.
If the landlords' taxes go up, Borja said small businesses could also take a hit.
"We need to be helping businesses on this road to recovery," Borja said.
Others who oppose Proposition 15 locally include Ventura County Republican Party, Ventura County Taxpayers Association and Oxnard Chamber of Commerce.
Shivani Patel covers education for The Star as a Report for America corps member. Reach her at firstname.lastname@example.org or (805) 603-6573. She is also on Twitter at @shivaaanip.