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Real-World Impact of California’s Prop 15 Outlined by Measure’s Opponents
Proponents of Proposition 15 released a report by Beacon Economics that examined the impacts to small businesses, should the largest property tax increase in California history pass. Those opposing the measure, including many in the commercial real estate industry, say that report is flawed and shows exactly how far off supporters of the measure are in understanding its impact.
San Bernardino County Assessor Bob Dutton says, “This report directly contradicts itself, identifying in the ‘Context’ section that ‘the initiative excludes properties whose owners have $3 million or less in holdings in California.‘ However, in its analysis, the report wrongly says, ‘Prop 15 doesn’t apply to properties of less than $3 million in value.’ The latter is not true, but it is an often-repeated misrepresentation by proponents trying to hide the true impact this measure will have on small businesses throughout the state. This error in their analysis massively underrepresents the number of businesses affected by the measure.”
Opponents of Prop 15 note the distinction between properties worth less than $3 million in value and owners who own property less than $3 million is a critical distinction because it could drive property taxes significantly higher once a building is reassessed. Property worth less than $3 million may be reassessed if any direct or indirect owner of the property in question also has a direct or indirect ownership interest in other commercial or industrial property with an aggregate of $3 million.
Michael Bustamante, spokesperson for the No on Prop 15 campaign, says, “The Beacon Economics study cannot quantify the true impact of Prop 15 on small businesses because the data necessary to do so does not exist. There is no statewide database to determine how many properties each whole or partial owner of each commercial property owns, something that will have to be created if Prop 15 passes. This is part of the implementation nightmare that has caused the California Assessors’ Association to oppose Prop 15. While there is no way to accurately determine how many properties will be affected by this requirement, significantly more properties with small business tenants will be assessed than are captured by this partial and flawed analysis.”
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