It didn’t take long for split roll property tax advocates to make their way into the headlines. Bottom line–split roll property tax and any similar tinkering with Proposition 13 will kill jobs in California. Below is a recent op ed I wrote for the North County Times on the subject:
Forum: Split-roll property tax proposal a job killer
By NATHAN FLETCHER — 75th District assemblyman
In a crisis a lot of new ideas are put on the table. Many of these are welcomed additions to the debate. I’m particularly fond of new ways to make government work better-more accountably, more efficiently, and more transparently. There are some reform proposals that focus on using technology to open up state government for review and reorganization. There are other ideas for structural change-two-year performance-based budgets, term limit changes, instituting a part-time legislature, even calls for a constitutional convention. I have read about some cutting-edge steps to once again make California a competitive place to start and grow a business and to create jobs. All of these ideas have merit and deserve discussion.
But for every good reform-minded step forward, we often see a step backward. One such regression is a proposed change to Proposition 13 that would increase taxes on employers-often referred to as "split roll" tax. Proposition 13, which passed in 1978, limits the increase in taxable property value to 2% annually until the property is sold. At that point it is reassessed at sale price and then subject to the same increase limits until re-sold. This is true for both residential and commercial properties.
Many anti-business groups have pushed for this change to Proposition 13 that would require the value of business property to be assessed more often in order to increase the assessed value and thereby the business’s tax obligation. It would essentially split commercial properties from the current protections they share with residential property.
A group of employers from across California founded an organization called Californians Against Higher Property Taxes. Their charge was to look at the devastating effects this change might have. The results of their study concluded that moving to a split roll would decrease investment in California, raise prices on consumers, increase rent for small businesses and cost California an estimated 150,000 jobs. Dramatically increasing business property taxes would have destructive affects across the board-impacting even health care facilities like hospitals, doctors’ offices, and dental offices, forcing them to lay off workers and pass costs on to consumers through higher prices.
If adopted, split roll property tax would increase taxes, cost jobs, and make our tax revenue base more volatile-exactly the situation we should be trying to avoid. In order to reform our state we must confront the realities of an ineffective state government with regulatory and tax systems that are driving jobs out of California.
In this economic climate, we should be taking every step possible to encourage job growth, entrepreneurship, and economic expansion. Hitting business with billions of dollars in new property taxes that will be passed on to hardworking Californians is the exact opposite of what California needs to be doing.
There are a lot of creative ideas to get our state moving in the right direction-split roll is not one of them.