Californians have voted "no" on an initiative to increase state property taxes on commercial properties to their highest levels in more than 40 years.
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Proposition 15 would have overturned an older proposition that allowed state property taxes on commercial properties to be based on their purchase price rather than their market value. The older initiative, Proposition 13, also established that property taxes could be raised no more than 2% each year.
The state nonpartisan Legislative Analyst’s Office estimated that Prop 15 would have increased property taxes between $8 billion to $12.5 billion annually -- revenue that lawmakers say was intended to be funneled into schools and local communities.
Supporters of Prop 15 argued that average Californians and small businesses owners have shouldered the high costs for too long and that major corporations shouldn’t receive the same tax benefits as homeowners.
Among the most high-profile supporters were Democratic presidential nominee Joe Biden and his running mate, California Sen. Kamala Harris. The Yes on 15 campaign also received $7.1 million from the Chan Zuckerberg Initiative, the philanthropic organization backed by Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan.
Opponents had argued that the tax increase would inevitably have been passed on to small businesses and consumers – at a time when the state is still reeling from the coronavirus pandemic.
Smaller businesses would have had a longer transition to the higher taxes, while small businesses operated out of home would be exempt from the new law. Properties valued at less than $3 million would have been exempt altogether.