Rigworks would like to encourage you to vote NO on Prop 15. It has a sympathetic title “funding source for public schools” but is in fact an uncontrollable 11.5-billion-dollar property tax hike on CA businesses that are already reeling from the pandemic. Although the increase affects commercial properties over $3m (i.e. almost all properties in our Southern CA sailing community), the consequences don’t stop there. Most small businesses rent units from these larger properties, and our rents will definitely increase.
These increases will be passed on to you as consumers. Yard fees in our local shipyards, slip fees in our local marinas, products and services from local business will increase. And, if it hasn’t already, your favorite local restaurant may have to close. Most of us are just struggling to survive at our current margins and can’t absorb the additional costs.
How Prop 15 works… The state would reassess property taxes based no “how much a property can be sold for”. WHAT??? The government would get to assign a value to your property completely independent of a market transaction. How will they fairly value properties like Bali Hai Restaurant, Driscoll Boat Yard, Harbor Island West Marina, etc.? And property values will be reassessed annually, making property taxes impossible to project.
This will definitely end up in court! And tax payers will pay the legal fees!
History lesson… In 1978 we passed Prop 13 (by a wide margin) to limit property taxes to 1% of the sale price off a property and 2% maximum annual increase. We did so because CA property taxes were spiraling out of control and forcing families and businesses to sell properties they could no longer afford. But remember, whenever a property sells, the taxes are reassessed at current market value. Since CA property is some of the most expensive in the US and has a fairly high turnover rate, property taxes are still a huge source of revenue for the state.
And one final word… This is just a foot in the door. If this passes, and we erode our property tax protections, the increase will soon trickle down to residential properties. We are continually asked to increase taxes for schools (bonds, the lottery…) and the CA government continues to divert these funds to other projects. They have plenty of tax revenue to fund excellent education. It is simply not their priority!