Leveling the ground: Yes on Proposition 15

Whoa! Proposition 15 would strip $400 million OUT of San Mateo County. And would actually rob our local schools.

First, look at the Yes on 15 website — $770 of new tax would be levied here — but less than half would be distributed to local services — $42 million to our schools and $330 million to local city and county governments. Proposition 15 takes clever advantage of property tax allocation and school funding mechanics to quietly remove hundreds of millions of dollars from here — and from Santa Clara — and from Orange — and from San Francisco.

Worst of all, Proposition 15 actually robs our local schools, by reallocating a crucial existing funding flow. Had Proposition 15 been enacted ten years ago, Sequoia UHSD would have received $1700 less in per-student revenue this year. The district would have lost its constitutional right to the $16.5 million of commercial property tax growth it received — and gotten only one-tenth of that in return, $1.7 million, from Proposition 15’s statewide pot. The local elementary districts — Menlo Park City and Las Lomitas — would have lost $600 per student — with only $100 per student in return.

Proposition 15 is NOT a close-the-loophole measure. It far oversteps that. Proponents’ July “Concentration of Revenue” report show it quadrupling its returns by moving all properties up to market — and appropriating all growth in commercial property tax revenue. Just 25% of the new revenue comes from those close-the-loophole properties with a 1990 base year or earlier. 30% comes from properties that have changed hands within the past decade — squeezing the last bit of appreciation out while, far more devastatingly, appropriating revenue that now flows to our schools from new construction, 2% inflation increase, and changes in ownership.

Over the past ten years, commercial property tax revenue grew 60% in Las Lomitas, 112% in MPCSD, and 115% in Sequoia Union High District. This has kept them ahead of the local cost of living curve. It has allowed them to provide an education that ensures just over 82% of local elementary children meet the state’s English and mathematics requirements — compared with 50% and 40%, respectively, statewide.

Proposition 15 was, from the outset, designed to be redistributive. It uses the flat statewide school funding formula — set into July 2019 stone to preclude any regional cost adjustment. And it redistributes all the substantial education share of revenue collected, overwhelmingly, in high-cost San Mateo, San Francisco, Orange and Santa Clara counties.

Last month my Guest Opinion focused just on how the proposition raised — and removed — most of its new revenue from our least advantaged areas. That focused on both the reassessment revenue AND what I’m discussing here, the existing growth in commercial property tax.

So, let me put a dollar amount on that crucial growth component for our least advantaged districts. Had Proposition 15 gone into effect ten years ago, Ravenswood would have constitutionally lost $3,600 per student of current local property tax growth. Redwood City Elementary? The $1,000 per student that has pushed it into basic-aid status. (Brisbane, South San Francisco, and Jefferson Union High in Daly City would also have been massive losers — as well as the community college district, all at over $1000/student.)

Raising $780 million in local taxes within this county — then handing just $42 million to our schools — while sending over $400 million to Sacramento for distribution elsewhere — is not reform, it’s clever exploitation of labyrinthine property tax allocation and school funding mechanics to benefit (surprise) Los Angeles County.

Happily, residents can vote NO on Proposition 15 and still support closing some of the loophole. Worried about Trader Joe’s? Voting yes on Proposition 19 would take care of that situation — which has gone through four changes of ownership under the Prop 58 exclusion — and many others throughout the area.

(Full disclosure: I do not have a child in the schools, nor do I own or rent commercial property. But I do have a deep interest in supporting all our local schools, in closing the commercial loophole past 25 years, and in getting a regional cost adjustment for state-funded schools in high cost counties in California.)

Kate - thank you.

Yes on 15.

I respect all the work Bestor has done in documenting disparities caused by the original Jarvis-Gann scam.

Please vote YES on Prop 15.

Thank you for your clear analysis Jennifer. It's clear a NO vote on 15 is in order.

I agree, a definite NO on prop 15. Prop 13 was meant to protect property owners from massive tax hikes. Weakening those protections is not the answer.

Yippee! Vote for Prop 15 and the schools get $12 billion free money!

Umm... from whose pocket?

$780 million from our county means $1,018 from each resident. Trader Joe's and the rug store and the Unamas and the hair salon will all have to raise prices to pay their higher taxes. If that's what you want, then sure, vote Yes.

"Trader Joe's ... will all have to raise prices to pay their higher taxes."

Compare the assessed value for that building and Draegers down the street.

"Compare the assessed value for that building and Draegers down the street."

You think they won't raise their prices if their taxes go up? Seriously? Have you ever owned a business?

Q: You think they won't raise their prices if their taxes go up? Seriously? Have you ever owned a business?
Answer: Yes, yes and yes.

Take 2 apartment buildings next to each other, built at the same time, functionally identical. One was assessed a year ago, one in the 70's.

Are the tenants in the "70's" building getting a break? Or are they paying market? Of course: market.

Now the "70's" building has to pay a fair and equitable tax rate. Will they raise their rent ABOVE MARKET, higher than the identical building next door?

Nope.

They ain't happy, as landlords. Life sucks when the easy-money gravy train ends and ya gotta play on a level field. Folks hate that, I get that.

Yes on 15.

Yes:

there are a lot more buildings besides small apartment buildings, most of which are not owned by large corporations, by the way. Those buildings have businesses in them that will pass on the increased costs. Triple net leases will carry those increases straight through to tenants. What will they do? That's right, raise their prices.

Not to mention this is all based on the BS promise that this will mean more money to the schools. Just like the lOttery was supposed to. Didn't happen did it? This won't either. This is just a way for the dems that run this state to get their hands on more of our money.

VOTE NO ON 15.

Thanks, MV. Your lack of response to the example of apartment buildings, and the lack of response to the TJ/Draegers example, is telling.

And validating.

All the "no's" have is scare tactics and fear.

Yes on 15.

"most of which are not owned by large corporations"

Not so sure about that - in 2018, the top 50 owned over 2 million units, according to just one study. Take that out to the the top 1,000, and somehow find out which legal entities shield ownership, etc..

One suspects it's more than you think.

One wonders, for example, how many of the Steve Mnuchin/OneWest foreclosed properties in the Great Recession are under one umbrella as rentals?