BOARD AGENDA MEMORANDUM
SUBJECT:
Title
California Proposition 15, Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative Presentation by Santa Clara County Assessor Larry Stone.
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RECOMMENDATION:
Recommendation
Receive information on California Proposition 15, Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative presentation by Santa Clara County Assessor Larry Stone.
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SUMMARY:
Santa Clara County Assessor Larry Stone contacted Valley Water requesting to present on California Proposition 15. The proposition would increase funding for K-12 public schools, community colleges, and local governments by requiring commercial and industrial real property be taxed based on current market value. According to the California Legislative Analyst (LAO), this initiative exempts residential properties, agricultural properties, and owners of commercial and industrial properties with a combined value of $3 million or less. The increased funding will supplement existing school funding guarantees. Additionally, this initiative exempts small businesses from personal property tax and for other businesses, exempts $500,000 worth of personal property. The LAO and Director of Finance's summary on the fiscal impact to state and local governments will result in a net increase in annual property tax revenues of $7.5 billion to $12 billion in most years, depending on the strength of real estate markets. After backfilling state income tax losses related to the measure and paying for county administrative costs, the remaining $6.5 billion to $11.5 billion would be allocated to schools (40 percent) and other local governments (60 percent). As a result, it is expected that Valley Water would see increased annual revenue should Proposition 15 pass by a vote of the electorate, as detailed below.
Impacts on Valley Water
As Valley Water is funded in part by revenues raised through property ta...
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