BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Adopt Recommended Positions on State Ballot Initiatives: Proposition 15 - Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative; and Proposition 16 - Allows Diversity as a Factor in Public Employment, Education, and Contracting Decisions, Legislative Constitutional Amendment.
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RECOMMENDATION:
Recommendation
A. Adopt a position of "Support" on Proposition 15 - Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative; and
B. Adopt a position of "Support" on Proposition 16 - Allows Diversity as a Factor in Public Employment, Education, and Contracting Decisions, Legislative Constitutional Amendment.
Body
SUMMARY:
A. Proposition 15 - Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.
Recommended Position: Support
If enacted by the voters, Proposition 15 (Prop 15) will change the property tax assessment of commercial and industrial property to a basis of fair market value rather than the historical purchase price that is the current tax basis for all property under Prop 13 (June, 1978). Additionally, the measure exempts those properties held by an entity whose aggregate value is under $3 million. It also exempts the first $500,000 of those businesses' personal property. After backfilling any losses to the state as well as administrative costs to counties, the measure would then distribute any net additional revenues to local agencies and schools in an approximate 60/40 split (60% to local agencies, 40% to schools) using existing formulas for distribution. Ad valorem property tax revenues are distributed according to a regime known as "the AB 8 formula," which locked in tax allocations at the same level they would have been prior to the passage of Proposition 13 in 1978.
Real property taxes are generally based on purchase price at the point of transfer. These taxes are constrained by...
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