Contact: Robert Rivinius, Executive Director
The Family Business Association of California today issued the following statement expressing disappointment in Gov. Gavin Newsom’s decision to support Proposition 15, the measure on the November ballot that would create an $11.5 billion tax increase on businesses.
“The Family Business Association is composed of family-owned businesses that have been investing in California for decades. Our members have a long-term view. We create jobs and opportunities for thousands of Californians. COVID-19 has hit us hard. Global, offshore competition has narrowed our margins. Asking us to now pay in many cases two or three times the amount in property taxes that we have historically paid means higher wages will be deferred and what limited job growth there is will stop and any new jobs likely will be created in other states. Proposition 15 is a terrible idea, especially during these difficult times. We are very disappointed by Governor Newsom’s endorsement of this proposition that will seriously harm our businesses and our employees’ job security.”
At the July 29 FBA Board of Directors meeting, “no” positions on three ballot propositions were adopted:
No on Proposition 15 – the infamous “split roll” initiative backed by public employee unions would remove Proposition 13 protections for commercial properties and create about $12 billion a year in new property taxes. The unions reportedly will spend $40-50 million to get the initiative passed by California voters. FBA is part of a coalition of over 2,000 associations, businesses, and individuals opposing the measure. The county assessors in California also oppose the initiative as unmanageable and extremely difficult to implement. The campaign has a very good website full of information at www.noonprop15.org.
No on Proposition 19 – The assaults on California property owners and taxpayers never stop. And once again the California Legislature has advanced a massive tax increase at the last possible moment, sponsored by the California Association of Realtors. Assembly Constitutional Amendment No. 11 (ACA11) takes away Proposition 13 protections that California families have under current law and replaces them with a billion-dollar tax increase. This is Proposition 19. Under Prop. 58, a home of any value and up to a million dollars of assessed value of other property may be transferred between parents and children without reassessment. Proposition 19 (2020) would repeal Proposition 58 (1986) and force the reassessment of inherited or transferred property within families. The only exception is if the property is used as the principal residence of the person to whom it was transferred, and even that exclusion is capped. The Legislative Analyst’s Office estimates that the repeal of the “intergenerational transfer protections” guaranteed by Props. 58 and 193 will result in 40,000 to 60,000 families getting hit with higher property taxes every year. Prop. 19’s massive tax increase has been included in this initiative to offset another proposed constitutional change: the expansion of the ability for older homeowners to move to a replacement home and transfer their base-year property tax assessment from their previous home to the new property. While this “portability” expansion has some merit, voters rejected this idea in 2018. The backers of the proposal think they can sell it again by adding a tax increase.
No on Proposition 21 – This would amend state law to allow local governments to establish rent control on residential properties over 15 years old. The potential reduction in state and local revenues is tens of millions of dollars per year in the long term. FBA has always opposed rent control efforts as bad public policy, for a variety of reasons.
We also are considering support of Proposition 22, an initiative by the app-based driving industry. Many FBA members use app-based driving services to deliver food and the ill-conceived AB 5 of last year requires that such drivers become employees of the app-based company, rather than contracting with the company.