By: Kevin Zwick
As a nonprofit leader, I’ve always strongly believed that nonprofit organizations cannot truly meet their missions through programmatic work alone. For United Way Bay Area to meet our mission of breaking the cycle of poverty and strengthening the safety net for all residents, we must support those public policies and advocacy efforts which can lead to major structural and systemic changes. Luckily, we have the chance to advocate for and support such a policy this November by voting Yes on Proposition 15 which will close a 40-year-old loophole so that our schools, counties, and communities can access the funding they need to better serve our region’s children, families, and individuals.
This loophole was created when California voters approved Proposition 13 in 1978, tying both residential and commercial property taxes to the date they were purchased rather than their current market value. While residential land changes hands between owners regularly through home sales and thus gets reassessed at market value, many commercial properties do not fully transfer legal ownership when they are sold, thus avoiding reassessment. While this has provided some significant protections for homeowners who would have faced steep increases in their property tax bills, it has also conferred massive tax savings to some very large owners of commercial property which, in turn, has led to extremely detrimental effects on communities across the state.
The problem lies in how California allocates property tax revenue. Traditionally, property taxes have been the primary revenue source for funding schools and local services. Since 1978, California’s school districts have been severely constrained in the revenue they can raise to fund their education activities. This often translates to poorer educational outcomes for students and poorer economic prospects as they graduate.
This is significantly more pronounced in low-income communities, many of which already have lower land values and therefore lower property tax revenue. Students in these communities are challenged in their effort to receive high-quality educational opportunities and Proposition 13’s rules only serve to exacerbate those challenges. An unintended consequence of Proposition 13 has been an inequitable school system in California, where schools in high-income areas thrive and those in low-income neighborhoods continue to struggle.
Fortunately, voters in California have an opportunity to address some of these inequities in our tax system this November with Proposition 15. The Schools and Local Communities Funding Act 2020 would allow commercial and industrial properties to be taxed at their market value, rather than their purchase price while leaving in place Prop 13’s protections for homeowners, agricultural land, and small businesses. If passed, the measure could inject $7.5-$12 billion into our schools and local governments each year.
United Way Bay Area works to improve educational opportunities for all of California’s students from cradle to career. We work to remove barriers in the education system, so students can access pathways to a sustainable future. One of the ways we can do this is by ensuring our schools get the resources they need to prepare our students for economic success throughout their lifetimes. Passing Proposition 15 would be the first major step along this path and could be truly transformational for California’s students for generations to come.
We are proud to support Proposition 15 and encourage everyone to vote YES on the measure on the November ballot. Passing this measure is one way we can start to address the inequities in our tax system and make sure our children get a shot at a bright future. This fall when we fill out our ballots, let’s make sure we put our schools and local communities first by passing Proposition 15.
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