Antioch School Board votes 5-0 to support ballot measure increasing business property taxes in state by $12 billion per year

Repeals part of Proposition 13’s protections

By Allen Payton

During their meeting on Wednesday, June 10, 2020 the Antioch School Board unanimously passed a resolution without debate, supporting the California Schools and Local Communities Funding Act of 2020 on the November ballot. The measure would raise taxes on commercial and industrial property in California, repealing part of the tax protections in Proposition 13 that was passed by almost 63% of voters in 1978. (Read here or below: Resolution 2019-20-51 Schools and Local Communities Funding Act of 2020)

According to the non-profit, non-partisan Ballotpedia page on the measure, “Proposition 13 (1978) requires that residential, commercial, and industrial properties are taxed based on their purchase price. The tax is limited to no more than 1 percent of the purchase price (at the time of purchase), with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower.” UPDATE: As of July 1, 2020 Secretary of State Alex Padilla has assigned the measure the number of Proposition 15 on the November ballot.

Supporters are calling the protections for business property “loopholes” in the state’s tax system. According to Ballotpedia, “the ballot initiative would amend the state constitution to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value” which is “known as split roll.”

Superintendent Stephanie Anello asked “the board to approve a resolution asking that the state fully fund education. As you know during difficult financial times, because our revenue is based on state revenue the schools are the first that are usually cut, that’s why you often see us revising our budget, which looks like we’re going to be doing in the next 45 days.”

“So, this is asking the legislature and the governor to consider Prop 98 not the floor, meaning the guarantee that was made to schools, that they would get at least that amount,” she continued. “It was never meant to be the ceiling. And what we find is that is often the ceiling. During difficult budget times, schools have to face difficult financial realities.”

Anello made no mention of Proposition 13 nor does the resolution.

Only one member of the public, Valerie Luke, submitted a comment on the matter, writing, “We are once again in a situation of fighting over scraps to try and meet the needs of our students. The funding system for our schools is deeply flawed and we’re always trying to figure out how to do more with less.”

“A coalition of education and community groups have been working many years on a solution to the education funding problem in California,” she continued. “Changing our tax code to eliminate loopholes that allow some big business from avoid paying property taxes will raise some $12 billion for our schools every year in our state.”

K-12 Schools & County Ed Offices Will Receive $2.67 to $4.1 Billion Annually If Passed

However, also according to Ballotpedia, schools would receive less than 40% of the estimated $7.5 to $12 billion generated from the tax increase. That’s because, “First, the revenue would be distributed to (a) the state to supplement decreases in revenue from the state’s personal income tax and corporation tax due to increased tax deductions and (b) counties to cover the costs of implementing the measure. Second, 60 percent of the remaining funds would be distributed to local governments and special districts, and 40 percent would be distributed to school districts and community colleges (via a new Local School and Community College Property Tax Fund).”

Ballotpedia further explains that “Revenue appropriated for education would be divided as follows: 11% for community colleges and 89% for public schools, charter schools, and county education offices. There would also be a requirement that schools and colleges receive an annual minimum of $100 (adjusted each year) per full-time student.”

Class Warfare Rhetoric in Resolution

The resolution uses class warfare rhetoric with statements such as, “the lack of adequate local funding is the result of an inequitable tax system in which corporations and wealthy investors do not pay their fair share in property taxes” and “loopholes in California’s property tax system allows a fraction of major commercial and industrial properties to avoid regular reassessment and use shady schemes to hide change in ownership”, as well as “these loopholes and tax schemes result in millions of dollars going to corporations and wealthy investors rather than to schools and local communities for essential services”

Householder Compares Facebook’s Property Taxes to Disney’s

Trustee Ellie Householder was the only member of the board to speak on the resolution, saying, “One of the things I find the most striking about this, when we’re talking about closing the corporate loophole…The thing that struck such a big chord with me, the fact that Disneyland…is paying property taxes on the value of that land in 1957 dollars.”

“So, you can imagine that a company like say Facebook that has just recently built a facility in the South Bay is paying a lot more property taxes than this multi-billion-dollar company,” she continued. “This is not going to increase taxes on individuals, but it’s just going to make sure that companies like the Disney Corporation give their fair share for schools.”

“With that I proudly make a motion to support the resolution,” Householder concluded.

Trustee Gary Hack seconded the motion and without any further discussion, it passed on a 5-0 vote.

Disneyland actually pays property taxes based on the value of its land in 1976 the base year stipulated in Prop. 13, plus the 2% maximum annual increase included in that ballot measure. Assuming it was increased by 2% every year since then, Disney is now paying property taxes based on almost 230% of the 1976 value of it’s property.

Facebook Founder & Wife Back Measure

Householder’s reference to Facebook’s property taxes may not be random, as one of the major funders of the Schools and Communities First campaign, leading the effort in support of the measure, is listed on its website as Chan Zuckerberg Advocacy. Also, according to the campaign’s website, it is “sponsored by a Coalition of Social Justice Organizations”.

The Chan Zuckerberg organization’s correct name is the Chan Zuckerberg Initiative (CZI) and was formed by Facebook founder Mark Zuckerberg and his wife Priscilla Chan, who are each listed as Co-Founder and Co-CEO. Among a variety of efforts, according to the CZI website, through the Reforming Policies & Practices, under their Advocacy efforts, they “work to shape policies that tangibly impact communities” and “raise awareness of key issues, support frontline organizations, and contribute to ballot and legislative measures.”

According to a one-page flier provided on the campaign’s website, the measure “Levels the playing field for all the businesses that already pay their fair share.” So, if it passes, Facebook’s older competitors in the state will have to pay the same property tax rate as the Zuckerbergs’ company does.

Opponents Of Measure Say It Will Hurt Jobs

Former state Director of Finance, Tom Campbell, one of the opponents of the measure warns, “In repealing Proposition 13 for businesses, California will be forfeiting our best argument to attract new jobs – a long-term sacrifice that will hollow-out California’s economy, costing us far more than $10 billion in a very short time.”

Commercial Property Tenant Rents Could Increase, Cause Decrease in Property Values

“It’s short-sighted,” said Aaron Meadows, the owner of commercial property and a property manager in Antioch, who commented after the board’s vote. “It’s going to be an additional cost to the corporation. It’s going to be passed on to the consumers. And the corporations are going to leave the state. We’re already losing headquarters. They’re leaving San Francisco and moving to Texas.”

“Why would their headquarters want to stay here?” he asked. “Why would Chevron want to stay here and keep their headquarters in San Ramon?”

“Commercial property managers will ask for reassessments if they get assessed to high,” Meadows continued. “They could potentially cause an assessment decrease, if the values aren’t keeping up.”

“In some commercial and retail buildings, property taxes are passed on to tenants as triple net,” he explained. “So, rents on the small business owner tenants will increase.”

“Plus, values will potentially decrease,” Meadows stated. “It might increase in the short term for property tax purposes. But, when we have to pass those additional taxes on to tenants, it could make it more difficult to lease the space, which reduces revenue resulting in the value of the property decreasing.”

An effort to reach Antioch Chamber of Commerce chairman Richard Pagano, to get the perspective of local businesses, was unsuccessful prior to publication time. In addition, following the meeting an email was sent to Anello asking if she wrote the resolution or for the source of it. Please check back later for any updates to this report.

WHEREAS, for four decades, school districts in California have experienced underinvestment and devastating cuts causing California’s school funding to fall behind and resulting in fewer services and resources for students and teachers;
WHEREAS, the lack of adequate local funding is the result of an inequitable tax system in which corporations and wealthy investors do not pay their fair share in property taxes;
WHEREAS, loopholes in California’s property tax system allows a fraction of major commercial and industrial properties to avoid regular reassessment and use shady schemes to hide change in ownership;
WHEREAS, these loopholes and tax schemes result in millions of dollars going to corporations and wealthy investors rather than to schools and local communities for essential services;
WHEREAS, experts estimate that the California Schools and Local Communities Funding Act reclaims $12 billion in property tax revenue every year to ensure that our schools and communities have the resources to educate all of our kids and the services to support all of our families;
WHEREAS, the California Schools and Local Communities Funding Act does not affect property taxes for homeowners or renters because the initiative exempts all residential property;
WHEREAS, academic researchers at the University of Southern California (USC) have identified that the vast majority of the reclaimed revenue will come from just a fraction of large properties;
WHEREAS, California schools are falling behind, ranking lowest in the nation with the largest number of students per teacher and the fewest counselors per student;
WHEREAS, per-pupil funding has declined from the top 10 in the nation to 39th;
WHEREAS, the top-ranked state spends $10,259 more per-pupil to educate their children than California spends;
WHEREAS, the measure invests up to $4 billion annually for K-14 schools to ensure that our kids receive the world-class education they deserve;
WHEREAS, California should be a leader in innovation by educating the next generation of students to compete in the global economy;
WHEREAS, the California Schools and Local Communities Funding Act guarantees funding to all school districts, over and above Proposition 98 funding, and following the local control funding formula to all students in need in all districts;
WHEREAS, the measure also provides billions in funding yearly for cities, counties, and special districts in locally controlled revenues for affordable housing, parks, libraries, emergency responders, health and human services, libraries, public infrastructure, and much more;
WHEREAS, the measure incentivizes the development of residential units and provides more funding for communities to invest in affordable housing;
WHEREAS, the measure provides new tax incentives to spur new investment in small businesses by eliminating the business personal property tax on equipment for California’s small businesses;
WHEREAS, the measure also exempts all small business owners whose property is worth $3 million or less;
WHEREAS, the measure levels the playing field for businesses that already pay their fair share in our communities;
WHEREAS, the California Schools and Local Communities Funding Act of 2020 is on the November 2020 ballot;
THEREFORE, be it Resolved, that the Antioch Unified School District endorses the California Schools and Local Communities Funding Act of 2020 for a ballot measure in November 2020.

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the attachments to this post:


AUSD Resolution – Schools and Local Communities Funding Act of 2020 header


Resolution 2019-20-51 Schools and Local Communities Funding Act of 2020


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