Steinberg endorses ‘split-roll’ initiative to raise property tax on California businesses

Sacramento Mayor Darrell Steinberg is getting behind a California ballot initiative that would raise property taxes on businesses and bring in billions of dollars every year for public services.

The measure — arriving on November’s ballot as Proposition 15 — would end restrictions on assessments for commercial property worth more than $3 million, allowing them to be taxed based on their current value instead of their purchase price.

The “split-roll” initiative would exempt residential property and small businesses, meaning they would continue to be assessed at their purchase price.

The concept represents a break from California’s 1978 property tax law, Proposition 13, which prohibits new assessments unless a property changes ownership.

Steinberg’s support for the new initiative isn’t unexpected. It’s also backed by Democratic presidential candidate Joe Biden, Los Angeles Mayor Eric Garcetti and Stockton Mayor Michael Tubbs.

Unions are supporting Proposition 15, arguing it would make California’s biggest corporations pay their fair share in property taxes and bolster the state’s coffers as it faces a deficit brought on by the coronavirus outbreak.

“The COVID-19 crisis has hit our schools and communities hard and has inflicted the most harm on those who already have been left out of economic growth,” Steinberg said in a Wednesday statement. “Proposition 15 will help us recover by closing corporate property tax loopholes to generate $12 billion every year for schools, community colleges, essential workers and local governments — at zero cost to residents. It will also cut taxes for the small businesses that are struggling to survive.”

Opponents to the measure have mobilized against what they call “the largest tax increase in California ever” — and the first step toward a complete repeal of Proposition 13.

The California Assessor’s Association told lawmakers in June that a split-roll tax system would prove difficult, if not impossible, to implement.

According to a new report from Blue Sky Consulting Group, around 10 percent of California businesses would generate more than 90 percent of Proposition 15’s revenue.