As the media focuses overwhelmingly on the drawn-out presidential election, we shouldn’t ignore the defeat of Prop. 15, a massively consequential outcome for Californians. Even in this most liberal state, where sales taxes, income taxes and gas taxes march ever upward, Prop. 15’s loss shows that Prop. 13 taxpayer protections remain important, popular, and necessary.
Once again, Prop. 13’s deep roots proved tough to tear out. Prop. 15 was the latest of many attempts to dismantle the state’s most famous taxpayer reform. Prop. 15 would have eliminated a key business property protection by subjecting these properties to reassessments at least every three years, exposing them to massive tax increases far above the 2-percent cap guaranteed by Prop. 13.
It would have gutted the agricultural industry by requiring reassessments of barns, silos, processing facilities, mature fruit and nut trees, and other property that currently falls under Prop. 13’s protections. Small business owners with “triple net” leases, already reeling from COVID, would have faced a wave of property tax increases as they look to rebound.
California’s business climate is already terrible – it’s earned CEO Magazine’s worst place to do business “honor” for a decade straight – and Prop. 15 would have certainly made it worse. But besides avoiding the direct damage Prop. 15 would have inflicted on business, its election day defeat is important for the precedent it continues.