News Update

California voters defeat Proposition 15, measure to collect higher property taxes from commercial properties

California voters have defeated Proposition 15, the measure to collect higher property tax revenue from commercial properties.

The proposition has been lagging since the Nov. 3 election. The Associated Press on Tuesday called the proposition defeated following a ballot update that showed that Prop. 15 had only 48% support and was trailing by more than a half-million votes. Official returns won’t be certified until early next month.

The proposition was the first ballot attempt to amend Proposition 13, the ever-popular 1978 constitutional amendment limiting property tax increases.

One of the most contested and expensive state issues on the ballot, Prop. 15 would have raised anywhere from $10.3 billion to $12.6 billion annually for cities, counties and schools. Of that amount, 40% — $2.6 billion to $4.6 billion — would have gone K-12 schools and community colleges.

All the revenue would have come from higher taxes on commercial properties valued over $3 million by reassessing them at market value every three years while leaving intact Prop. 13’s rules for reassessing homes and apartment buildings only when they’re sold. Prop. 13 limits property taxes to 1% of assessed value, with a maximum 2% increase in taxes annually. Changing taxation only for commercial properties is why Prop. 15 is called a split-roll tax.