SACRAMENTO (AP) – California voters have rejected a proposal to partially dismantle the state’s 42-year-old cap on property taxes, a move that would have have raised taxes for many businesses in a pandemic-hobbled economy.
Following Tuesday’s update to the vote count, Proposition 15 had only about 48% support and was trailing by more than a half-million votes.
The loss is another blow to organized labor, which also came out on the losing side of the most expensive ballot question in state history. It would have required Uber, Lyft, DoorDash and other app-based delivery services to treat their drivers as employees rather than independent contractors.
Since 1978, California has limited tax increases to 2% a year until a property is sold. With prices climbing at a much higher rate, taxpayers who have held homes and businesses for many years pay far less than what the market value would determine.
Proposition 15 would have allowed local governments to reassess commercial and industrial property every three years, while residential property, including home-based businesses, would remain under 1978 rules. The change would have generated up to $12.5 billion in revenue.
Supporters argued a “split-roll” system would help fix inequities that shield wealthy corporations from paying a fair share and deprive tax revenue for public schools and local governments. Several polls released before or during early voting showed the measure ahead, though not by much.
The No on 15 campaign had a simple message: “Stop Tax Hikes,” its red-and-white yard signs read.
As expected, the measure performed far better in Democratic strongholds, including Los Angeles and the San Francisco Bay Area. But it still fell short in many areas that went solidly for President-elect Joe Biden, who endorsed it along with his running mate, U.S. Sen. Kamala Harris of California.
In San Diego County, the state’s second most populous, voters rejected Proposition 15 by 13 percentage points, while backing Biden over President Donald Trump by 23 points. In Sacramento County, No votes outnumbered Yes votes by 7 percentage points, while Biden won by 29 points.
The voter-backed 1978 Proposition 13 sparked a nationwide tax revolt and held enduring popularity. Jerry Brown, California’s governor from 1975 to 1983 and 2011 to 2019, said several years ago that Proposition 13, enshrined in the state constitution, is “a sacred doctrine that should never be questioned.”
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