***ALERT!!!*** PROPERTY TAX INITIATIVE GAINING MOMENTUM

A proposition to change Proposition 13 in a manner that would allow an almost doubling of state property tax is currently out for signature and seems to be gaining momentum.  This is a threat that we are taking very seriously and putting out a call to our industry to get educated, active, and engaged to prepare to defend against this huge tax increase.

The property tax initiative known dubbed by proponents at “Lifting Children and Families Out of Poverty Act” is referred to in shorthand as the “Collis” initiative after one of its primary advocates, former State Board of Equalization Member Conway Collis.

The measure would undo Prop. 13 by creating a property tax surcharge on all properties in the state (commercial and residential) assessed at more than $3 million.  The increased taxes generated are then directed to fund “poverty reduction programs.”

As of last week, the initiative had over 25% of the signatures needed to qualify for the ballot.  Advocates have until March 21, 2016, to collect the required 585,407 signatures.

According to a CalTax review, the 47-page initiative does not differentiate between commercial and residential properties. It refers to the property tax hike as “a surcharge not to exceed 1 percent of the full cash value of real property in excess of $3 million,” and says the “surcharge shall not be considered … a higher tax or new ad valorem tax on real property ….”

The “surcharge,” commencing with the 2017-18 fiscal year, would be an additional 0.3 percent tax on the portion of assessed value between $3 million and $5 million; 0.6 percent on the value between $5 million and $10 million; and 0.8 percent on the value in excess of $10 million.

This is a very real threat to increase property taxes on all of your properties in this state and we are working to mobilize all of our members to help fund efforts to defeat this threat. If you own property you should get engaged.  If you manage property you should make sure the owners of your property are aware and encourage them to get engaged.  If you rent property you should get engaged before your lease costs increase.

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