Credit: Allen J. Cockroaches Los Angeles Times / Polaris

On Election Day in Huntington Beach, people vote at Huntington Beach City Gym and Pool.

Credit: Allen J. Cockroaches Los Angeles Times / Polaris

On Election Day in Huntington Beach, people vote at Huntington Beach City Gym and Pool.

This story was last updated with updated results on November 8th at 9 a.m.

California’s Proposition 15, the first election attempt to amend Proposition 13, the popular 1978 constitutional amendment to limit property tax increases, remains behind. On Friday, the last update of the number of votes by the Foreign Minister, 48.1% of the votes were in favor of Prop. 15, 51.9% against; 13.9 million votes were counted, but 3.6 million preliminary ballot papers and postal ballot papers remain untold. (Go here for the latest results on proposals 15, 16 and 18.)

Prop. 15, one of the most controversial and expensive government issues on the ballot, would raise $ 10.3 billion to $ 12.6 billion annually for cities, counties, and schools if passed. Of that amount, 40% – $ 2.6 billion to $ 4.6 billion – would go to K-12 schools and community colleges.

All income would come from higher taxes on commercial real estate worth over $ 3 million if it were revalued to market value every three years, while the rules of Prop. 13 for house and apartment revaluation remain intact only if they are sold. Prop. 13 limits the property taxes to 1% of the estimated value, whereby the taxes increase annually by a maximum of 2%. The change in taxation only for commercial real estate is why Prop. 15 is referred to as a split roll tax.

The K-12 money would be distributed across the country through the Local Control Funding Formula, which provides additional money for low-income, nursing and homeless students and English learners. The remainder of the additional revenue would remain local and distributed to the county and city councils where the commercial properties are located.


Corporate donors have surrendered in the battle over the Proposition 15 split-roll tax

As predicted, the initiative has built strong support in the Bay Area and Los Angeles County, whose county and city governments would have earned most of the additional revenue from higher business tax revenues. But it followed in San Diego County, Kern County, and the rest of the more conservative inland California country.

In recent years Prop. 15 has been proposed by the Schools and Communities First Coalition, composed of community and education stakeholders and funded primarily by the California Teachers Association and other public service unions. Despite the coronavirus pandemic that thwarted the grassroots voluntary door-to-door campaign planned by the proponents, proponents saw this choice as the best way to reform an anti-tax initiative they recognized for their contribution blamed for underfunding chronic schools.

They assumed massive Democratic turnout in an anti-Trump election and fought on the issue of taxing large landowners like Disney Corporation and oil refineries to fund schools and governments that have faced major funding cuts due to the pandemic. They also counted on the support of younger voters who do not see Prop. 13 as the “third rail” of state policy.

Proponents of Prop. 15 indicated that commercial and industrial properties pay low taxes as some have not been revalued in decades. Some owners have funded property sales to avoid a change of ownership that would have triggered a revaluation. Proponents of Prop. 15 called the measure a structural reform that is necessary to counteract increasing income inequality.

It did not highlight the fact that Prop. 15 should be phased in from 2022-23, which will not immediately relieve schools and local governments from a pandemic-induced recession.

For over a year Prop. 15 was the leader in most polls, as it was just under 50% in the last polls and a significant percentage of the undecided voters were present.

In a massive post-Labor Day TV ad campaign, corporate opponents, led by the California Business Roundtable, portrayed this as a threat to already suffering small businesses who would pass higher property taxes on to them through higher rents. Opponents, even without evidence, implied that Prop. 15 proponents would be the next to appeal to homeowners for tax increases.

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The first coalition of schools and communities took observers by surprise by overtaking opponents for most of the year. At the end of September, contributions to campaign committees supporting Prop. 15 were $ 41.8 million, compared to $ 33.2 million for Committee No. 15 in Prop. 15. But business and real estate interests promised that Yes-to-prop. 15 campaign by election day, and they did. A month later, $ 40 million more – enough to flood voters with television commercials against the measure – brought No funding to Prop. 15 to $ 73 million, compared to the $ 67 million Yes to Prop. 15 were collected.

The total of 140 million US dollars raised made Prop. 15 the second most expensive initiative on the ballot. Most appealing were proponents of Proposition 22, which would exempt gig companies like Uber and Lyft from a new state law requiring them to treat workers as employees. Led by Uber, Lyft, and delivery service DoorDash, backers raised more than $ 200 million.

The California Business Roundtable PAC alone donated US $ 39 million to Campaign No. 15, followed by the California Business Properties Association with US $ 2.25 million.

The California Teachers Association was the top contributor for Prop. 15: $ 19.8 million; followed by $ 11.7 million from Facebook founder Mark Zuckerberg and his wife Priscilla Chan; and the Service Employees International Union, which represents non-teaching staff in schools and many district and community workers.

The state’s top lawmakers, all Democrats, dozens of mayors, district overseers, and even Democratic presidential candidate Joe Biden and vice-presidential candidate Kamala Harris also endorsed Prop. 15. Governor Gavin Newsom, too, although his support was nominal. He didn’t advocate it, unlike former Governor Jerry Brown, whose campaign for a temporary increase in income and sales taxes in 2012 was pivotal in getting it passed.

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