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November 3, 2020 Ballot <br /> <br />Page 2 of 3 <br />purchase price. This change is put in place over time starting in 2022. The change does not start before <br />2025 for properties used by California businesses that meet certain rules and have 50 or fewer <br />employees. Housing and agricultural land continues to be taxed based on its original purchase price. <br />Some Lower Value Properties Not Included. This change does not apply if the owner has <br />$3 million or less worth of commercial land and buildings in California (adjusted for inflation every <br />two years). These properties continue to be taxed based on original purchase price. <br />Reduce Taxes on Business Equipment. The measure reduces the taxable value of each business’s <br />equipment by $500,000 starting in 2024. Businesses with less than $500,000 of equipment pay no <br />taxes on those items. All property taxes on business equipment are eliminated for California businesses <br />that meet certain rules and have 50 or fewer employees. <br />Fiscal Effects <br />Increased Taxes on Commercial Land and Buildings. Most owners of commercial land and <br />buildings worth more than $3 million would pay higher property taxes. Only some of these property <br />owners would start to pay higher taxes in 2022. By 2025, most of these property owners would pay <br />higher taxes. Beginning in 2025, total property taxes from commercial land and buildings probably <br />would be $8 billion to $12.5 billion higher in most years. The value of commercial property can <br />change a lot from year to year. This means the amount of increased property taxes also could change a <br />lot from year to year. <br />Decreased Taxes on Business Equipment. Property taxes on business equipment probably would <br />be several hundred million dollars lower each year. <br />Money Set Aside to Pay Costs of the Measure. The measure sets aside money for various costs <br />created by the measure. This includes giving several hundred million dollars per year to counties to <br />pay for their costs of carrying out the measure. The measure would increase the amount of work <br />county assessors do and could require changes in how they do their work. Counties could have costs <br />from the measure before new money is available to cover these costs. The state would loan money to <br />counties to cover these initial costs until new property tax revenue is available. <br />New Funding for Local Governments and Schools. Overall, $6.5 billion to $11.5 billion per year <br />in new property taxes would go to local governments. 60 percent would go to cities, counties, and <br />special districts. Each city, county, or special district’s share of the money depends on several things <br />including the amount of new taxes paid by commercial properties in that community. Not all <br />governments would be guaranteed new money. Some in rural areas may end up losing money because <br />of lower taxes on business equipment. The other 40 percent would increase funding for schools and <br />community colleges. Each school or community college’s share of the money is mostly based on how <br />many students they have. <br /> <br />YES/NO STATEMENT <br />A YES vote on this measure means: Property taxes on most commercial properties worth more <br />than $3 million would go up in order to provide new funding to local governments and schools. <br />A NO vote on this measure means: Property taxes on commercial properties would stay the same. <br />Local governments and schools would not get new funding. <br /> <br />150