Reso 2020-122 Proposition 15 Support

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RESOLUTION THE CITY COUNCIL OF THE CITY OF SAN LEANDRO RESOLUTION NO.2020-122 RESOLUTION OF THE CITY OF SAN LEANDRO CITY COUNCIL TO SUPPORT PASSAGE OF PROPOSITION 15, ALSO KNOWN AS THE CALIFORNIA SCHOOLS AND LOCAL COMMUNITIES FUNDING ACT OF 2020 WHEREAS, California local public agencies, including cities, counties, schools, and special districts, levy property taxes on property owners based on the value of their property. Property taxes raise around $65 billion annually for local governments, about $2 billion of which is attributable to business personal property; and WHEREAS, about 60 percent of statewide property tax revenue is allocated to cities, counties, and special districts, while the remaining 40 percent is allocated to schools and community colleges; and WHEREAS, county assessors determine the taxable value of property, county tax collectors bill property owners, and county auditors distribute the revenue among local government; and WHEREAS, each property owner's annual property tax bill is equal to the taxable value of their property multiplied by their property tax rate. Property tax rates are capped at 1 percent plus smaller voter approved rates to finance local infrastructure. A property's taxable value generally is based on its purchase price. When a property is purchased, the county assessor assigns a value to the property, typically its purchase price. Each year thereafter, the property's taxable value increases by 2 percent or the rate of inflation, whichever is lower. This process continues until the property is sold and again is taxed at its purchase price. In most years, the market value of most properties grows faster than 2 percent per year. As a result, under this system the taxable value of most properties is less than their fair market value; and WHEREAS, partially as a result of the current property tax system cities and counties in California have experienced underinvestment and significant budgetary challenges over the past four decades that have impacted the critical services and infrastructure that residents rely upon; and WHEREAS, California's current property tax system allows some commercial and industrial properties to avoid regular reassessment because changes in ownership have been hidden from transparent disclosure; and WHEREAS, academic researchers at the University of Southern California (USC) demonstrated that a majority of commercial property owners in California already pay close to market value, making the current system inequitable among businesses, benefitting large owners who have held land for long periods of time; and WHEREAS, such practices result in millions of dollars of forgone governmental revenue that would otherwise help to support the provision of essential services in local communities; and WHEREAS, according to the California Legislative Analyst's Office, Proposition 15, otherwise known as the California Schools and Local Communities Funding Act of 2020, could reclaim up to $12.5 billion in property tax revenue every year by reassessing commercial and industrial properties at market rates; and