(KGTV) -- Billions of dollars could be at stake with Proposition 15.
If passed, it would tax some commercial properties based on current market value instead of when it was bought. It could potentially bring in anywhere between $6.5 to $11.5 billion in new funding to local schools and governments, according to the Legislative Analyst’s Office.
Brandon Foster is a small business owner in Oceanside. Even though he rents the space where his two gift shops are located, he is against Prop. 15.
“We already have been told by our landlords, if that passes, they will be passing on that cost to us,” Foster said. “The landlords, a lot of them, have vacancies and things like that where they are struggling themselves. I understand why they need to pass that cost onto us.”
The ad for No on Prop. 15 highlights a small business owner who said he had to close twice during the pandemic. The ad said Proposition 15 would raise “property taxes and rents on small business and they admit homeowners are next.”
The change in property tax assessment would apply only to commercial or industrial properties valued at more than $3 million. It would tax those properties at current market value rather than when it was bought.
Residential and agricultural properties are not affected under Prop. 15.
“They are very emotional, as ads are supposed to be,” said Lynn Reaser, chief economist at Pt. Loma Nazarene University.
The ad has major funding from the California Business Roundtable, California Business Properties Association, and the California Taxpayers Association.
“You would see a big effect especially on these older companies, not necessarily the big companies, but all companies that bought their properties some years ago,” Reaser said. “They could face more problems in terms of survival.”
The ad lacks detail about time frame for Proposition 15, not making clear that it would take effect in 2022.
While the ad said homeowners are next in line for property tax increases, Reaser said “no one knows” if that is actually true.
“All the businesses, they’re all going to have to pass on the money, the expense, to somebody,” Foster said.