Los Angeles mayor, teachers’ union, and school district support a 2020 ballot initiative to amend California’s property tax structure

On January 22, 2019, an agreement was announced to end the six-day Los Angeles teachers’ strike. The agreement summary said the teachers’ union, school district, and Mayor Eric Garcetti (D) would endorse and advocate for a 2020 ballot initiative to amend California’s property tax structure.
The ballot initiative, which qualified for the election on November 3, 2020, in October 2018, would require commercial and industrial properties to be taxed based on their market value. As of 2019, California Proposition 13, passed in 1978, requires properties to be taxed based on their purchase price, with annual increases equal to the rate of inflation or 2 percent, whichever is lower. The ballot initiative would continue to tax residential properties based on purchase price, leading to a tax system referred to as split roll.
The California Legislative Analyst estimated that the initiative’s changes would generate between $6.5 and $10.5 billion in additional revenue each year. Some of that revenue—about $500 million, according to the legislative analyst—would be used to supplement decreases in income tax revenue, as state law allows businesses to deduct property tax payments from their income taxes. The ballot initiative would require 40 percent of the remaining $6.0–$10.0 billion to be distributed to school districts and community colleges.
UTLA president Alex Caputo-Pearl said, “We’ve all got a lot of work to do to make sure that that ballot initiative passes.” The UTLA is on the steering committee of the Schools and Communities First campaign, which is sponsoring the ballot initiative. The union’s political arm has contributed $350,000 to the campaign, as of the most recent campaign finance reports through September 30, 2018. Schools and Communities First had raised $3.71 million. Veronica Carrizales of California Calls, which supports the ballot initiative, said the campaign hopes to raise $45 million.
California Business Roundtable president Rob Lapsley, who opposes the ballot initiative, said the teachers’ strike “was all to start a campaign for split roll. It is not about the kids.” Lapsley said opponents of the ballot initiative are prepared to raise at least $100 million.
In California, ballot initiatives can be withdrawn after qualifying for the ballot. Gov. Gavin Newsom (D), speaking about the ballot initiative, said, “My desire is to use this as an exercise in bringing the parties together to see if we can compromise on a more comprehensive tax package.” If negotiations do occur, the various parties involved would have until 131 days before the general election, which is June 25, 2020, to reach a deal.