On April 2, 2020, the campaign Schools and Communities First reported filing 1.7 million signatures for a ballot initiative to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, rather than their purchase price. At least 997,139 signatures need to be valid. The ballot initiative is the campaign’s second version of a proposal to enact what is known as split roll in California.

The first version of the ballot initiative (17-0055) qualified for the ballot on October 15, 2018. On August 13, 2019, the campaign Schools and Communities First, which is behind the proposal, announced that signatures would be collected for a revised version of the ballot initiative (19-0008). Tyler Law, a campaign spokesperson, said that the campaign would not withdraw the qualified initiative from the ballot until the revised initiative qualifies. Law said, “The committee’s got the money. We’re going to get it on the ballot.”

Both versions of the ballot initiative would amend the state constitution to require commercial and industrial properties, but not residential properties, to be taxed based on their market value. Proposition 13 (1978) requires that residential, commercial, and industrial properties are taxed based on their purchase price. The tax is limited to no more than 1 percent of the purchase price (at the time of purchase), with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower.

Both versions would also create a process in the state constitution for distributing revenue from the revised tax on commercial and industrial properties. First, the revenue would be distributed to (a) the state to supplement decreases in revenue from the state’s personal income tax and corporation tax due to increased tax deductions and (b) counties to cover the costs of implementing the measure. Second, 60 percent of the remaining funds would be distributed to local governments and special districts, and 40 percent would be distributed to school districts and community colleges.

Some of the major differences between the versions include the threshold at which commercial and industrial properties would be taxed at market value, which small business-owned properties would continue to be taxed based on purchase price, how revenue would be allocated for schools, and when the changes would go into effect. While the original version was expected to generate between $7.00 and $11.00 billion in revenue per year, the new version is expected to generate between $8.00 and $12.50 billion per year.

Schools and Communities First received the endorsements of several current and former Democratic presidential candidates, including Joe Biden, Bernie Sanders, Elizabeth Warren, Pete Buttigieg, and home-state Sen. Kamala Harris. Schools and Communities First, along with several allied political action committees, raised $19.57 million through March. The California Teachers Association Issues PAC was the largest contributor.

Californians to Stop Higher Property Taxes is leading the campaign against the ballot initiative. Opponents include the California Business Roundtable and California Taxpayers Association. Californians to Stop Higher Property Taxes, along with the Protect Prop. 13 PAC, raised $3.13 million through March.

There could be upwards of 12 citizen-initiated ballot measures on the ballot for November 3, 2020, in California. Some of the campaigns, however, have suspended signature gathering in response to the coronavirus pandemic, which could make qualifying their initiatives more difficult before the recommended submission deadline of April 21, 2020. Sponsors that fail to file signatures before the recommended deadline could still have their initiatives placed on the ballot for 2022.