On June 4, voters within the boundaries of the Los Angeles Unified School District will be deciding whether or not to level a new parcel tax on property owners that would boost funding for schools.
The highly controversial Measure EE would impact all property owners, but would hit multi-family and commercial property owners disproportionately because, unlike other parcel taxes, this one would be based on the square footage of improvements.
Specifically, a new assessment of $.16 per square foot per year would be added to existing property tax bills starting in the 2019/2020 tax year, which begins on July 1, 2019. That means the owner of a 2,000 square foot home will pay an additional $320 per year in property taxes, while the owner of a 100,000 square foot industrial building will pay an additional $16,000 per year.
Proponents of the measure, which sunsets after 12 years, claim it will raise approximately $500,000,000 per year and they tout the fact that the new rules would exclude homeowners over the age of 65 and others enrolled in other types of disability programs.
Even if it passes, which remains very uncertain just days before the election, existing and subsequent legal challenges may keep the final outcome in limbo for months. But, that has not deterred the LAUSD, the office of Mayor Garcetti or United Teachers Los Angeles (UTLA) from pushing hard to get the measure approved.
The Howard Jarvis Taxpayers Association and the California Business Properties Association have led the charge for the opposition.
Why are we bringing this up? The answer is: if it passes, it sets a dangerous precedent for similar proposals all over the state, and would give local governments and school districts a way around the protections afforded to property owners via Proposition 13, which has been a tax firewall in California since 1978.
As you likely know, current law limits the annual increase in the base tax levy to 2%, but does not apply to parcel taxes and municipal assessments that are paid in addition to the base levy.
So, keep your eye on LA next Tuesday because what happens there might be coming your way soon. In our next post, we will discuss several other campaigns to increase property taxes at the state level that present a clear and present danger to property owners. Stay tuned.