Want to prevent the acceleration of development in the Valley and help prevent a spike in food prices?
Then vote against Proposition 15 on the Nov. 3 ballot.
Proponents argue that it is taking a scalpel supposedly to injustices created by passage of Proposition 13 in 1978 that allowed mega-corporations to skirt paying their “fair” share of proper taxes.
Opponents say it is just the first incision to gutting Proposition 13’s protection of homeowners,
If you think that a school of piranhas can take just one nibble if you dip your toes into infested water then vote yes on Proposition 15.
Before we touch on the practical reasons why one should reject the measure titled “Increases funding sources for public schools, community colleges, and local government services by changing tax assessment of commercial and industrial property” let’s take a jaunt down memory lane.
Proposition 13 passed in 1978 in a shocker to the sharks in Sacramento that go into a greedy frenzy for taxes to support their pet projects and social engineering schemes at every chance they get. The tax revolt that stunned America was because in a number of parts of California state law required property that wasn’t changing hands to adjust to the value of property that was changing hands within a set distance was sending property taxes sky high.
That meant if you owned a house on a half-acre with a house on it in downtown San Jose that you bought for $50,000 and ended up retiring after working as a teacher and someone nearby sold their half-acre with a house on it to a fast-food chain for $500,000 to build a restaurant, your home and land would be reassessed as if it were worth $500,000.
Defenders of the unjust tax burdens would argue if you were getting squeezed out you could simply move. Such a stance assumes you want to move and a buyer would come along and offer you $500,000 as well.
Call it what it is — government indifference to the little guy that’s not cashing in.
You can babble all you want about social injustice and such but most of the people caught in the government’s “it’s-your-problem” attitude about taxes aren’t the rich, upper middle class, or big corporations. They are working blue collar stiffs and the vanishing middle class.
Speaking of social injustice, proponents pushing passage of Proposition 15 to readjust the value of residential, commercial, industrial, and agricultural property worth more than $3 million to provide $6.5 billion to $11.5 billion in new taxes, makes two erroneous assumptions.
The first the new taxes are justified because Proposition 13 has deprived the state and city of revenue since it passed in 1978 explaining what they perceive as the deplorable shape of government.
In the mid-1990s, the state’s impartial Legislative Analyst provided research that showed from 1982 to 1992 California schools were funded $3 billion above what it would have taken just to stay even with inflation and enrollment growth. Also in the late 1980s the state returned $1 billion to taxpayers.
How was this possible? The state found new ways to impose taxes and fees especially on businesses of which small ones took the brunt.
The reason the proponents say passage of Proposition 15 would create up to $11.5 billion a year in “new taxes” is because the tax loss from Proposition 13 has already been backfilled in ways that would make a con artist who makes money via shell games envious.
The other erroneous assumption is $3 million is the line at which California can start doing a Dracula act on businesses and farms and there would be no more damage than a mosquito bite that draws blood.
Yes, $3 million sounds like a lot if you’re making $15 an hour or if you own or are carrying a mortgage on a house costing $300,000. But here’s the rub. The San Joaquin Valley is dominated almost completely by family farms, especially in Stanislaus County. Little farm acreage is either in the Williamson Act that imposes a much lower tax rate or is part of a perpetual agricultural easement.
They are often long-held family farms or heavily mortgaged.
Dairies, for example, have been notorious for years with starvation margins thanks to milk prices. As a result dairies have been folding or collapsed into bigger operations in a bid to secure economies of scale.
There is currently a dairy with 224 acres for sale on Mariposa Road in eastern San Joaquin County for $6.7 million. Should that dairy sell for $6.7 million and Proposition 15 pass other dairies that aren’t selling would be reassessed at what they could sell for if someone were to buy them.
It doesn’t take a psychic to get a read on what would happen especially to dairies that have been in families for generations. Surging property taxes would most likely by a fatal blow. Worse yet, those within a clear path of urbanization would be snapped up post haste by developers who would be seen as throwing farmers a lifeline.
It’s long been said that the only way a dairy farmer can afford to retire is to sell their dairy to another dairyman that doesn’t mind being chained to his job seven days a week and often 12 hours a day or sell to a developer.
If you look at other farms for sale — including two on Roberts Island east of Lathrop across the San Joaquin River — you can see where Proposition 15 will take viable agricultural operations that are keeping San Joaquin County from turning into the Santa Clara Valley. One is 340 acres of garlic, tomatoes, and safflower listed for $5.4 million and the other 505.7 acres of corn, alfalfa, and tomatoes listed for $7.6 million.
Agricultural land rarely changes hands. There is a reason for that. It takes three years or so for almond orchards and grape vineyards to start yielding. A “livable” yield from grapes and almonds doesn’t start for several years later.
It is a long-term investment that would not work if it was subject to taxation at “what it could sell for.”
You may think someone who owns more than $3 million in farmland is a millionaire but you might want to take a closer look. The odds are many of us are better off financially especially when it comes to the guaranteed income we get when working for the hours we do.
For further perspective, a lot of us “own” $600,000 homes yet we still have mortgage balances that we haven’t made a dent in paying down just like loans on ag land that farmers “own”.
Keep in mind if Proposition 15 passes Sacramento would smell blood in the water. And just like a shark with a one-track brain they will keep coming at the rest of Proposition 13 until they rip it to shreds.
Passing Proposition 15 opens Pandora’s Box.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Ceres Courier or Morris Newspaper Corp. of CA.