When school districts put parcel taxes before voters those taxes should comply with state law requiring equal treatment of business and residential properties.  Some school districts in Alameda, Davis, San Leandro, West Contra Costa, and Los Angeles have been violating that principle by proposing and passing parcel taxes that tax parcels at different rates.  In December, a three-judge panel in a case involving the Alameda Unified School District unanimously confirmed that this is a violation of state law.

The issue stems from Proposition 13, the 1978 property-tax cutting initiative, and Proposition 62, a 1986 initiative clarifying that new local government taxes must be voter-approved. To implement the two initiatives, the Legislature passed laws setting rules for new local taxes. Among the requirements, parcel taxes must “apply uniformly to all taxpayers or all real property within the district.”

Now there is a call to rewrite the law and allow different rates for these parcel taxes to be applied to business properties and residential.

AB 59 (Bonta; D-Oakland) School districts: parcel taxes, would specify that the provisions requiring uniform application of taxes shall not be construed as limiting a school district from assessing taxes in accordance with rational classifications among taxpayers or types of property, thereby abrogating the holding in Borikas v. Alameda Unified School District.

Advocates of this policy would like to be able to charge a much higher property tax to commercial properties versus residential properties. This would make it easier to pass such taxes with the voters in the district by keeping the rate low on actual voters while hiking them on businesses who are unable to vote.

We oppose this measure and are educating members of the Legislature about how such a policy would simply be a negative drag on the economy by making it easier to raise taxes on job providers.

Here is a story that provides a good summary and links to background material.  This issue will be with us throughout the foreseeable future and we hope you will become informed and help us advocate against changing this law as it is unfair to commercial property owners, managers, and tenants.

© 2007-2012 Building Owners and Managers Association of California (BOMA Cal)