By Teri Bontrager
Santa Barbara County Farm Bureau Executive Director
What state imposes the highest average property tax burden on farmers and ranchers? Unfortunately, when it comes to taxes and regulations, you will usually be right guessing California every time — and this November, California voters will be asked either to double down on this state’s high-tax reputation by approving Proposition 15 or to join the Santa Barbara Farm Bureau in protecting our farms and ranches by voting no.
The measure on the Nov. 3 ballot would weaken Proposition 13, the 1978 tax-reform measure that limits property tax increases, by establishing a “split-roll” tax that would reassess commercial and industrial property, including agricultural facilities.
Maybe there’s nothing certain but death and taxes, but voters should be aware: Creating a new split-roll tax with Proposition 15 would result in the largest property tax increase in state history — and would likely mean the end for more California farms. This $11.5 billion tax increase on California businesses would come at a time when California farms, ranches and agricultural businesses could lose up to $8.6 billion this year alone due to COVID-19.
Special-interest groups and unions have been strategizing to roll back Proposition 13 property tax protections for 40 years. The last attempt came in 2015, when Gov. Jerry Brown acknowledged a split-roll property tax scheme was overly complex and stated, “I’m not supporting a split roll.”
Backers of Proposition 15 have tried to claim it exempts agriculture and may even have a few of our fellow farmers believing that. But make no mistake: Agriculture is not exempt.
Granted, the initiative says it exempts agricultural land — but it would raise taxes on what is considered “real property,” such as improvements or fixtures. Even state Attorney General Xavier Becerra, in the initiative’s ballot summary, acknowledges that only agricultural lands would be protected from tax increases.
So, what property would be reassessed? Improvements and fixtures liable for tax increases would include barns; mature fruit and nut trees; producing vineyards; wineries; irrigation systems; and even solar panels. You could also add dairy barns, processing facilities, machinery garages, crush facilities and henhouses — all considered commercial and industrial property under the measure — to the list of property that would be reassessed.
By the way, this isn’t just the opinion of Farm Bureau and other opponents. Backers of Proposition 15 acknowledged as much in an “Agricultural Land Fact Sheet” they distributed last February.
Proposition 15 would severely undermine the enormous investments farms and ranches have made to add value to our commodities. In other words, the improvements farmers and ranchers have made in the last 40 years, whether for product marketability or environmental stewardship, would be exposed to a property tax hike under Proposition 15.
The worst part of any tax is the core intention to manipulate and/or control human behavior; it is this indirect cost of a tax that can ultimately be the most damaging. Proposition 15 would create a powerful incentive for local governments striving to maximize property tax revenues to rezone agricultural land to commercial and industrial property and deny variances for agricultural use of the land in that rezoned area.
The proponents concede, “If vacant land is zoned commercial and industrial, it could be reassessed.” This would increase the already powerful incentives to remove land from agricultural use and intensify land use decisions made solely on tax revenue potential.
According to the U.S. Census of Agriculture, an average California farmer’s or rancher’s annual property tax bill totals $17,299 — the most of any state. Proposition 15 and its proposed property tax increases would not only make California agriculture less competitive — it would make our farms and ranches less viable.
If you want to help assure a brighter future for California agriculture, join the Santa Barbara County Farm Bureau and vote no on Proposition 15. Visit www.cafarmersagainstprop15.com to join the Farm Bureau coalition.