San Diego Mayor and City Council Pursue Illegal Attempt to Impose Tax Hike Rejected by Voters

San Diego Mayor and City Council Pursue Illegal Attempt to Impose Tax Hike Rejected by Voters

Measure C from March 2020 Failed – But Now City Politicians Hungry for Cash Seek to Invalidate the Certified Results of the Election

In light of revelations that San Diego Mayor Todd Gloria and the City Council will seek to impose a hotel tax hike rejected by voters in the March 2020 election, the following statement is released from former San Diego City Councilman Carl DeMaio:

“San Diego politicians are seeking to illegally impose a massive tax hike that was rejected by voters. This desperate and dubious move is nothing short of an attempt to invalidate the outcome of the March 2020 election and thwart the will of the voters.

While sold with the window dressing of expanding the Convention Center and funding a number of popular programs, Measure C would actually have imposed a blank-check tax hike that would allow politicians to spend the money any way they pleased. Despite millions spent on this scam measure, voters wisely rejected it at the ballot box in March 2020.

City politicians are now claiming that an unrelated and unresolved legal theory regarding vote thresholds for approving tax hikes sponsored by citizens’ initiatives could somehow allow them to impose the Measure C tax hike despite its clear rejection by voters. This is simply untrue. In fact, city voters were explicitly told on their official ballot materials that Measure C would require a two-thirds vote. Period. No judge will now allow politicians to reverse in practice what voters were told on their ballots.

Make no mistake about it: Reform California and a broad-based coalition of opponents are prepared to oppose this reckless and illegal effort to impose this ‘Zombie Tax’ on San Diegans. Unfortunately, this doomed effort to create the ‘Zombie Tax’ will only end up costing taxpayers millions in legal fees for the negligence of our city politicians on this matter.”

Watch: Town Hall with Carl DeMaio on Reform California’s 2021 Strategic Initiatives

Watch: Town Hall with Carl DeMaio on Reform California’s 2021 Strategic Initiatives

Reform California scored many wins in the 2020 election (defeating tax hikes like Prop 15 and local tax hike/bond measures as well as flipping several legislative seats). Our 2021 plans build on those successes!

Among the initiatives discussed in this virtual Town Hall:

• Election Integrity Initiative: Making sure we stop fraudulent practices that weaken the security of our electoral process.
• Defeat Gavin Newsom: Update on the Recall signature drive and our comprehensive efforts to build the case for stopping Gavin Newsom’s extreme agenda and electing a new common-sense Governor ASAP
• Blocking Tax Hikes: As state and local politicians look to fill budget holes, Reform California has prepared a rapid response program to stop any tax hike proposals.
• Electing Reform Leaders: Redistricting is underway statewide and we must ensure fair and reasonable districts are drawn – and we must recruit, train and support solid candidates for office in 2021 and 2022

No on Prop 15: Carl DeMaio and Small Business Owners Warn of New Home-Based Business Tax

No on Prop 15: Carl DeMaio and Small Business Owners Warn of New Home-Based Business Tax

Carl DeMaio and a coalition of small business owners and advocates today held a press conference to urge voters to vote NO on Prop 15 – the massive statewide property tax hike on the November ballot. 

“We already know that Prop 15 immediately imposes a massive tax hike on California’s small businesses, but we are also now learning that the fine print in Prop 15 also authorizes state politicians to impose a new tax on home-based businesses,” said Carl DeMaio, Chairman of Reform California.

DeMaio and the small business coalition he assembled decried the cost of Prop 15’s tax hike to small businesses that are already struggling with Covid-19 lockdowns and an economic downturn. 

“If Prop 15 passes, it will be the final nail in the coffin for many of these struggling small businesses and the job losses will be immense,” DeMaio warned.

DeMaio also released analysis of Prop 15 provisions that he says authorize the state legislature to impose a new tax on home-based businesses. 

“Many small businesses are operating out of people’s homes and Prop 15 opens these home-based businesses up to a massive tax hike,” DeMaio warned.

Prop 15 would increase property taxes on commercial, retail, industrial and other properties to the tune of $11 billion.  Prop 15 is seen as just the first step of a two-step effort to completely repeal Prop 13 from 1978 and increase property taxes on all properties – especially single family homes.

How Prop 15 Authorizes Politicians to Impose a Tax on Home-Based Business

Initiative Text: What Prop 15 Says

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(c)(4)(B):

“The Legislature shall also define and provide by statute that limited commercial uses of residential property, such as home offices, home-based businesses or short-term rentals, shall be classified as residential for purposes of paragraph (2) of subdivision (a).” 

AG 2019-0008, Amdt. #1, Initiative Sec. 6, adding Cal. Const. Art XVIII A, Section 2.5(c)(2):

“’Mixed-use property’ means real property on which both residential and commercial or industrial uses are permitted.” 

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(c)(4)(B):

“The Legislature may provide for an exclusion from reassessment for the commercial share of mixed use property provided seventy-five percent (75%) or more of the property by square footage or value is residential. 

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(d)(1):

Subject to paragraph (2) of this subdivision, upon reassessment pursuant to subdivisions (a) and (b), each commercial and industrial real property with a fair market value

of three million dollars ($3,000,000) or less shall not be subject to reassessment pursuant to paragraph (1) of subdivision (a) and shall be assessed as required by Section 2 of this Article.

Initiative Impact: What Prop 15 Does

How We Know Prop 15 Gives The Legislature the Power to Tax Residential Property Used For a Home-Based Business:

Prop 15 gives the State Legislature the power to define and provide by statute what constitutes “limited commercial uses of residential property.” The Legislature could define “limited commercial uses of residential property” in any number of ways—including how much income a home-based business generates.

If a home-based business does not meet the Legislature’s definition of “limited commercial uses of residential property,” it will be treated as “mixed-use property,” as defined by the initiative, because it has both a residential and commercial use.

In doing so, the Legislature would create two classes of home businesses: one that qualifies as “mixed-use property” subject to reassessment and another that will retain residential designation with “limited commercial use.”

How We Know the Legislature Can Pick and Choose Which Businesses to Raise Property Taxes On:

The Legislature may provide an exclusion from reassessment for the commercial share of mixed-use property but is not obligated to under Prop 15. This is purely optional and is subject to the political whims of state politicians.

This discretion gives the Legislature the power to impose higher property taxes on the commercial portion of home-based businesses with mixed-use designations. The Legislature’s power to define “limited commercial use” will allow politicians to pick winners and losers among home-based small businesses and target those homeowners higher property taxes.

How We Know Residential Properties of ANY Value Operating a Home-Based Business Can Be Reassessed:

The three-million-dollar exclusion from reassessment is for “commercial and industrial real property” only. Thus, it will not apply to a home-based business that is designated as “mixed-use property.”

There is no dollar threshold for “mixed-use property” in Prop 15, so a residential property of any value operating a home-based business could be subject to higher property taxes.

What Prop 15 Means for Residential Property Used For Home-Based Businesses:

Prop 15 strips long-standing Prop 13 protections from residential property. Prop 13 limits property tax increases to 2% annually, providing certainty to homeowners and small businesses that they can afford their taxes in the future. Prop 15 allows state politicians to raise property taxes on millions of home-based businesses – meaning skyrocketing property taxes for homeowners.

More Californians than ever are conducting businesses from their homes, and Prop 15 gives the Legislature the power to raise taxes on these homeowners. If past actions by the Legislature are an indication of future behavior, it’s likely that many home businesses will be subject to Prop 15’s higher property taxes.

Taxing home businesses is just another step towards the full repeal of Prop 13 for all homeowners.

Carl DeMaio Launches Campaign to Protect Prop 13 and Stop Property Tax Hikes

Carl DeMaio Launches Campaign to Protect Prop 13 and Stop Property Tax Hikes

This is it – politicians in Sacramento have launched their all-out assault to repeal Prop 13 and raise taxes this November. Carl DeMaio, Chairman of Reform California, has launched the resistance to save and protect Prop 13 and organized a statewide virtual town hall where he outlined the campaign to protect Prop 13 and gave instructions on how supporters can join in the efforts in their areas.