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City Council Takes No Position on Increasing Commercial Property Taxes

Councilwoman and educator Katherine Lee brought prop 15 to the council's agenda. If passed, the measure will change commercial property taxes, increasing public funding for schools and services. Screen capture of meeting streaming, Aug. 10, 2020.

Location

Alhambra , CA

Despite Alhambra’s need for more revenue, the City Council took no position this week on the Schools & Communities First ballot initiative, which would change the basis for commercial property taxes, and probably increase them, if passed in November.

The Schools & Communities First ballot initiative, now Proposition 15 on the November ballot, would change the basis of commercial property taxes to current market value from the purchase price.

Councilwoman Katherine Lee spoke first in the cautious debate and weighed the merits of taxing business against funding for schools. She brought up her firsthand experience as a teacher with student desks breaking mid-lesson. But In the same breath, Lee said the threshold for taxing at current market value, as proposed by Prop 15, would probably hurt Alhambra businesses although the threshold in valuation would be $3 million. She said she had “to take a neutral position on this” and the city should “let the voters decide.”

Councilman Jeff Maloney, Vice mayor David Mejia and Mayor Ross Maza each had varied reasons for agreeing the city should take a neutral position.

Maza suggested that Prop 15 could be a precursor to “getting rid of Prop 13,” the 1978 constitutional amendment that severely limited property tax increases, intended to assist elderly homeowners who were being forced out of their homes by rising property taxes. However, it has applied to commercial and industrial property as well as residential even as values have increased with inflation.

Council member Adele Andrade-Stadler argued in favor of supporting Prop 15, noting after Maza’s comments about Prop 13 “don’t hold water” which caused a heated exchange.

In one public comment, Chris Olson, who will challenge Maloney in the November election, wrote a comment in favor of the proposition to support schools and economic recovery and to oppose systemic racism. Olson said the decline in public education and services were caused by the tax system, which she said most negatively impacted minority communities and continued system racism.

In other action, the council voted unanimously to write a letter of opposition to President Trump’s executive order to exclude from the Census count those living in the U.S. without permission. The census is mandated in the U.S. Constitution to count all persons living in the United States to determine proportional representation and taxation.

Council members all had individual reasons for supporting the letter. Mejia said he is not in city government for national issues but is concerned for local residents and “if you’re here, you should be counted.”

The city council heard a presentation for rezoning the City of Alhambra, which has not been done in totality since 1986. According to the zoning consultant there have been amendments since, but not an overhaul to align with the Vision 2040, Alhambra’s newest General Plan, land use map.

Martha Miller of Miller Planning Associates laid out steps for the council to take. Miller Planning Associates is in the background research and analysis phase. She said the city will not be ready to draft the regulations, development standards or administrative processes until late this year or early 2021. A draft of the new zoning code will not be ready until the late spring or summer of 2021.

Residents can sign up for zoning updates here.

Watch the council meeting here or see the agenda here.

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1 thought on “City Council Takes No Position on Increasing Commercial Property Taxes”

  1. California Proposition 15 – deceptively called the “Schools and Communities First” initiative” – is an attack on Proposition 13. It creates a “split roll” where commercial and industrial properties are treated differently than residential properties.

    Commercial and industrial properties with a combined value of more than $3 million would be taxed at current market value, instead of purchase price.

    This means that many businesses in the City of Alhambra would have substantially increased operating costs. Those costs translate into increased prices for goods and services you (the consumer) pay, fewer jobs, or businesses closing.

    Let me give you a local example. My son operates a retail outlet in downtown Alhambra. He occupies approximately 25% of the building and a restaurant occupies the other 75%. Both businesses have the standard NNN (“triple net”) lease agreements with the property owner, i.e. property taxes and insurance are paid on a pro rata basis by the tenants. In the event of a reassessment taxes could potentially increase $20,000. That translates into another $5,000 annual expense for my son and $15,000 for the restaurant.

    In this time of Covid-19 local businesses are already struggling, and placing this additional burden on them is unfair. Recovering from this pandemic is going to take these businesses a long time – assuming they survive.

    As a candidate for City Council, Fourth District, I oppose Proposition 15. Please join me in voting NO.

Do you have a question you would like to ask Alhambra candidates?

Ask your Alhambra City Council OR your Alhambra Unified School Board Candidates a question ahead of the 2020 elections!