May 4, 2026
By Jennifer Ito, Justin Scoggins, and Manuel Pastor
Major budget shortfalls are forcing governments and public institutions throughout California to make difficult decisions. The mounting fiscal challenges underscore the limitations of incremental budget adjustments and temporary revenue measures. There is increasing pressure to pursue new revenue options—and revisiting the structural foundations of our property tax system is one of the options likely to be considered.
Since 2015, we have estimated the potential revenue gains if commercial / industrial property were assessed at fair market value as opposed to the current system which is based on acquisition value. Our current findings: Assessing all commercial / industrial real property at fair market value could bring in an additional $18.2 billion to $25.1 billion statewide (with a mid-growth scenario estimate of $21.4 billion) in 2028-29, which is the earliest year in which such a reform could be implemented.
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Check out the previous Getting Real About Reform reports below.
