At some point I hope that people realize that we can not keep attacking businesses with ever more increasing taxes, regulations. That is a large part of what makes everything so expensive to live here and why you have an exodus of people and businesses leaving this state.

I m voting NO on Prop. 15 and 21. If more business close, there will be less sales tax going to schools.

Below is a clip from a NO on prop. 15 opponent.

“There is a misnomer that this will have zero impact on small business and that is not true,” said Rachel Michelin, President, California Retailers Association, referring to Proposition 15. “It will have a drastic impact, particularly on small and independent retailers who frankly are the cornerstone of local communities.”

Many speakers argued that the property tax increase, passed on to small business owners through the leases they have on their shops, will hit hard women and minority owned businesses. Julian Canete, President & CEO of the California Hispanic Chambers of Commerce, said, “We must remember 48% of workers are employed by small businesses. Let’s be clear the tab will ultimately be paid by small businesses and consumers. We will pay more for everything we buy and use.”

Previously, the California Teachers Association led public employee unions in pressuring the governor to endorse the $12 billion property tax increase, claiming the money is needed to offset the revenues lost during the pandemic.

However, the business associations say business closures and job losses will be even greater if the heavy property tax is levied on businesses. Cedrick White, owner of White’s Concrete Construction in Lancaster and President & CEO of the Antelope Valley Black Chamber of Commerce, said 20-30 percent of the Chambers’ member businesses have closed because of COVID-19 and many others have furloughed staffs. Saying that most of his member organizations rent their properties, “If Proposition 15 passes that’s going to put the majority of the rest of our members out of business.”

The Retailers Association’s Rachel Michelin noted that sales taxes local governments rely on will disappear if retail shops have to close down because of the new property tax increase.

In response to Gladus that said:

“At some point I hope that people realize that we can not keep attacking businesses with ever more increasing taxes, regulations. That is a large part of what makes everything so expensive to live here and why you have an exodus of people and businesses leaving this state.”

Taxes are NOT an attack on businesses, this is a REFORM that is long overdue You said:

“I m voting NO on Prop. 15 and 21. If more business close, there will be less sales tax going to schools.”

The majority of funding for schools are collected by property taxes and you know it If you look at the website “ Financing California’s Public Schools “ here (Web Link it turns out 58% is funded by the state, (which does not count county sales taxes) 22% is funded by Local property taxes, 10% other local taxes, 9% Federal, and 1% lottery. From the page “ “ (Web Link 65% of the state taxes are Personal Income Taxes. So if you want to quantify how much funding goes to schools budgets that come from Sales Taxes, the best portion of it is 58% times 35% or 20% of funding. You grossly oversell that argument you said:

“Below is a clip from a NO on prop. 15 opponent.

“There is a misnomer that this will have zero impact on small business and that is not true,” said Rachel Michelin, President, California Retailers Association, referring to Proposition 15. “It will have a drastic impact, particularly on small and independent retailers who frankly are the cornerstone of local communities.”

Citing a private trade organization is not a good argument. And in reality most “Retailers” MAY employ local workers, but if the customers are gone, then that is a far more damaging problem. The GRIM reality is that with the COVID/AB5 population decline, it is inevitable that many businesses are hurting or going out of business. Property taxes are the least of the problems. You went on to say:”


“Many speakers argued that the property tax increase, passed on to small business owners through the leases they have on their shops, will hit hard women and minority owned businesses. Julian Canete, President & CEO of the California Hispanic Chambers of Commerce, said, “We must remember 48% of workers are employed by small businesses. Let’s be clear the tab will ultimately be paid by small businesses and consumers. We will pay more for everything we buy and use.””

You now use a FAKE governmental agency to argue your point. The “CHAMBER OF COMMERCE” is just a PRIVATE TRADE GROUP, they really only advocate for their members and serve no purpose for the public at all. You said:

“Previously, the California Teachers Association led public employee unions in pressuring the governor to endorse the $12 billion property tax increase, claiming the money is needed to offset the revenues lost during the pandemic.”

YES the loss of state income taxes, and federal funding due to unemployment. The loss of Residential Property Tax income due to the wave of foreclosures and the inevitable drop in prices or value in the Residential market when the unemployed cannot pay rent or mortgages. You said:

“However, the business associations say business closures and job losses will be even greater if the heavy property tax is levied on businesses. Cedrick White, owner of White’s Concrete Construction in Lancaster and President & CEO of the Antelope Valley Black Chamber of Commerce, said 20-30 percent of the Chambers’ member businesses have closed because of COVID-19 and many others have furloughed staffs. Saying that most of his member organizations rent their properties, “If Proposition 15 passes that’s going to put the majority of the rest of our members out of business.””

Another PRIVATE CHAMBER OF COMMERECE argument. The GRIM reality is that the DEMAND in the markets are dropping, and that DEMAND puts companies out of business, NOT property taxes. If a business is running well, has stable business, and is able to negotiate for price reductions on say “COMMERCIAL RENT”, these businesses should be fine. But if you watch the video titled “ 90% of restaurants not making rent in NYC - leases can't be renegotiated. Businesses are dying. “ (Web Link You said:

“The Retailers Association’s Rachel Michelin noted that sales taxes local governments rely on will disappear if retail shops have to close down because of the new property tax increase.”

Just another “SPIN” of politics, with nothing but a person with a “CONFLICT OF INTEREST” simply trying to fake out the public.

Closing a loophole that allows businesses to avoid paying their fair share of property tax is a good thing, in my opinion. I agree with the author of this article.

Ask your local business owner if they support Prop 15. If they own the property they're doing business in, then the local business will pay the increased property taxes -- something many can ill afford to pay, especially during this pandemic. If they're on a NNN (Triple-Net) lease, it is the business owner who will pay the increase in property taxes, not the property owner. If you're aiming for Big Corporations, passing Prop 15 will hit far more small businesses than big businesses. The $3M floor won't protect many small businesses around here. Also, ask where most of the Northern California taxes will go... Local schools? No.

Bottom line... Don't rely solely on biased one-sided flyers or opinion pieces like this article or even my own comments above. Do your own research and make an informed decision when you vote.

JohnB,

Just understand that Prop 13 was sold to help homeowners and NOT businesses.

The voters were suckered into give commercial properties a tax break. The writers of Prop 13 knew it but didn't tell the homeowners it because they knew it would have been rejected.

This is just a REFORM that is long overdue. These businesses take on the risk of changing business climates. Their properties are going to get reassessed, the lenders are going to demand changes in mortgages and rents. This is also LONG overdue.

I just hope the homeowners finally say to these commercial properties, "get off my shirttails" regarding the benefit of Prop 13.

California needs commercial property owners to do their part in contributing to our schools and communities. Since prop 13 passed, homeowners have gone from paying 50% of the statewide property tax burden to paying 70%, — commercial property owners need to pick up their fair share. The protections of prop 13 never made sense for commercial property owners for the reasons the author states, including that, unlike our homes, commercial property ownership rarely changes hands (and can be financially engineered never to do so), so the corporate property tax base never gets marked to market rates, like our homes do. Most importantly, commercial property is *income producing* which generates money to pay the taxes (unlike your home). The claims by the various chambers of commerce that paying their rightful share of property tax will crush and kill corporations and result in job losses are completely predictable (what else are they going to say?) and have been shown by economists to be false. What will happen is that the corporations will be a little less profitable for their rich owners — I think we (including the rich corporate owners) can all live with this. Make the smart choice, Californians! Vote YES for Prop 15 and let’s make California a decent, livable state once again (as it was before prop 13, when our schools were top in the nation).

If the threshold had been $10M - $25M (or probably higher), that would've captured medium or big business. As written, the $3M level captures the majority of business properties in the Bay Area. To sell this as making the Google's pay their taxes is inaccurate. The large majority of commercial owners are far smaller. They will have property taxes (with no phase in) rise by up to 10x immediately. This will in many cases be passed on to tenants...think of all the tenants in say, your local corner strip mall...salons, cafe's, sandwich shops, etc.

This is terrible for small business, and at the worst possible time, as those businesses are already struggling.

And by the way, our local schools will see most of their increase go to the State. Basic Aid districts may end up worse off in the long run.

Prop 13 needs some fixing, but this was hastily written without full study of the consequences, and is the wrong way.

In response to Small Business You said:

“If the threshold had been $10M - $25M (or probably higher), that would've captured medium or big business. As written, the $3M level captures the majority of business properties in the Bay Area.”

Income is not a definition of a small business, only that the small business administration defines it as 500 employees or less. So let’s make it clear that income is not a distinguishing factor. And most importantly, the “Property Values” determine the taxes and not the income as well. These businesses are free to get a reassessment by the County if they feel it is over-evaluated. BUT, that will probably impact your “equity” that you have used in the past to get loans. I am certain that lenders or creditor have been providing equity at a substantially higher level than your property tax basis. You said:

“To sell this as making the Google's pay their taxes is inaccurate. The large majority of commercial owners are far smaller. They will have property taxes (with no phase in) rise by up to 10x immediately. This will in many cases be passed on to tenants...think of all the tenants in say, your local corner strip mall...salons, cafe's, sandwich shops, etc.”

On what basis are you claiming that taxes will go up 10X? This is nothing but fiction to try to convince the voters that the situation is by default “unfair”. The REALITY is that in 2017 the homeowners pay 71% of the property taxes in California versus 28% for commercial and industrial properties. Found here (Web Link BUT, the amount of Commercial and Industrial land use is California outweighs the land use for residential properties. Prop 15 will return BALANCE to this exploitation of public resources that the Commercial and Industrial entities have used without just compensation. You said:

“This is terrible for small business, and at the worst possible time, as those businesses are already struggling.”

The REFORM of taxes cannot wait any longer, you’re just wishing to put it off indefinitely. It has been more that 20 years and it is time to get it done. You said:

“And by the way, our local schools will see most of their increase go to the State. Basic Aid districts may end up worse off in the long run.”

Again, what basis do you have regarding this claim? To me this again is just fiction, please show us any unbiased research to substantiate this? You said:

“Prop 13 needs some fixing, but this was hastily written without full study of the consequences, and is the wrong way.”

You had 20 years to refine it. This is not going to happen unless the VOTERS force it to happen. If you can prove the results of the REFORM is as you say, you are free to put a better ballot measure in the election. But WITHOUT any improved proposal, you are not dealing with the problem, you are just taking advantage of it.

Our schools have been lacking funding ever since Prop 13 capped property taxes. And since companies are immortal, they will never lose their 1970's assessment as long as they don't sell. It's way past time that companies pay their fair share, and exempting small businesses (under $3M in property) is very reasonable.

We need Prop 15!! Thank you for writing this article!