Economic Justice and Prop 15
PROP. 15 WILL MAKE IT FAIR
By Chris Thompson
In July, we began a series-long look at our county’s unprecedented economic pain brought about by years of fires, floods, and now COVID-19.
Today’s column will examine one proposed remedy coming before voters this November: Proposition 15(“California Proposition 15, Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative”). Organized by The Schools and Communities First Initiative, Proposition 15 is designed to close corporate property tax loopholes as it works in partnership with our highly popular Proposition 13 to protect California homeowners, renters, and small business owners.
Let’s review how this will work, according to CARA (California Alliance For Retired Americans):
First, we return forty years to the passage of Proposition 13 (“the People’s Initiative to Limit Property Taxation”) in 1978, which was passed to address soaring property values and rising property taxes. Championed by antitax activist Howard Jarvis, it ensures property values may not grow by more than 2% annually, and market value reassessments may only occur with a change of ownership. Sounds good, right? The problem, however, is Prop.13 applies to commercial property as well as residential property- which has resulted in some unfortunate consequences. That is, because some large commercial properties rarely change hands they are rarely reassessed. And because these very large non-residential commercial properties are rarely reassessed, they fail to pay their actual market value tax rate. Here’s an example: Chevron…is saving over $100 million a year by benefiting from Prop.13’s Corporate Loophole. As a result of these loopholes, 72% of the tax burden in our state is carried by residential owners and just 28% by commercial owners.
How does Prop.15 fit into this? It will close this Corporate Loophole AND keep in place Prop.13’s protections of all homeowners, tenants, and small business owners. As League of Women Voters’ President Helen Hutchison puts it, “Californians now have the opportunity to reform a 40 year injustice.”
Some question whether Prop. 15 will be bad for business. No, again according to CARA, in fact by closing the Prop.13 Corporate Loophole, Prop.15 will put an end to landowners holding on to property for decades without doing anything productive with it. In fact, only 8% of commercial properties get 77% of the tax savings from this Corporate Loophole. Under the current system, two identical businesses side-by-side may pay drastically different property taxes. This penalizes new businesses by making them subsidize their established competitors’ property tax. By leveling the playing field and bringing a minority of older commercial properties up to fair market property tax rates, we will be creating a healthier and more competitive business climate.
In our upcoming Oakmont Progressives’ columns, we will continue to explore Proposition 15 and why we should support it. If you are not on the Progressives’ mailing list but wish to be added, please email us at: amatothompson@gmail.com STAY WELL!
By Chris Thompson
Today’s column is the second installment in a discussion of Prop.15 that will appear on the November 2020 ballot.
How does what Prop. 15 promises to deliver affect the economic inequities of our community? Who will benefit the most from signing such a prop into law? Who are the leaders endorsing this initiative?
First, passage of Prop 15 in California will reclaim over $11 billion per year for k-12 schools, community colleges and local communities according to the state fiscal analyst. For Sonoma County that comes to about 185 million dollars per year.
Using 60% of this money to help public schools is one of the strongest ways to positively affect people’s lives-including and especially low- income people of color. We all know that educating children is one of the great equalizers in our democracy. And, unfortunately, even before the pandemic, California schools ranked near the bottom in per-pupil funding and had the largest class sizes in the nation. So, now as we witness Covid-19 decimating our communities and institutions, we will need all the help we can get to deal with the destruction that will linger for years.
The remaining 40% will be used as communities see fit, and in our case, that could translate into funding for local services like firefighters and first responders; affordable housing and homeless services; senior centers; public transportation and para-transit services; libraries; parks; and health clinics and trauma centers. One thing for sure, we certainly don’t need to be reminded of our dependence on first responders during the fires of October 2017.
We voters have the opportunity in November to help by joining with community, labor, educators, parents, and faith-based organizations in this fight for economic justice. They include 250 organizations. Here are just some:
Dolores Huerta
California League of Women Voters
California Federation of Teachers
Green Party of California
ACLU of Northern California
ACLU of Southern California
Parent Teachers Association of California
California Sierra Club
Our future columns will continue to dig into the specifics of Prop.15 and other issues that affect us here at Oakmont.
As we approach the fall elections, the progressive movement in America is changing. The pandemic and the aftermath of the George Floyd killing has highlighted the systemic inadequacies of our country. From racism, to a broken health care system, to climate crisis, to threats to fair elections, many Americans are aware of the need for big structural change. To address this the Oakmont Progressive Club seeks your input as we reset our future agenda. On Monday, September 14thwe will host our General Zoom Meeting, we hope you will join us.
Since 2017, Sonoma County has experienced huge trauma and loss. The triple catastrophes of fire, flooding and now pandemic have added to a county already besieged by a homeless/housing crisis. The toll has been horrific in terms of lives lost and disruption in every way imaginable. Not surprisingly, the economic shock has been severe.
As a result, our County is struggling financially with a possible $50 million budget deficit (Press Democrat, June 10 2020)
Through the guidance of the Board of Supervisors of Sonoma County, led by Chairperson and Oakmont resident Susan Gorin, efforts are underway to address our new reality. However, due to the wreckage of these last few years as well as the impacts of the necessary shelter-in-place orders, Sonoma County is facing bankruptcies, unemployment, increased housing insecurity, school closures and inadequate services for the vulnerable homeless and mentally ill.
Supervisor Gorin :”The current economic environment and pending state/federal financial support … makes this budget process one of hardest we’ve experienced… while our staff are monitoring revenue sources and projecting declines, the true impacts are not fully known at this time.”(Gazzette May 15 2020)
Given these unprecedented challenges, where can we look for some relief? How about returning $185 million every year to Sonoma County according to the State Legislative Analyst? How about closing the property tax loopholes used by wealthy corporations in California?
Schools and Community First has been officially designated for the ballot as Proposition 15 Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.
According to the California Alliance of Retired Americans the SCF has 4 goals:
-Restore $11 billion a year for California’s schools and local community services such as first responders, senior centers, libraries, parks, and health clinics
-Keep Prop.13 for all homeowners, renters, and small business owners
-Close the Prop.13 Corporate Loophole by taxing non-residential commercial properties at current market value
-Support small businesses by giving them a tax break that will save them thousands every year by eliminating the tax on business equipment
In this and our upcoming Oakmont Progressives’ columns, we will explore the Schools and Communities First (SCF) Ballot campaign- and why we should support it.
As the Oakmont Progressive Club starts meeting again this summer in a zoom format, we will encourage all Oakmonters to join us in discussions around this topic. STAY WELL!
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