By Jim Miller
By now you’ve seen them all: the litany of ads and mailers against Proposition 15 featuring worried small business owners, angst-filled barbers, and other advocates for hire trying to scare you that Proposition 15 is aimed at small businesses. You’ve even seen a handful of craven local politicians parroting corporate talking points and throwing their communities under the bus in an effort to court the Chamber of Commerce set during campaign season by opposing a measure that would bring billions of dollars into education and vital social services.
What does Proposition 15 actually do? It will require that commercial property valued at more than $3 million be reassessed at fair market value every three years.
- This closes a loophole that large corporations have used for decades to avoid paying their fair share of property taxes.
- The richest 10% of corporate properties will provide 92% of the revenue.
- Prop 15 specifically exempts all residential properties and agricultural land, maintaining full Prop 13 protections for homeowners, renters, and agriculture.
Thus, as I noted in an earlier column on this measure, it’s simply false to say that it will afflict the local Mom and Pop shop or pizza spot.
Why the lie then?
As Bobbi Murry recently observed in “Cash of the Titans: Prop 15’s Big Spending Opposition” in Capital and Main :
Optics are everything in politics, and if you’re a big business interest with a stake in a ballot initiative fight in California, it’s always better to look like the Little Guy – i.e., the corner hardware store or a local homeowner. You definitely don’t want to look like the Big Guy—like, say, BNSF Railway, one of the largest freight lines in North America, or the Irvine Company, which is wholly owned by Donald Bren, whom Forbes deemed to be one of the world’s wealthiest people.
BNSF and Irvine Company are only two among the many corporate interests that own thousands of acres of land in California that are taxed at rates set in the 1970s. Not surprisingly, they are among the entities that have flooded serious money into the fight against Proposition 15, the Schools and Communities First initiative, a November ballot measure that could change their tax assessment structure and cost them millions more yearly.
Michael Hiltzik further documents where the money behind the “No on 15” side is coming from in his recent LA Times column “Who’s Opposing Proposition 15? Land Developers and Big Business” noting that:
According to the most recent disclosures filed with state campaign finance authorities, the big spenders on the “No on 15″ side include land developers, agricultural interests and golf and country clubs.
All told, they and other opponents have assembled a war chest of more than $20 million to fight the measure.
This shouldn’t be surprising, because those are among the business interests that have benefited handsomely from the obstacles to reassessing commercial and industrial properties built into Proposition 13.
Hence, it’s clear that large corporate interests are smart enough to know that nobody will feel sorry for them if they openly complain about losing a tax loophole, so they are using small businesses and homeowners as human shields in their efforts to protect their interests. Forget the fact that the economic elite have done obscenely well over the course of the pandemic while ordinary Americans suffered, that’s just not good political marketing. It’s simply more effective for them to hide behind the mythical barbershop owner rather than openly complain about having to pay more for their country clubs.
A Billionaire FOR Closing Corporate Tax Loopholes?
Enraging some of his fellow billionaires, Mark Zuckerberg and his wife Chan have broken ranks and their philanthropic group is helping to fund the Yes on 15 campaign along with labor and community groups because, as they put it, “We’ve seen decades of disinvestment in local communities in California, and now with Covid-19, we’re seeing schools struggling, hospitals and clinics struggling, and local services struggling even more deeply. This proposition is a major opportunity to unlock a stable stream of resources for our communities that need it most.” (insert link: https://www.protocol.com/proposition-15-california-schools-mark-zuckerberg)
So far, they are one of the only notable exceptions of California’s business sector to recognize that having a secure revenue source for education and social services is actually better for commerce than deepening inequality and austerity. Go figure.
What’s Up with the Commercial Against Prop 15 using the NAACP?
One of the most galling aspects of the No on 15 campaign is that it has enlisted the NAACP’s Alice Huffman as a hired gun. As Cal Matters reported:
Huffman’s political consulting firm has been paid more than $1.2 million so far this year by ballot measure campaigns that she or the California NAACP has endorsed. She’s been paid by campaigns funded by commercial property owners fighting the tax increase, corporate landlords opposed to expanding rent control and bail bondsmen who want to keep the cash bail system . . .
Though Huffman spent much of her career with the teachers union, her consulting work now consists largely of helping corporate campaigns that are fighting against organized labor. Unions are against changing the labor law with Prop. 22, and for raising commercial property taxes with Prop. 15, adding new requirements on dialysis clinics with Prop. 23 and ending cash bail with Prop. 25.
This has not gone down well in activist circles with, as Cal Matters notes, many people in the African American community criticizing Huffman’s use of her position:
“I feel like it’s a conflict of interest and I think it’s misleading to the public,” said Carroll Fife, an officer of the Oakland chapter of the NAACP who disagrees with the state organization on several ballot measure endorsements. “It’s unfortunate. Politics is gross.” . . .
“She has the right to make money as we all do,” said Anthony Thigpenn, a community organizer in Los Angeles who heads the California Calls advocacy group and supports Prop. 15. “But when it’s something that’s using a community-based organization’s brand, and particularly when it’s taking positions… that are not in the interest of the communities that organization has advocated for and championed, that is disappointing and sad.”
Thigpenn said he believes increasing commercial property taxes with the so-called “split-roll” approach in Prop. 15 is a matter of racial justice.
“Black communities in California suffer most from the lack of funding for schools and community colleges, which are typically gateways for people to have career paths and livable wages and good jobs,” he said.
Thus, unfortunately, the Huffman commercials represent nothing more than a royal sell-out by a leader peddling corporate lies and using her position to cash in on an election cycle bonanza. Et tu, Alice? Apparently so.
The Big Picture: Why Proposition 15 Really Matters
In the end, Proposition 15 matters not just because it will bring in much needed revenue to help fund a just recovery and the future of our state, but because it is part of a larger social justice movement that directly deals with the issue of economic inequality and its myriad negative effects.
As Fred Glass puts it in Jacobin :
Progressive tax policy. Though variable in form, fundamentally it is a way to redistribute society’s wealth more equitably. In this instance, Prop 15 proposes to remove one hated cornerstone of the early neoliberal policy edifice in California: it closes a corporate tax loophole that robs billions of dollars a year from schools and social services. The measure has been anticipated since 1978 by everyone who understood how badly that year’s Proposition 13 crippled the Golden State’s tax structure.
In nearly every other state, commercial property assessment is conducted on the basis of current market value. Yet in California, the tax paid by commercial property owners is 1 percent of its purchase price, no matter how long ago that transaction occurred or how much the property has appreciated since.
With an inflation factor capped at 2 percent per year, large corporations like Disney and Chevron underpay current market valuations by tens of millions each year. In a non-pandemic year, Prop 15 would raise ten to twelve billion dollars, or roughly 5 to 6 percent of the state’s pre-pandemic budget . . .
It will be a concrete reform on behalf of the California working class, manifested in modest improvements in the daily lives of millions of students and other recipients of public services: transit riders, health clinic patients, parents who need childcare, and people who lack adequate firefighting services within the expanding perimeter of climate change–induced wildfires.
So, please, dear reader, don’t let the negative ads distract you. A yes vote for Proposition 15 is a vote for a just recovery and social justice in California. It will not hurt the ordinary Californians that the corporate-funded ad campaigns say it will. They are trying to fool you because they know if you see the issue clearly, you’ll understand that this reasonable reform closes a corporate tax loophole for folks who don’t need it in the service of the greater good for all Californians.
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