The IECA voted to oppose Proposition 15, which would destroy Proposition 13’s property tax protections and enact the largest property tax increase in California history. The measure will raise taxes on business property, which will ultimately get passed on to consumers in the form of increased costs on just about everything people buy and use, including groceries, fuel, utilities, day care and health care.
High taxes, mandates, and regulations already make it difficult for California businesses to compete. An almost $12 billion yearly property tax increase will prevent businesses from hiring new employees or even from keeping existing ones. The stability and predictability brought by Proposition 13 has allowed California businesses to compete nationally despite the high cost of doing business here. This proposition will force many to close or relocate to a state that actually welcomes business investment.
While the measure provides for delayed implementation on properties occupied by small businesses, it does not exempt them. Smaller businesses will be even less able to absorb a sudden rent increase due to reassessment. Those small businesses that can’t raise prices will need to cut costs, by reducing employee compensation, benefits, or by reducing the number of employees.
While supporters claim the property tax increase is about more money for schools, nearly 70 percent of the new tax money doesn’t go to schools. Instead, it goes to the state and local governments to spend however they want. There are absolutely no education reforms and zero requirements that any of this new tax money will be used to improve school performance, reduce class size, or expand science, art, music, and after-school programs.
Amid an unprecedented economic crisis that has raised the unemployment rate in some areas to levels only seen during the great depression, our communities cannot afford a tax hike like the one proposed by Proposition 15.