By KEVIN FAULCONER
PUBLISHED: October 28, 2020 at 12:04 p.m. | UPDATED: October 28, 2020 at 12:04 p.m.| Originally Posted on OC Register
There is a good chance you used to get your haircut at a place like Cut and Dry Barbershop.
Locally owned and operated, I was there a few months ago chatting with Joeferson Gawaran, a proud Marine Corps. veteran who started the parlor from scratch. He has struggled through the ups and downs of California’s COVID-19 regulations, but there is a new obstacle on the November ballot that further threatens the existence of millions of small businesses like Joeferson’s.
If the pandemic hasn’t driven your favorite hair stylist, restaurant or market out of business, Proposition 15 may just do it – while making services, food and energy more expensive for all of us.
In a few short months, California has lost billions of dollars, millions of jobs, and thousands of lives due to the coronavirus. The last thing we should do in a time of great pain and uncertainty is manufacture a new reason for people to worry for their future.
But Prop. 15 would do just that, unraveling one of the few remaining threads holding our economy together by imposing the largest property tax increase in California history.
For decades, Californians have been able to sleep well knowing that even though the world around them is changing, a predictable and affordable property tax bill is guaranteed in the state constitution thanks to Proposition 13, the landmark people’s initiative that has kept millions of Californians from losing their homes and businesses.
Even as California becomes more unaffordable each year, Prop. 13 has stood as one of the last ironclad financial protections keeping afloat neighborhood shops, family farmers, daycare centers and more. During economies both good and bad, California’s governors and top officials have understood that this limit on property taxes is a cornerstone that cannot be chipped away without dire consequences.
But now, as small businesses are struggling to hang on after complying with orders to shut down, Prop. 15 may prove to be the end of the line. It will eviscerate Prop. 13’s critical safeguards, overturning forty years of tax stability and enacting a $11.5 billion tax increase on our economy.
The obligation to foot the bill will quite often be passed on to tenants, not property owners. Many small businesses, like Joeferson’s barbershop, rely on “triple net” lease agreements in which property taxes are the responsibility of the renter, not the landlord. They will have to choose between paying higher rent, laying off workers, or raising prices.
A point of particular concern is Prop. 15’s effect on historically disadvantaged communities. Few are under more strain than Black, Latino and Asian/Pacific Islander-owned small businesses – which analysis has shown are less likely to receive government loans during this crisis. These entrepreneurs and their employees are in real danger of losing their livelihoods.
California residents will also feel the pain. Prop. 15 will lead to steep tax hikes on California’s agricultural economy, including the family farmers and ranchers who produce our food supply. Barns, dairy farms, producing grapevines, mature fruit trees and nut trees and more will be exposed to higher taxes. This not only harms one of California’s most important industries and the rural communities it supports – it will also increase food prices at the worst possible time.
Your power bill could be affected, too. Prop. 15 will hurt California’s green economy by increasing taxes on sustainable energy infrastructure like solar – making renewables more expensive and eliminating incentives to build more. Gas prices, which already got a tax hike of their own a few years back, could go up yet again because Prop. 15 impacts gas stations and infrastructure used to produce gasoline.
It was already getting harder every year to earn a decent living and get ahead in our state, and Prop. 15 will make things even worse. This is why so many are opposed, including social justice leaders like the NAACP, every statewide ethnic chamber of commerce, small business advocates, and hundreds of local and regional elected officials, including mayors like me.
The pandemic is already threatening to extinguish the American Dream for millions of Californians. We should not make a terrible situation worse by adding higher taxes to the burdens we must bear. Instead of letting politics artificially depress our ability to recover, now is the time to stand with our neighbors – and regrow a healthy economy from the bottom up.
Kevin Faulconer is the mayor of San Diego.