Maiming Prop. 13: Not Just OPM

OPM is "Other People's Money".  As Election Day approaches, we are faced with a major threat to Proposition 13.  Newsom and our likely-State Senator Josh Becker have both come out in favor of the "split roll" to start raising taxed on commercial property valued above $3 million.  Not sure where in the Bay Area you might find any commercial property worth less than $3 million, but that is the number Prop. 15 authors have chosen.  We touched on some of the ramifications for small businesses on NNN leases here.

The Sunday Chronicle editorial endorsing Ann Ravel for State Senate in San Jose let this slip through in an attempt to appear balanced

Fearless is a word that keeps coming up in characterizing Ravel’s professional life.

It was evident in our editorial board interview in which she brought up her disagreement with us on Proposition 15, which would change the landmark Proposition 13 of 1978 to tax commercial property at market value. Her critique was detailed and grounded in the reality facing small businesses within her district. She also pointed to the costly burden it would impose on county assessors.   We may not agree with Ravel on that issue, but we appreciate the diligence she applies to issues.

Ya gotta love that last sentence. Translation:  We cannot dispute that she has thought this out better than we have, but we're gonna stick to our guns no matter what.

A better paper, the Orange County Register had this to say on Sunday

Proposition 15 would impose higher property taxes on commercial and industrial properties in California of up to $12 billion annually. That cost would be imposed on every Costco, Walmart, Safeway, gas station and shopping mall in California as well as the 80 percent of small businesses that lease their property. Only those who are economically illiterate would think that those costs would not be passed along to consumers in the form of higher prices.

As destructive as the radically increased cost of living that Proposition 15 would impose on consumer/taxpayers is, it pales in comparison to the larger threat that 15 poses to homeowners. Specifically, proponents and supporters of split roll have made it clear that coming after commercial property is but the first step in their incremental destruction of Proposition 13 in its entirety – including the protections it affords to homeowners.

You can click through to read the history lesson on who has said they are coming after residential property next.  If you think this is just about OPM, you are wrong.

Comments

[Everything's Jake]

Unfortunately, the polling thus far suggests it may pass by a slim majority. Another nail in the coffin for CA businesses that lease these buildings.

[Gavinius Caesar]

I hereby declare a new tax on the citizens of Californium. All landowners will bow to Sacramentium and pay their tithes. There shall be wheat and wine distributed from the proceeds as I see fit.

[Laura]

It's polling well as they are saying it will go towards teachers salaries and schools. The CTA is supporting it. California votes for anything with "school" in front of it. I believe though that it's all slated for the general fund and very little will go to education. Those with little time to read prior to voting will just see "schools" and vote for it.

[Gerald Weisl]

Carrying the theme of "Other People's Money," many voters like the idea of soaking the rich, thinking this will cause wealthy landlords to pony up and pay their share. But, in fact, most of the little, independent businesses here in town have a triple net lease. This means it's the business, not the landlord, that pays the property owner's tax assessment. I recall hearing one Broadway merchant saying if Prop 15 passes, he will be closing his store. I dare say, he will not be alone.

[[email protected]]

Do you believe there should be some sort of "adjustment?"

[Gavinius Caesar]

I, Gavinius Caesar, declare there must be adjustments. There shall be no quotations.
The people must be made to pay. In order for more Bread & Roses to be distributed, the Empire, my Empire demands more tithes.

[Bobby]

Prop 15 won’t just maim prop 13. It’s the 1st step in a full repeal of prop 13. Just watch. Sac politicians can never have enough. Why eat only a piece of pie, when you can eat the whole thing!

[[email protected]]

Dear GV,(Sounds like an STD) I believe you are being facetious.
Your response sounds like it just poured out of you "Pie Hole."
In case you have shared your real feelings, I apologize.
Oh, Oh, I think I may have just been exposed to GV.

[Paloma Ave]

If you think voting yes on Prop 15 will only affect businesses and not affect you, then think again. If you raise anyone's taxes, you raise everyone's costs.

If business expenses go up, what you pay for products or services goes up.
And, once politicians get their foot in the door, do you really think they will stop with just business? Politicians, especially Democrats, have an insatiable need for more of your money.

Prop 13 was the greatest protection ever passed to help taxpayers. When I moved into my home 30+ years ago, I was paying over $3,500 a year in property taxes, while my neighbor was paying $900 year. Now I am paying $6,800 a year and I have multiple neighbors paying over $32,000 a year!

For you younger people, who will be paying a high amount in the beginning, remember it can only go up 2% a year, under Prop 13. This is something you can budget for.

[BillyGBob]

So, I assume you're pro-rent-control then. Or is being able to budget your housing expenses a privilege accorded only to those who own property?

[Barking Dog]

Looks like you got yourself a raise there BillyBob with with the free market driving down rental rates like crazy right now. How are going to budget the extra money you will have in your pocket each month?

[BillyGBob]

I’ll use it to offset the salary cut I took to avoid laying off staff. Or enjoy it for the first time in 25 years because every single rent dip since then has been wiped out by a massive increase during the subsequent recovery.

[Barking Dog]

Thats right BillyGBob, there aren't any homeowners in Burlingame who have made the same sacrifices you described above. Only renters have sacrificed to call Burlingame home.

[BillyGBob]

Completely irrelevant to the main premise that many on this site seem to believe that stability should only apply to home owners. Also, I wasn’t trying to martyr myself or play a holier-than-thou card. Rather, I was trying to inject some empathy...something that many frequent commenters on this site seem to lack.

[Barking Dog]

Does the lender who holds the note on my mortgage have empathy if I cant make the payment?

Sandy Arnott or Betty Yee have empathy if I can't pay my state and county taxes?

PG&E? Verizon? Costo? Cheveron? Safeway? Any empathy if I cant make those payments?

Name any bureaucrat or activist who thinks Prop 15 will not harm small independent family businesses. Any empathy from them when they shut down because their landlord hands them a 2K per/month increase...just to cover taxes in their NNN lease.

[BillyGBob]

Sigh...you're changing the subject again. I'll bring it back to key point of my comment: homeowners who want stability in their monthly expenses shouldn't b!+@h about renters who want similar stability in theirs.

[resident]

The old "You have no empathy" ploy most often used by people with the narrowest sense of empathy. Here's another ploy you will recognize. "You have to earn your stability. No one else should have to pay for it."

[Barking Dog]

BGB...we can go round and round on Prop 13 on the residential side and wouldnt agree. Thankfully the residential side of isnt ask risk at this moment. Advocates have stated openly stated residential Prop 13 next on the list, no matter which direction Prop 15 goes.

How does voting yes on 15 make your residential rental rates continue to decrease?
How does yes on 15 benefit the local retailer/small business owner who rents space for their local small businesses?
Does yes on 15 raise or lower your rental rate for your business and the employees you sacrificed a portion of your salary to save their jobs?
How does repelling Prop 13 residential lower your housing rental rates?

[BillyGBob]

I wasn't debating the pros or cons of 13 or 15 at all. I was simply highlighting that many on this site want one set of rules for themselves and another set for others.

[Barking Dog]

Thanks for the empathy tutorial
I recommend other renters not to take your tutorial on the benefits of yes on Prop 21

[Libertarian]

Nothing in Prop 15 requires the increased taxes to go to schools.
Nothing.
It will go to the general fund and be wasted like most of CA’s excessive Progressive taxes.
Jealous renters will vote for it.
Haters like Cindy will vote for it.
The unemployed like Dunham will vote for it.
The rest of us will keep working hard and will vote NO.

[MiltonKeyes]

BillyGBob,

Your playing both sides of the coin. This has nothing to do with empathy.

"homeowners who want stability in their monthly expenses shouldn't b!+@h about renters who want similar stability in theirs."

As a renter, you want the benefits of low rent without the risk of losing property value and the ability to simply walk away from the landlord when you feel like it. You are also shifting the financial burden to the group of land owners while you "free ride" on their backs.

Owners have to take risks to enjoy the benefits. You are only evaluating the upside (appreciation, stability, etc) and ignoring the risks that many fact.

There are plenty of places in California where you can buy a home and enjoy the security you are advocating.

If you can name a financial instrument that performs like you describe above- Low cost and limited risk with a no-cost walk away clause, we would all like to know about it.

[Barking Dog]

San Mateo County Board of Supervisors unanimously endorsed Prop 15 today.

[libertarian]

The San Mateo Board of Supervisors lifetime politicians want more taxes to spend unwisely to buy more votes?
Shocking.

[Paloma Ave]

Of course the San Mateo Board of Supervisors endorsed Prop 15.

Liberal politicians ALWAYS WANT MORE OF TAXPAYER MONEY.

They will never have enough!