Will CTA Put A Split-Roll Initiative on the 2010 Ballot?

Posted on 19 November 2009

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By Robert Cruickshank

For several years now the California Teachers Association, one of the state's largest and most powerful labor unions, has been considering the idea of putting an initiative on the ballot to close the loophole in Prop 13 that gave commercial property owners the same protections as residential property owners. Now they are closer than ever to bringing it before voters.

Earlier this month, CTA filed two initiatives to close that loophole. They are both pending at the AG's office for title and summary. Here's how they'd work:

• Tax commercial property at fair market value, and frequently reassess property taxes at fair market value (instead of locking in a value and rate, as Prop 13 currently does). The main difference between the two initiatives is how that reassessment is accomplished.

• Provide a small business exclusion of up to $1 million
• Double homeowners' exemption from $7,000 to $14,000 (as a sweetener to voters)

It's a clever approach, one that almost certainly polls well with voters, since the initiatives offer tax relief for residential owners and small businesses - making it crystal clear, at least in the initiative language, that this is NOT an attack on the sacred cow of residential property protections offered in Prop 13.

CTA has said it will decide in January whether to go ahead and collect signatures to get this on the ballot. If they decide to do so, they will have no problem whatsoever getting the required amount. Of course, it's also possible they're just holding this out there as a threat to the Legislature in order to prevent them from cutting education funding any further.

The right-wing isn't waiting for CTA to decide. They're already trying to defend their corporate allies by framing this something that will hurt consumers and not the rich, as Joel Fox argued:

How much of that new $70 tax savings will be left when increased property taxes on business are passed on to consumers? Probably nothing. The overall tax increase contained in the split roll proposals is in the billions of dollars.

Taxes were increased $12.5 billion last February. But, while that tax increase was temporary, the split roll tax increase would be permanent and will cost consumers much money in the end. What Fox doesn't explain is that the February tax increases haven't hurt the CA economy, nor have they bankrupted households.

Of course, he is exploiting wide public acceptance of the "trickle-down" theory, which assumes that whatever business does affects the broader public. If something's good for business, it's good for the masses. If something's bad for business, it's bad for the masses.

If CTA does go ahead and put these initiatives on the ballot, they're going to need to have some way to counter that framing. That should not prevent them from putting these on the ballot - it's long past time we closed that loophole and saved our schools.

Robert Cruickshank is a historian, activist, and teacher living in Monterey. He is a contributing editor at Calitics.com and works for the Courage Campaign, in addition to teaching political science at Monterey Peninsula College. Currently he is completing his Ph.D. dissertation in US history, on progressive politics in San Francisco in the 1960s and 1970s. This article originally appeared in Calitics.

Everybody in this state needs to read this article:


Here are some excerpts:

For 18 years, the state has spent more than it has taken in. A lot more. Over that stretch, total spending grew 5.9% a year on average, to $144.5 billion. A general rule of thumb says states should increase spending no faster than the rate of growth in population plus inflation. Over the same period, California's population plus inflation grew just 4.4% a year, 25% slower than the actual budget.

California is losing employers and entrepreneurs by the thousands. They are fed up with soaring taxes and an aggressively hostile business environment.
Hardly a week goes by that the state doesn't announce some new initiative, tax or regulation intended to make it harder on business to build or expand.

The results have been tragic. From January 2001 to this September, California's manufacturers — which, by the way, pay an average wage of about $60,000 a year — have slashed employment from 1.88 million to 1.295 million, destroying roughly 31% of the state's industrial base in a mere nine years.

California is besieged with such petty micromanaging that it's almost impossible to build factories or businesses there. The Tax Foundation ranks California 48th among the 50 states for its business tax environment.

,I>But a costly labyrinth of regulations makes it even worse. A new study from California State University at Sacramento estimates regulations cost the state $492 billion per year — a toll that translates into 3.8 million fewer jobs, $211 billion less in worker pay and an annual tax on each small business equal to $57, 260.

Proposition 13 is not the problem. Proposition 13 has never been the problem. Nor is chasing more industry out of California the solution.

Any "solution" that doesn't address the demonstrable FACT that industry is leaving California is no solution at all.

It will only leave the CTA and the other 'progressive' forces in California fighting over a diminishing revenue base - much as is happening this year.

People need to deal with reality - we need to promote business if we are going to avoid becoming the one-state equivalent of a third-world nation. And no, the feds aren't going to bail us out. They have a $12 Trillion debt of their own. They will be DECREASING funding for the states, not increasing it.