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Commentary: Prop 15 is an unaffordable tax increase on small businesses, farms

By Ernie Dronenburg, San Diego County Assessor

Prop 15 is a property tax increase on the ballot this November. It is being sold as more money for the government and schools. That is true. Unfortunately, Prop 15 hides that it is the largest property tax increase in California history that will crush our neighborhood small businesses and farms.

As your elected Assessor, responsible for administering this tax increase, I have read the fine print of Prop 15 and want to share what it really does. The proponents promise billions for government and schools, it will close a “corporate tax loophole,” and only make millionaires, billionaires and big corporations pay with no tax increases on small businesses.

Here are the facts:

First, Prop 15 is a tax increase.
I found Prop 15 will be an unaffordable tidal wave of tax increases that will wipe out small businesses already drowning from the COVID-19 pandemic shutdown.

Second, it does not protect small businesses.
To qualify as a small business under Prop 15, you are required to own property in California. The California Business Roundtable found that 78% of small businesses are renters. If you rent and don’t own property in California, then you are not classified as a small business and not protected from Prop 15’s huge tax increases.

That’s why the NAACP opposes Prop 15. The NAACP in their Berkley Research study found that minority and women-owned businesses will be disproportionately hurt by the $12 billion tax increase. Even worse, Prop 15 will lead to the loss of an estimated 120,000 private-sector jobs.

Third, small businesses will pay the Prop 15 property tax increase.
I found the proponents need small businesses and farms to pay this huge tax increase in order to generate the $12 billion in revenue they want. They could have written the Prop 15 to only be limited to millionaires, billionaires and big corporations, but did not.

They talk about Exxon and Amazon paying the bill, in reality, I found it to be many of our favorite neighborhood small businesses like Pizza Port, The Original Pancake House, Swami’s Café, and Fred’s Mexican Cafe that will be picking up the tab.

I found due to Prop 15, there will be small businesses facing annual rent and property tax increases of $20,000, $30,000 and even $50,000 on a single small business. For example, DiMille’s Italian Restaurant on Adams Avenue will pay an estimated $43,651 property tax increase annually. These are not the billionaires and big corporations, but the face of the small businesses that may close their doors if Prop 15 passes.

Fourth, Prop 15 does not protect our farmers.
The initiative only excludes agricultural land. Their claim of protecting farms is false advertising because it will increase property taxes on barns, dairies, fruit trees, and wineries. Prop 15 will hurt farmers with increased property taxes and leaving consumers to pay more for milk, eggs and wine.

The truth is, Prop 15 is a tax increase that does not protect our small businesses, it hurts our farmers, it hurts minority- and women-owned businesses. I even found it to make our housing and homeless solutions more unaffordable.

As your property tax expert, I say vote no on Prop 15. Let’s protect our neighborhood businesses and farms. These neighborhood mom and pop shops are the fabric of our community. Small businesses can’t afford to pick up the tab for the badly written Prop 15. This is the wrong idea at the wrong time.