I grew up in a small house on a windy street at the base of Bernal Heights in San Francisco in the 1970s. By the time I entered Kindergarten, I became—unbeknownst to me at the time—part of the first generation of California kids impacted by devastating budget cuts to pay for corporate tax breaks put in motion by Proposition 13.
Passed in the summer of 1978, Proposition 13 resulted in corporations being able to avoid paying their fair share due to tax loopholes, plunging our state school funding from one of the highest in the nation to one of the worst. Prop 13 would also go on to spark nationwide tax revolts, with many historians placing blame at its feet for the lost tax revenue across the country that has led to the extreme inequality we see today. Now, my daughters—along with all the state’s kids—could be among the first generation of California children to benefit from a reform of that broken policy, bringing billions of lost revenue back into our local communities.
Proposition 15, known as Schools and Communities First, represents the first serious attempt to close these corporate tax loopholes. The potential benefits are enormous—as is the potential impact on some deep-pocketed corporations. That’s why we’re seeing those with a financial stake in preventing reform pouring millions toward misinformation campaigns to confuse voters.
Before unearthing some of that misinformation, let’s back up. Pushed by anti-tax crusader Howard Jarvis—a Republican with a failed California Senate bid and several Los Angeles mayoral runs under his belt—Proposition 13 capped property taxes in the state by fixing property value assessments at their 1976 value, with no increase beyond 2% per year. Properties could only be reassessed at a new base year value when ownership changed or with new construction. Prop 13 covered all properties—commercial, residential, agricultural—all of it. It covered big businesses—think Disney and Chevron—and small.
Analysts estimate that the corporate tax loopholes in Proposition 13 have cost the state more than $500 billion in lost revenue since the ballot measure passed. It’s a staggering number. Today, our schools rank last, or nearly last, in class size and school staff per student in the country. But despite these devastating impacts, taking on Prop 13 was long considered a third rail in state politics because of the powerful vested interests in maintaining the status quo.
Through years of organizing, a movement has grown to finally take on these corporate tax loopholes. Proposition 15 will reform this tax avoidance scheme for big business, focused on changing the policy for commercial and industrial properties. If passed, Proposition 15 could generate up to $12 billion a year, with 40 percent of this new revenue going to K-12 schools and community colleges and 60 percent to local communities to fund essential workers, workforce development, infrastructure, and much more.
Homeowners and renters, small businesses, and family farms and all agricultural properties are protected—completely exempt from this policy change. Instead, the ballot measure focuses on commercial and industrial properties and the large corporations that own them, including those that have figured out how to structure ownership changes over the years to avoid paying their fair share in taxes.
Under Proposition 15, 92 percent of the new taxes will come from just 10 percent of the state’s commercial properties, a recent analysis found. Most of this new tax revenue will come from large corporations in places like San Francisco and Silicon Valley, while the revenue generated will benefit the entire state, particularly critical now as so many communities have been devastated by the twin crises of Covid-19 and wildfires.
Opponents of Proposition 15 have spent millions on misinformation, alleging, for instance, that family farmers will be devastated by it. Ah-hem, that’s just not true; agricultural properties are exempted. They have also pushed ads scaring elderly homeowners that their property taxes will spike. Again, simply not true. All residential property is exempted in the ballot measure. They’ve also said this will devastate small businesses. Alas, also a myth: Businesses that own commercial property worth $3 million or less are exempt—as are small businesses operated out of homes. In fact, by forcing some of the state’s wealthiest corporations to pay appropriate taxes, the proposition helps level the playing field.
While real estate investors, Wall Street firms, oil and gas companies, and out-of-state corporations line up against it, Proposition 15 has diverse and widespread support. Leaders like Governor Gavin Newsom and Senator Kamala Harris have endorsed it as have the League of Women Voters, California Parent Teacher Association, numerous civil rights leaders, and food and agriculture groups like Community Alliance with Family Farmers.
Watching my third and sixth-graders navigate distance learning this fall, I’ve been moved to tears countless times as I get a window into the dedication and talent of Berkeley Unified School District teachers. If we didn’t see it clearly before Covid-19, we really see it now: the vital role our teachers and schools play in our communities. I hope you’ll join me in voting Yes on Proposition 15 and talking with friends and families across the state about it. In doing so, you’ll be part of a state-wide movement to ensure that this generation of kids is the first—of what will be countless more—to live in a California where the richest corporations pay their fair share so that all of us can have our community needs met and well-funded schools.