Governor Jerry Brown told an audience in San Francisco
yesterday that if he doesn’t get his tax plan on the ballot he expects labor
groups will file an initiative to change Prop 13 to raise property taxes on
business. Brown is trying to scare the business community into pressuring
Republicans to support his tax plan. But, many in the business community are
tired of the so-called "split roll" threat. They are preparing for battle.
In a business environment with the value of commercial
properties down about forty-percent and unemployment hovering around the
12-percent mark, an increased property tax is about the worst formula one can
imagine. Not only would business owners probably cut jobs to pay the tax, or
not hire the next employee to pay the new obligation, but small and minority
owned businesses, the very engine to drive the economy forward, would be hurt
and stalled because of the property tax increase.
Ironically, Brown made the statement at a meeting of 250
apartment owners and developers. The question authors of a split roll
initiative have to face is do they include apartments on the commercial side of
the roll or are apartments residential? Excluding apartments from the tax
increase cuts dramatically the revenue proponents of the split roll hope to
take in. Including apartments means a rent hike for renters.
With commercial property values down, a business property
tax would not bring in expected revenue and would be a blow to the economy. On
top of that, the property tax revenue would not flow immediately and affect the
current budget crisis.
There is no question that public unions are toying with a
split roll plan. Over the years, a number of split roll initiatives have been
filed backed by public unions either to fail to qualify for the ballot, be
defeated at the polls, or the proponents withheld filing the gathered
signatures for one reason or another. It would be a mistake to try again.
Chalk up the governor’s remarks to another move in tax
gamesmanship that has been playing out since January.