Published on Fox & Hounds Daily (http://www.foxandhoundsdaily.com)
Upping commercial property taxes could stick it to small businesses
By John Kabateck
Created 08/27/2008 - 08:11

As I travel throughout California discussing small-business issues with business owners and operators, a familiar idiom continues to ring inside my head: You can’t squeeze blood from a turnip.

It must be because that’s just what it feels like some folks are trying to do to California small businesses and consumers.

As Proposition 13’s 30th anniversary came and went in June—and poll after poll showed that voters would still support the much-needed tax reform measure today—some tax “reform” advocates have continued to raise the specter of commercial property tax increases as a way to dig us out of California’s budget abyss. What more do they think they can wring out of us?

Proponents try to position commercial property tax increases as “sticking it” to big business. Not only is their assumption that California businesses do not already pay their fair share of taxes patently false, they also fail to acknowledge that increased property taxes will actually be “sticking it” the most to small businesses, consumers, seniors and renters.

Most small businesses rent their office, facility or restaurant space. If commercial property taxes increase, these costs will be passed on to small business tenants—most of whom have this cost-sharing provision written into their leases.

The result will be that family restaurants, local grocers, dry cleaners, auto shops and other small businesses already being squeezed by gas, food and utility costs will bear even more of a burden.

There are roughly 3.5 million small businesses operating in California that provide jobs to some 7 million men, women and young adults every year. Small businesses work hard to provide good wages and benefits for their employees, and as a result, many of these businesses continue to operate year after year on a pretty thin margin.

Higher property taxes, coupled with today’s economic challenges, will put most, if not all, California businesses and employees at risk.

It is never a good time to impose unfair and unnecessary mandates and cost burdens on small businesses and working Californians. But it’s especially poor timing when unemployment—now at 7.3% statewide and 5.7% in Orange County—is soaring on a monthly basis.

And it won’t stop there. To keep their doors open, many small business hit with higher rents will have to pass on these costs to consumers in the form of higher prices for products and services.

Families and seniors on fixed incomes will struggle even more to buy groceries, gas and other vital products.

And, let’s not forget that apartments and condominiums also are predominantly small businesses that will be subject to tax increases. These property owners also will have no choice but to pass on their increased costs in the form of higher rents for tenants, many of them on tight budgets as it is.

Increased property taxes in California would have far-reaching, devastating impacts on the state. That is why the National Federation of Independent Business has joined a coalition, Californians Against Higher Property Taxes, which will work to inform Californians about the negative impacts of increased property taxes in the hopes that property tax increase proponents will abandon these damaging proposals for good.

For more information, please visit www.stophigherpropertytaxes.com [1].

This article was also published in the Orange County Business Journal


Source URL: http://www.foxandhoundsdaily.com/blog/john-kabateck/upping-commercial-property-taxes-could-stick-it-small-businesses

Links:
[1] http://stophigherpropertytaxes.com