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.
This article was also published in the Orange County Business Journal