Originally published in the Los Angeles Business Journal

Los Angeles Mayor Antonio Villaraigosa may not have known it, but when he went to Sacramento last month with calls to amend Proposition 13’s protections on California businesses, he was calling for almost 400,000 Californians to lose their jobs.

A new study released by Pepperdine University professors Steven Frates and Michael Shires calculates that dismantling Proposition 13’s landmark protections for business properties would cost California about $72 billion of lost economic output and about 400,000 jobs in the first five years. Pushed by those advocating more government revenues, a “split roll” proposal would remove the cap on property taxes for businesses but not homeowners, and would “further undermine the attractiveness of the business climate in California,” the authors wrote.

Villaraigosa missed the mark when he said Proposition 13 is “benefiting commercial property owners at the expense of homeowners.” As recent polls indicate, homeowners think the Proposition 13 protections are working just fine for them. As for business, Proposition 13 property tax protection is one of the few bright spots business enjoys in a state of high taxes and massive government regulation.

Perhaps, most importantly, a split roll would do most of its damage to small businesses.

Far from a “tax the corporations” proposal, advocates of a split roll who envision removing Proposition 13 protections for commercial property put small businesses in the tax collector’s cross-hairs, especially businesses owned by women and minorities, according to the Pepperdine study.

Frates and Shires wrote, “Larger firms generally will have more capital and resources to absorb the impact of the increased tax payments they would encounter under the split roll. Small firms, however, have less capital and are less capable of absorbing the impacts of the tax increases anticipated under the split roll. Thus they are more vulnerable to failure as a result of the tax increase associated with the split roll.”

Consider that a majority of small businesses lease their property and those leases often require the leasing businesses to pick up any property tax increases. Forcing businesses to pay higher property taxes leaves them with less money to hire employees.

Our state is suffering heavy unemployment and a sluggish economy. Now is not the time to remove one of the only incentives businesses have to operate in California. What politicians like Villaraigosa need to do is to make government more efficient, not wreak havoc on the economy in a desperate attempt to grab more of our tax dollars.