Open Letter to Gov. Newsom: We answered your call to shut down. Now it’s your turn to Oppose Prop 15

Jennifer Pesqueira
Jennifer Pesqueira is the third-generation owner of El Indio Mexican Restaurant and Catering, a family-owned business in San Diego that has been in business since 1940. She is a member of the National Federation of Independent Business, California and the California Restaurant Association.

Dear Governor Newsom, 

Small businesses across California are hurting like never before. My family-owned small business, El Indio Mexican Restaurant and Catering, has never experienced a recession like this in our 80 years of serving the San Diego community. And there are millions of small businesses like nail salons, day care centers, dry cleaners, and gyms who are suffering just like us. 

As if we didn’t have enough to worry about, the threat of Proposition 15 and an $11.5-billion tax increase is headed our way this November. Unless rejected by voters, Prop 15 will hit small businesses with soaring rents and higher commercial property taxes when many are teetering on the verge of bankruptcy. 

We are counting on you, governor, to take a stand with small businesses and oppose Proposition 15. 

Since the COVID-19 crisis began, small business owners have endured many sleepless nights across the state, wondering if we will ever bounce back. We listened and answered your orders to close or substantially curtail our businesses multiple times. 

Now, all we ask is that you join the more than 100 local chambers of commerce and small business associations who are opposing Proposition 15. 

Your opposition is vital for the workers who rely on us for jobs. Small businesses employ nearly half of California’s workers, so the fate of restaurants and other small businesses like mine has vast implications for the entire state.  

The prospect of a huge tax increase will not only cause more small businesses to go bankrupt and more layoffs, but it will also drag down the long-term economic recovery.  

As a long-time member of the National Federation of Independent Business (NFIB) and the California Restaurant Association, I know first-hand what a severe threat Prop 15 is to small businesses trying to get back on our feet. 

Contrary to claims by the proponents behind Prop 15, small businesses are not excluded from the $11.5 billion-a-year property tax hike. The size of the business – large or small – is irrelevant. 

In fact, one of the requirements to be considered a “small business” according to the measure is owning real property. A study by NFIB found that fewer than a quarter of small businesses own their property. 

The majority of small businesses rent their space using a “triple net lease,” which makes them responsible for paying property taxes.  Unless we defeat this enormous property tax hike in November, small businesses will almost certainly pay it…and so will consumers. 

It’s time to set the record straight for voters. Almost all businesses – no matter the size, value of the property, or number of employees – will pay higher commercial property taxes either directly to the government or indirectly through higher rents and costs. Mom and pop small businesses will face higher costs at the worst moment possible when many are already behind on their rent. 

Small businesses have tight profit margins! What meager cash reserves we had in the bank heading into this crisis are gone. Even if we manage to reopen, it will take years, maybe even decades, to recover what the pandemic wiped out in a few months. How will we afford to pay even more when we are trying to get back on our feet? 

If unemployment is terrible now, consider what the largest property tax hike in California history will do to small businesses. A mass wave of bankruptcies will push California even closer to Depression-era unemployment rates. 

Since the COVID-19 crisis began, I’ve worried about whether our restaurant can continue to provide jobs for our employees in the future and whether we will survive to pass the restaurant on to the next generation.

Governor Newsom, please give small businesses a chance to get back on our feet. If you want small family restaurants like mine to have a future, we need you to show leadership and oppose Proposition 15.

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