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California State Government June 6, 2006 Election
Smart Voter

Proposition 13 was for Homeowners, Not Corporations

By Michael S. Strimling

Candidate for Governor; Democratic Party

This information is provided by the candidate
Hit the blue links to read position papers or go to California has a continual lack of money because corporate taxes are falling - this must be reversed or the State and education will continue to spiral downward
The passage of Proposition 13 locked property tax at 1975 values (except for 2% per year). It only allows property taxes to be raised to market value when property is sold. Even when Proposition 13 passed, most of its benefits went to business, not homeowners. That has gotten much worse. Corporations can live forever and not sell their property. Ownership of the corporation and its property can be shifted just by selling its stock. Real people like you and me move because they get divorced, get transferred, move to a larger or smaller home, and most of us pay taxes at the price of our new home. The result is that huge corporations like Chevron and Disney pay nearly the same taxes on their property that they paid when Prop 13 passed 30 years ago, although their property is worth 30 or 100 times as much. Land that could become housing or new business is locked in their corporate hands and taxed so low that it is not put to its best use. Moreover, companies like Chevron are not owned by Californians. Its largest stockholders are Saudis and Rockefellers. Yet, California is giving them a huge tax break by charging less in property taxes for their property and refineries than homeowners pay. The Hearst Corporation owns 100 miles of prime coastline and still pays dirt-cheap taxes. New businesses cannot compete with old businesses that have cheaper tax rates, so new jobs are not created. Disneyland pays 5 cents tax per foot whereas a new business pays $5.00 per foot, and Disney's stockholders are also mostly in other states. Neither Disneyland nor Chevron's refinery are going to move if they are taxed fairly - they can afford fair taxes. Each has profits of billions of dollars. The effect is that the poor and middle class pays. Sales and income taxes have gone up to make up for some of the loss. Those taxes hit the poor and those who work. Homeowners' share of property taxes has gone up 25% and the tax share of business has fallen that much. Moreover, the amounts business would pay have not been replaced, causing California's schools to fall from one of the highest to one of the lowest in student funding.

Another thing that has happened is that cities have tried to attract "big-box" stores such as Walmart, OfficeMax and Costco because their sales tax revenues are needed to replace property taxes. A return to fair and equal corporate property taxes will end this distortion and long term push a trend back towards manufacturing and skilled labor jobs, instead of low wage store clerks. Also, income and sales tax receipts go up and down more with the economy than property taxes. Property taxes would be a more stable funding source, not a continual cycle of boom and bust for local and State budgets.

We need a Governor who will take up this issue and push Propositions to fix it. It is only fair that old corporations pay as much as new business and homeowners. Michael Strimling pledges that no budget from the Legislature will be signed until Propositions get on the ballot that give the people the choice to (1) have property owned and leased by corporations taxed at its true market value rather than artificially low values, and (2) allows properties worth more than $10 million to be reassessed at current value. NO OTHER CANDIDATE IS DISCUSSING THIS CENTRAL AND IMPORTANT ISSUE. If you want a debate on this issue, if you question the wisdom of any aspect of Proposition 13, we urge you to support and contribute to this campaign. Your vote will send a message on this issue.

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