Split roll: the straw that breaks the camel’s back

Guest Editorial

Split roll: the straw that  breaks the camel’s backFor many, owning a home is part of the American Dream. In California, we face numerous challenges when it comes to building affordable housing in our communities. But one of the few protections we have as Californians is Proposition 13, which ensures that property taxes do not go up every year. By keeping property taxes low, Prop. 13 has made many of those dreams for middle and working families a reality.

Unfortunately one of the biggest political battles we will have to fight this year will be stopping the dismantling of Prop. 13 by liberal groups who want to raise the taxes we owe on our property.

Prop. 13 helps all Californians, but it’s vital to homeowners and mom-and-pop shops. By capping their property tax rates and limiting increases in a property’s assessment, Prop. 13 is the one thing keeping homeownership and commercial property ownership affordable.

Critics of Prop. 13 want to eliminate the cap on assessment increases for businesses, allowing their taxes to skyrocket as real estate values go up. This so-called “split-roll” tax would be devastating for local small businesses whose bottom lines depend on stable, reasonable tax rates. This is particularly important in California, because our taxpayers already pay the highest personal income tax, sales tax and gas tax in the nation. Furthermore, our electricity rates are almost twice as a high as the national average and housing costs are the least affordable in the country.

Tax dollars from a split-roll system would be yanked out of the hands of hardworking men and women who own local businesses like hair salons, dry cleaners and restaurants. But anyone with common sense can see that the ramifications of this proposal do not end there. By making it tougher to buy, own or rent commercial property, a split-roll tax would impact everyone.

The tax increase would force local businesses to do something they hate: raise prices. Business owners would have to pass on their increased costs to consumers, hurting working families and people who are struggling to make ends meet. To cope with higher expenses, some business might be forced to lay off workers, or shut down all together. This is basic Economics 101.

With burdensome regulations and a complicated tax system, a split-roll property tax would force people thinking about starting or expanding a business to do it somewhere else?—?outside of California. In recent years, we’ve seen an exodus of working- and middle-class families who can’t keep up with our high cost of living and doing business. A split-roll tax would only make matters much, much worse.

Sacramento Democrats’ efforts to raise taxes will only worsen the affordability crisis that burdens Californians every day. And even worse, we have seen time and time again diversions of tax dollars for unintended uses. One recent example is Prop. 56 (2016), which raised the tobacco tax with the promise that the funds would go toward Medi-Cal rates to increase access to health care for lower income families. Hundreds of millions of Prop 56 dollars never went to Medi-Cal last year.

When small businesses have to raise their prices or shut down altogether, we all lose. Keeping Prop. 13 intact is key to making property ownership and entrepreneurship affordable in the Golden State. Do not let Sacramento gut key protections for property owners. It hurts hardworking Californians trying to achieve the American Dream.

Assemblyman Vince Fong, California 34th District

Story First Published: 2019-01-18