Guest commentary: How Prop. 15 could undo hard-earned progress for countless businesses

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San Diego’s residents have made significant progress through our collective efforts to safely reopen our economy while limiting COVID-19’s spread. However, those successes could be short-lived due to something entirely preventable: Proposition 15.

As a former San Diego mayor, I have seen hard times come and go, but today’s environment is different. At every turn, families and small businesses face unprecedented obstacles. Which is why it’s puzzling that Sacramento special interests would push ahead with Proposition 15, the largest property tax hike in California history, for the November ballot.

Proposition 15 is an $11.5 billion property tax increase that will appear before California voters during one of the most uncertain economic climates in memory. Even as hope exists for brighter days as San Diego County successfully advances through California’s blueprint for reopening, Proposition 15 could undo that hard-earned progress for countless businesses.

Proposition 15 will raise taxes on commercial, industrial and agricultural property by requiring reassessment at current market value at least every three years. Unless defeated, it will repeal Proposition 13’s long-standing protections for business properties and farming structures that have kept property taxes stable and predictable for more than 40 years. The impact will be devastating for small businesses, which is why the San Diego Regional Chamber of Commerce has joined local chambers across California in opposing Proposition 15.

We all know a local restaurant or shop that has already gone out of business during the past few months. For those surviving small businesses, their financial picture will undoubtedly face challenges. Most small businesses rent their space and have leases that make them responsible for costs, including property taxes. Most restaurateurs, for example, own the restaurant but don’t own the building where it’s located. When property taxes rise, they and other businesses, like day-care centers or barber shops, end up paying more in rent. A massive tax hike may be the final straw that determines whether a business remains open or closes permanently.

I work with small-business owners every day in my role as president and CEO of the chamber. They are hurting as they navigate from one challenge to another. Many face tenuous futures. The sad reality is, Proposition 15 may be the final straw that leads many to shut their doors forever — taking with them their dreams of success.

We know small businesses are the pillars of any community and one of the most important job creators. Nearly half of Californians were employed by a small business before the pandemic. Without small businesses leading a comeback, our economic recovery will be longer and slower. Proposition 15 stands in the way of San Diego’s economy making a robust comeback.

Proposition 15’s ability to cripple San Diego’s entire economy makes it the most important state proposition on the ballot this year to defeat. We worked hard to reopen safely after COVID-19 and give our businesses a chance at a future.

Unless defeated by voters, Proposition 15 will destroy what little confidence small businesses have left in their ability to recover post-pandemic and get people back to work.

Let’s not derail our path toward recovery by making an entirely avoidable mistake. The COVID-19 recession is not the time for the largest property tax increase in state history. I’m voting no on Proposition 15. I hope you’ll join me.

Jerry Sanders is president and chief executive of the San Diego Regional Chamber of Commerce. This commentary was originally published by The San Diego Union-Tribune.

For the other side, read here:

California’s schools are funded in large part by property taxes, but wealthy multinational corporations have been skipping out on paying their fair share. Proposition 15 is an opportunity to close a corporate tax loophole that has deprived schools and communities in San Diego and across California of much-needed investment.

Oct. 22, 2020