Give Gov. Brown credit.
He is smart enough to recognize that imposing massive property tax hikes on California’s struggling job creators will hurt, not help, our state’s economy. And he’s willing to take heat from members of his own party for his stand.
On Aug. 16, Los Angeles Mayor Antonio Villaraigosa gave a speech to the Sacramento Press Club urging “progressives” to “start thinking and acting big again” in order to “invest… in our economy.” He challenged Gov. Brown to have “the courage” to “strengthen” Prop. 13, an important taxpayer- protection measure approved by voters in 1978.
Lest anyone be confused, let me translate: Mayor Villaraigosa has no intention of “strengthening” the property tax protections in Prop.13. Instead, he wants to strip away those protections for business owners, including Main Street mom-and-pop businesses like hair salons, hardware stores and restaurants.
In the Bad Old Days
According the Howard Jarvis Taxpayers Assn., an organization that exists to defend Prop. 13, prior to that measure there were no limits on property tax rates and assessments. Taxpayers’ properties could be reassessed 50 percent to 100 percent in a single year and see their bills jump accordingly. As a result many taxpayers lost their homes and businesses.
At a time when taxpayers are once again losing homes and businesses, it makes no sense to make the problem worse. The businesses we see when we drive down the street are survivors of the Great Recession, but that’s no guarantee they will be able to continue to keep their doors open and workers employed.
Yet Mr. Villaraigosa and others want to target these survivors. Apparently for “progressives” the definition of “progress” is to make California first in taxes and unemployment. According to the Tax Foundation, Californians bear the sixth highest overall tax burden in the nation. Our state’s income taxes, sales taxes and fuel taxes rank at or near the top. Even property taxes aren’t particularly low—California ranks 14th—but without Prop. 13, they would be much, much higher.
Backward Philosophy
Taking even more money from private taxpayers to “invest” in more government bureaucracy doesn’t grow our economy. It would shrink it. The taxpayer would have less money to spend, invest and hire workers. Our state would end up with even higher unemployment.
The vast majority of jobs and investment in our state come from the private sector, not from government. Even public sector jobs and investments only exist because the private sector pays for them
Like it or not, California is in a global competition for jobs. Many California businesses no longer can afford to expand. The cost of doing business in our state is already too high compared to other states.
As a result, many taxpayers are leaving our state for greater economic freedom elsewhere. According to a recent study, California is experiencing a net loss in new business startups, falling from first in the nation to a dismal rank of 50th last year.
If our state’s leaders want more revenue for public sector investments, they need to attract more private sector investment. There are no shortcuts. Only a healthy, vibrant economy that creates jobs for Californians will produce tax revenue in abundance.
A good place to start would be for Gov. Brown and the Legislature to launch a comprehensive review of the costly regulations burdening private sector businesses. Common-sense reforms could free up millions of public and private sector dollars. A similar effort at the federal level recently found savings of $14 billion.
Making government less costly, intrusive and burdensome for taxpayers is one way to start restoring public confidence.
California’s leaders must confront the truth, that taxpayers don’t trust government to “invest” their tax dollars in a wise manner. Years of government mismanagement and wasteful spending have caused the public to rightly doubt claims that additional taxes and government spending will solve the problems facing our state. Big thinking is good, but bad thinking is not. If we truly want progress, we need to start viewing private sector taxpayers as a partner, not a piggybank. If we truly care about Main Street, we’ll keep Prop. 13 whole.
Elected last November, Mr. Runner represents more than nine million Californians as a member of the State Board of Equalization. www.boe.ca.gov/Runner.
