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California's Silence of the Scams

Craig Williams: The best cure for California’s budget problems might be a big statewide tax reform campaign based on the commercial property tax legislation proposed by the progressive organization Cal Tax Reform (CTR) and sponsored by Assembly member Tom Aminao.

The best cure for California’s budget problems might be a big statewide tax reform campaign based on the commercial property tax legislation proposed by the progressive organization Cal Tax Reform (CTR) and sponsored by Assembly member Tom Aminao. Unfortunately, the broadcast media and many legislators are part of an almost eerie “California silence of the scams.”

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The organization and its director, Lenny Goldberg, have advocated legislation which would close the loopholes in how commercial property taxes are assessed in the state. Basically, it's a racket in which using tax consultants and new commercial property owners can retain Prop 13 tax rates, which are reserved in theory for properties that haven’t changed owners (see Goldberg’s study at their web site on Commercial property taxes). There are lots of ways corporations can get a big tax break while any new homeowner must pay full market value taxes. Consequently, cities and school districts have become politically anorexic for several decades now.

The legislation as a grassroots campaign has a great deal of potential and could solve a big part of our budget problems. CTR believes we lose from $8 to $10 billion a year. The campaign could identify properties town by town that will give people a very local, concrete sense of the issue. There is a thousands of possible stories out there, in every city and town . Stories like a mall in Menlo Park, the venture capital center of Silicon Valley, owned by people on Cape Cod where their tenant is the bustling retailer Trader Joe’s and their property is assessed at $700,000. No home in Menlo Park probably has sold for less than $700,000 since before the Dot Com boom! Yet their schools are crying poverty. Or the major brand gas stations that pays a fraction of what the independent pays in taxes.

In San Leandro, where I live, a Chevron station -- the busiest in town -- is assessed at $160,000 while an independent station a few blocks away is assessed at $2,000,000. Both businesses sell basically the same product and the Chevron actually charges a little more. Another major offender is CVS, the drug store chain that bought Longs Drugs with hundreds of stores throughout the state but kept Longs’ incredibly low tax rate by setting up a phony company title in California called Longs Ltd.

There are stories like this everywhere in California and I believe this could be a great campaign for progressive Californians. I would think it would be possible to significantly raise the issues's viability and put a lot of heat on these companies using these loopholes. Any town could put pickets at a business within walking distance of city hall, the school board, the assembly person or state senators office or the county board of supervisors. They could go from the picket line to a city council meeting or school board or supervisors meeting. Goldberg's study also documents how county by county there has been a significant shift from the share of taxes that businesses pay onto what residents pay. It's possible to even organize local boycotts, which would get more viability for the issue and get even more people aware of the problem.

The potential coalition could include

  • students, teachers and their unions
  • parents and parent organizations -- especially young parents who are often recent home buyers
  • agencies and nonprofits, which depend on the state for funding
  • public employees, their unions and
  • anyone else who has a rage for justice.
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This issue hits a chord with people, especially if you do local research and can say to people “Do you know that store on Main and Second St, they’re paying $2,000 a year in taxes when they should be paying $20,000."

Cal Tax Reform pays for a service which gets them information about current property values and how much every business is paying in property taxes in the state. Every city and town in the state should use these services to know who are getting the big tax breaks on the backs of the city and schools.

California is the eighth largest economy in the world so we are generating a lot of money yet we aren’t able to collect a fair share of the revenue generated to run the state. Put two and two together and we end up with three because of the commercial tax loopholes. Corporate tax experts have left the eighth largest economy on the planet virtually in the poor house.

Assemblymember Amiano has said “the corporations are laughing at us.” He unfortunately is one of the only elected officials in either party who has not been silent on this issue. The California silence of the scams magnifies the problem of a candidate centered money driven political system where we end up at the bottom nationally in education and many other vital state related fields. Our Assembly and Senate districts are so big candidates need to raise hundreds of thousands of dollars and some of that money will need to come from commercial property owners.

The silence of the scams is an issue California unions should consider, especially with the organizing potential of an effective grassroots campaign . Richard Trumka recently spoke about his disappointment with how Democrats have failed to prioritize working families concerns and is considering organizing outside the parties. Years ago, the noted author Mike Davis referred to this problem as the unions “barren marriage” with the Democrats. This is a great campaign for unions to sink their teeth into given their current distaste for what the Democratic Party leadership is serving up. Town by town we could organize on this pressing issue and with a Democrat in the Governors Mansion, a progressive coalition could right the wrongs of our highly corrupt commercial property tax system.

craig williams

Jesse Jackson would tell the story about how a seven-foot giant who is standing in a hole measures himself from the ground up and thinks he’s only three feet tall. The state has gigantic revenue potential as well yet we think we’re broke, in a hole financially. We need to get out of the commercial tax loop hole as well and let the fiscal sun shine on our gigantic Golden State again. If we don’t have the political will to take on this monster, maybe Jonatan Demme could do another sequel to the Hannibal Lecter story. Hannibal would be in awe of how we silently roast our cities and schools.

Craig Williams