March Meeting Recap

Our new president Carla Hansen opened the meeting.  Several of our members had announcements:  ECDC is part of the New Priorities Project which has joined with the Global Day of Action to do tax day leafleting at Plaza and Del Norte Stations, and Al Miller was recruiting ECDC members to help.  On April 17, at El Cerrito Rialto Theater, there will be a free showing of award winning film Chasing Ice co-sponsored by the League of Women Voters and Supervisor John Gioia and the City of El Cerrito Environmental Quality Committee.

Ayore Riaunda, Democratic candidate for County Auditor-Controller introduced himself.  This is the only contested County office in 2014, and Mr. Riaunda is the Democrat running against the Republican incumbent.  He’s a certified government finance manager for the Contra Costa Health Department where he’s been working for 17 years.

Jim Sopor from Derek Cressman campaign and co-chair of Voting Rights Task Force of the Wellstone Democratic Renewal Club made a short presentation about Derek Cressman, candidate for Secretary of State.

Ben Grieff from Evolve made a compelling presentation about their campaign to reform Proposition 13.  Evolve is a nonprofit organization in San Francisco with 10,000+ members from around the San Francisco Bay area.

Evolve began as a way to advocate for progressive ideas, and organizes around specific issues to influence elected officials and individuals.  There are a lot of common sense solutions to California’s problems.  By organizing around specific issues and talking to people face to face, Evolve activists hope to make positive change.

Their first campaign was health care reform specifically supporting the single payer Senate Bill 10 introduced by Senator Mark Leno.  (The ECDC was an early endorser of this bill.)  It passed twice, but Governor Schwarzenegger vetoed it both times.

 They turned their attention to Proposition 30, along with many other progressive and labor organizations.  Prop 30 passed with a 10% margin – a strong indication that it should be time to talk about Prop 13 reform. We all know that Prop 30 has an expiration date; we need long term solution.

Ben Grieff noted that most people focus on the residential tax protection, and think Prop 13 keeps people in their homes.  However, it also protects large corporations.  Evolve wants to close loopholes for corporate property owners.

Even one of the original authors of Prop 13, Howard Jarvis, wanted to keep real estate taxes down for individuals; his intent was not to protect large corporations.

Evolve is proposing the elimination of property tax protections for large, non-residential property owners.  Their proposal won’t affect small business owners, home owners or apartment dwellers.  It will focus on the large corporations which currently pay an average of 5 cents per square foot in property tax per year.  In contrast, average homeowners pay 40 cents per square foot.

Before Prop 13 was passed, California’s property tax revenue was 60% residential and 40% commercial; now it’s 72% residential and 28% commercial.  Prop 13 has INCREASED property tax burden on homeowners by 12%.  Doctors Hospital parcel tax is 13 cents and will raise $10 million; in the meantime, Chevron is saving a BILLION dollars by not having property re-assessed.  Although it owns oilfields, offices, and huge refinery properties, Chevron’s taxable property values have not been re-assessed since 1975.

However, during the same 30 years, California residents have seen increases in personal tax and fees, sales tax, and parcel taxes to fund hospitals, roads, schools, parks.  All of these infrastructure and public facilities are being funded by individual small human taxpayers.  California does have a high tax burden, but the fallout form Prop 13 simply shifted the burden from big corporations to individuals.

The question is: why is Prop 13 a political third rail?

Homes change hands on an average of every 10 years and get re-assessed, but when corporate property is sold, the stock changes hands, but the property, still owned by the same corporation, is not re-assessed.

The reforms Evolve are proposing would exempt micro-businesses. Those are businesses that are owned by California residents with fewer than 25 employees with less than $2.5 million revenue, as well as residential property regardless of size.

Mr. Grieff pointed out that property taxes don’t affect prices.  For example, Disneyland has increased prices by 819% since 1980, even though its property taxes haven’t increased at all.  Consumers are sensitive to prices. Disneyland sets its admission price at the point that allows it to attract the public.   He pointed out how ridiculous it would be for Disneyland to pay the same property tax in 2075 that it paid in 1975.

Under Prop 13, when commercial property is sold, it is only re-assessed if one person buys more than 50% of the new property.  In 2006, Michael Dell bought a hotel in Santa Monica for $200 million, but put 50% of it in his wife’s name.  This was a way to avoid triggering a property tax re-assessment.  Similarly; Gallo Winery in 2001 bought hundreds of thousands of acres of Napa/Sonoma and split the property buy among multiple family members.

Evolve campaign is letting people know we have a choice in California.  They are reaching out to local elected bodies, school boards and city councils, and asking for resolution to reform prop 13 to split the roll.

Lots of local elected bodies from San Diego to Humboldt are considering reforming Prop 13 to re-balance the revenue streams for all of California.  Many neighboring legislative bodies have passed these resolutions including West Contra Costa Unified School District Board, and the Cities of Richmond and Albany.

Please be alert for this resolution to be introduced in the El Cerrito City Council Email the City Council and support its