Last year, The Almanac ran a three-part series by Kate Bradshaw, describing the lasting impacts of racial segregation in our community. The COVID pandemic has further revealed the stark racial disparities in health outcomes, economic resilience as well as the racial digital divide. George Floyd and Breonna Taylor's murders have made clear that we have work to do, if we hope to live up to our lawn signs' assertion that Black Lives Matter.
That's why I support Proposition 15.
Proposition 15 — 10 years in the making and supported by a broad coalition of community groups, elected officials, and other leaders, including the governor himself — offers a structural correction to racial and class injustice through tax policy that has plagued California since 1978.
Tax policy is not the subject of most protest signs, but it should be! When a tiny number of commercial property owners don't pay their fair share, the rest of us do, and the burden falls most heavily on those who have the least. By closing a loophole in how California taxes commercial properties, Prop 15 will reclaim $12 billion dollars a year to fund public schools, local government, and the social safety net.
The loophole comes about because California property taxes are based on the purchase price of a property, no matter how long ago it was bought. They only reset to a market value assessment when the property changes ownership or is upgraded, and corporate-owned properties don't change majority ownership very often.
The loophole reduces revenue for public schools, local government, and the social safety net, and also creates an unfair local business environment.
Let's look at some Menlo Park examples. On Santa Cruz Avenue, we have two rug stores of similar size, within two blocks of each other. One pays about $36,000 in property tax and the other pays less than $6,000 per year. We have two popular grocery stores — Draeger's and Trader Joe's. Trader Joe's pays just $36,000 a year in property taxes, while nearby Draeger's pays two and a half times that, almost $92,000 a year because they invested in a significant remodel a few years ago.
In addition, since houses change ownership much more often than commercial properties, homeowners pay an increasingly large share of property taxes over time. The average new homeowner in Menlo Park pays $24,000 a year in property taxes, while a single commercial property downtown, which houses a large Walgreens, a busy Starbucks, an Una Mas and a hair salon, pays only $17,000.
Prop 15 rebalances the equation. It does so by requiring commercial properties worth more than $3 million to pay property taxes based on current market values. Importantly, it leaves residential property tax rules untouched.
Prop 15 will bring an estimated $12 billion per year to the state's schools and communities and help to advance equity for our students with the greatest needs. Statewide, 40% of reclaimed revenue will go to schools, with more funding allocated for schools with low-income, foster care involved and English language learner students, and at least $100 more per student per year in all districts.
As for communities, according to a University of Southern California Dornsife report, Prop 15 will reclaim $770 million for San Mateo County. Our local governments will allocate that revenue on the things we, together, prioritize. We could build affordable housing and do more to address homelessness and climate change. This would help us address the historic and present-day impacts of racial segregation and inequity, something many of us are eager to do in these times.
Prop. 15, the Schools & Communities First initiative, is a once in a lifetime opportunity for Californians to deliver on the promises of fairness and equity. Join me and Menlo Together in supporting yes on Prop 15.
Karen Grove is a Menlo Park resident and member of Menlo Together, a group of Menlo Park and Peninsula residents focused on issues of housing, transportation, sustainability and equity in Menlo Park.