Did you know closing the corporate loopholes could generate $101.4 million for Fresno County, $21.1 million for Merced County, $34.1 million for Tulare County and $227.4 million for Riverside County?
The revenue could be utilized to invest in strengthening our schools and important local priorities such as Investing In Our Central Valley Youth. It could also be used to implement future goals in the Fresno Parks Master Plan to ensure we have more than 5 acres of green space for all those who call Fresno home.
We seek to make California’s tax code fair to all by phasing out loopholes in Prop. 13 that have allowed a handful of giant corporations and America’s wealthiest commercial property owners to dramatically lower their obligations to California families.
Our goals are simple: make commercial property taxes fair by re-assessing commercial and industrial property at fair market value so that we raise the revenue we need to fully fund our schools and community colleges, strengthen public safety and affordable housing, fix our roads, build transit, keep parks and libraries open and maintain other vital services.
Since the passage of Prop. 13 the tax burden has been shifting away from giant corporations and wealthy commercial property owners to middle class homeowners and renters. Our reform will reverse this trend and raise billions to help rebuild California. We will also:
1) Fully, 100% protect homeowners, renters and agricultural land.
Provide tax relief for small businesses.
2) Include tough transparency and accountability measures so that everyone can see how any additional funds are spent.
3) We are building a strong grassroots coalition to spread the word about the need for commercial property tax reform.
FREQUENTLY ASKED QUESTIONS
1. Why Make It Fair?
Make It Fair is a movement to close commercial property tax loopholes and use the revenue to rebuild critical services in local communities.
Proposition 13 was passed to provide important protections for homeowners and renters, but it also included property tax loopholes for many corporations and wealthy commercial property owners. These loopholes allow them to avoid paying billions of dollars in property taxes. That means that we lose vital funding for schools, local services like police and fire, parks and other important priorities.
Making It Fair means closing the commercial property loopholes in Proposition 13 while preserving all of the vital protections for homeowners and renters.
2. What is Make It Fair?
Make It Fair is a coalition of community, faith-based, civil rights and labor groups all working together to find solutions to the problems in our state caused by the lack of funding for public education and other services we all use, while also leveling the playing field for small and large, old and new businesses in California.
3. Do the proposed reforms impact residential property taxes?
Absolutely not. This will not impact homeowners or renters at all—except to make the services we use and the communities we live in stronger.
4. What is Proposition 13?
Proposition 13 was a constitutional amendment passed in 1978 that made significant changes to how and when property is taxed. It changed the law so that properties would only be re-assessed if they were sold or underwent major improvements. It capped the annual increase in value for non-re-assessed properties at 2%. And it set a 1% taxation rate on the assessed value of a property—which is one of the lowest rates in the nation.
As a coalition, we support the protection for all residential property owners, homeowners, renters and owners of agricultural lands—but we do not support the protection of big corporations and wealthy commercial property owners who have taken advantage of loopholes in the law to avoid paying their fair share of property taxes.
5. Why does Proposition 13 need to be updated?
Many big corporations and wealthy commercial property owners have used the law to avoid paying taxes on the actual value of their property. In some cases, businesses have gotten an unfair competitive advantage based solely on when they bought a piece of property. In other cases, they’ve used legal loopholes in the law to avoid reassessment when their property changed hands.
6. How do corporations and wealthy commercial property owners keep their taxes unfairly low?
First, because the taxable value of a property is set at the time of purchase and artificially limited to a 2% increase in value each year, a big corporation could be paying just slightly more in property taxes today than they did in 1978—even if their property has become far more valuable.
Worse, some companies actively work to get around re-assessment even when a piece of property changes hands. Under legislation associated with Prop. 13, if over 50% of ownership is transferred to one new owner, the property is then re-assessed. Some corporations and wealthy commercial property owners will break up the ownership of a piece of property across several sub-corporations so that no one sub-corporation owns more than 50%. So even though the property has been bought and sold, the new owners are paying taxes under the old assessment value.
This is fundamentally unfair—it allows many big corporations and wealthy commercial property owners to pay less than they should, leaving Californians with less funding for important community priorities, like schools and local services, that benefit everyone.
It’s important to note as well that businesses benefit when we invest in making improvements in our cities and towns. They see more consumers, are able to attract employees and are able to sell their property at a higher value. All businesses should fairly contribute to the improvements that allow this all to happen.
7. How much money would be raised?
We estimate that reforming the commercial property tax system would raise up to $9 billion of additional revenue each year that could be invested in schools, housing, community colleges, roads, public safety, health care, parks, small business relief and more.
8. What would the money be used for?
Currently, property taxes go to school districts, cities, counties and special districts that use the funding for K-12 education; local services like parks, libraries, police and fire; roads and other infrastructure, and community colleges. We propose to use increased revenue for the same things our property taxes go to now: increased funding for schools and local services.
9. How can we be sure it will go to benefit our community?
Important transparency and accountability measures are included to help local residents track exactly how the funding is being spent.
10. Do local communities across California actually need more revenue?
Unfortunately, we are only now just beginning to rebuild services that were devastated by years of budget cuts. Many families have seen the costs of higher education go through the roof; local schools still lack adequate funding for classrooms needs and extracurricular activities and services ranging from public safety to park maintenance have taken a beating. California currently ranks 49th in the nation of the number of students per teacher, according to the National Education Association.
We believe we can help restore public services by fairly taxing commercial properties and help invest in the well-being of our communities across the state. The problem isn’t that regular Californians are getting too much—it’s that many big corporations and wealthy commercial property owners use loopholes that reduce revenue for services we all rely on.