By Josh Pechthalt, CFT President
California’s largest, oldest corporations have not been paying their fair share for more than 35 years. As a result, the state has lost billions of dollars in uncollected property tax revenues — a major factor pushing our public schools to the national bottom in per pupil spending and class size average. The state’s most at-risk families and individuals have also seen essential services repeatedly cut for more than a generation.
That’s why the CFT has joined with community-based organizations, like California Calls and ACCE, and unions like SEIU and CTA, to launch the Make it Fair campaign to address the unjust shifting of property tax obligation away from large commercial interests and on to homeowners.
On May 7, the Make it Fair coalition launched its campaign to put a ballot measure before California voters. The measure could generate up to $9 billion a year by compelling the largest companies to pay property taxes based on fair market value rather than paying on 1970s property values that were essentially frozen as a result of Proposition 13. Residential property owners and smaller businesses would continue to benefit from provisions of Prop. 13 and would be excluded from this proposed constitutional change.
To reverse years of cuts to public education, California voters adopted Proposition 30 in 2012. Prop. 30 helped stabilize the economy and restore funding to education by requiring the state’s top income earners to pay more in personal income tax. This year Prop. 30 will generate more than $8 billion in additional state revenue. As a result, funding for education has improved significantly.
However, California’s improved fiscal situation masks a deeper crisis of growing economic inequality and poverty that threatens the long-term economic and social fabric of the state. A 2014 Forbes magazine article, “Where Inequality is Worst in the United States,” highlighted the vast economic disparity in California. On one hand, we have more than 111 billionaires who own nearly $500 billion in assets, while on the other hand we have the highest poverty rate in the nation with one-third of the nation’s welfare recipients.
Progressive tax reforms, like the Make it Fair initiative and Prop. 30, help ensure the state’s economic stability even during periods of recession. Yet in the coming months, we are likely to hear calls from business interests and some politicians calling for regressive tax measures like a flat tax or various sales taxes. But in a state where poor and middle class families are falling further and further behind, these regressive tax proposals will only widen the gap.
The CFT continues to advocate for a Prop. 30-like extension that asks the state’s wealthiest individuals to pay a little more in personal income tax. But that alone is insufficient. That’s why the Make it Fair measure must be part of our overall effort to improve funding for education and tackle economic inequality.
The corporate and political forces committed to protecting the unequal status quo are powerful. But their wealth and influence can’t hide the fact that insufficient funding for education and social service hurts millions of Californians. As we have done in the past, we will build a grassroots coalition working to challenge the 1%.
In the coming months, labor and its community partners will train hundreds of speakers, work to pass resolutions, and educate our members and the public on Make it Fair. Like the Prop. 30 effort, your involvement will be key to our success.