Now is the Time to Help, Not Hurt Small Businesses in California

By Carl DeMaio

If Governor Gavin Newsom and California Democrats really wanted to help struggling small businesses and millions of unemployed California workers they would immediately suspend or repeal a variety of damaging and costly taxes, mandates and regulations that have been choking the California economy for years.   

At the top of the list of relief should be the repeal of AB 5.

Last year Governor Newsom and the Democrats passed AB 5 into law to ban the use of independent contractors in California and impose stiff penalties on small businesses for hiring independent contractors.  AB 5 is an outrageous attempt to deprive Californians of the freedom to work, destroy the once-booming “gig” economy, and boost government tax revenues by forcing independent contractors and their clients to pay higher employment taxes. 

Even before the Coronavirus, AB 5 had devastated hundreds of thousands of workers already – and now AB 5 is one of the biggest obstacles for unemployed Californians seeking what little work is available.

Gov. Newsom has the power to suspend AB 5 completely so small businesses and independent contractors can find work during these challenging times.  I want to commend Assemblyman Kevin Kiley for leading the fight to ask the Governor to do this, but Newsom has refused to do it.

What’s worse, Gov. Newsom is weaponizing the Coronavirus federal bailout program to enforce AB 5 and punish small businesses and independent contractors.

President Trump wisely included independent contractors in the unemployment insurance provisions of the federal Coronavirus bailout program since many have lost their clients during the shutdown.

Unfortunately, Gov. Newsom has instructed the state’s Unemployment Insurance Program to use the federal bailout funds to collect data and evidence from independent contractors when they seek the unemployment benefits to build enforcement cases against small businesses that used independent contractors after January 1, when AB 5 went into effect. 

I have heard from many independent contractors who fear if they apply for federal unemployment benefits, they will get their small business clients in trouble under AB 5. 

Punishing struggling small businesses and independent contractors is NOT what we need during this economic crisis. 

If California politicians are serious about helping ease the economic impact of Coronavirus they need to start by repealing or suspending AB 5.

Concerned taxpayers who agree that California politicians should suspend or repeal AB 5 can help send a message today by signing this petition:

Carl DeMaio is Chairman of Reform California.

Prop 13 is under attack: what ‘Split Roll’ actually means

Prop 13 is under attack: what ‘Split Roll’ actually means

Voter beware — the Sacramento politicians are at it again! Last election cycle, the politicians deceived voters at the ballot box and drastically raised our gas and car taxes. This time around, they want to raise the price of everything you purchase – all while decimating jobs across the state. This could be the final straw that breaks the camel’s back and destroys the middle class and the California Dream as we know it. The upside: we can stop it, if we stand together.

In 1978, Californians overwhelmingly passed the “People’s Initiative to Limit Property Taxation,” or as it’s more commonly known, Proposition 13. This limited property tax to one percent of the full cash value. More importantly, it also limited property tax increases to no more than two percent each year. In a high-tax state like California, this measure has been a major success for businesses AND residents. Prop 13 has provided much needed stability in terms of state revenue while also protecting citizens and their businesses from constant tax increases at the whim of out-of-control politicians.

Now, Prop 13 is under attack! Politicians have placed a ballot measure on the November 2020 ballot to massively raise commercial and industrial properties. Worse, the politicians have shamelessly disguised the measure as a way to give more money to schools – which already receive over $60 billion in the California state budget. That is almost one-third of the entire state budget.

This attack – called Split Roll – would take Prop 13 protections AWAY from commercial and industrial properties. While you may breathe a sigh of relief at the fact that the property tax rate on your home won’t change, it’s not safe: Sacramento will be all too eager to raise YOUR property taxes during the next election cycle if this passes.

If Split Roll passes – effectively raising commercial and property taxes – the impact will be felt by working families all over the state. The current booming economy and historically low unemployment rate will reverse almost overnight as employers will be forced to layoff employees or worse – close their doors permanently.

Let’s take a simple example of the devastating impact that Split Roll would have on a small business. Joe and Jane Smith bought a commercial space for their business in 1980. They do a moderate amount of business each year and have three employees. Their property taxes were originally $10,000 per year based on their purchase price of the space, and because of Prop. 13’s protections, their property taxes are now $17,880 per year in 2019.

Now, imagine the Split Roll measure passes in 2020: the Smiths’ commercial property taxes will now be evaluated at “fair market value.” The surrounding neighborhood has grown tremendously, and property values have increased significantly over the past few decades and are hit with a massive, new property tax bill of $65,000 per year.

Now their small business suddenly must choose between keeping the doors open or keeping several dedicated employees. While it may be a simple example, it is a very real scenario facing millions of Californians. And even if the Smiths’ business can withstand a $47,000 increase in taxes, they’ll likely have no choice but to raise their prices – ultimately hurting consumers!

How can we stop it? Don’t sign the petitions you’ve probably seen at your local grocery stores and shopping malls – they have the audacity to tell you that they are “saving Prop 13” when the end result is that it destroys Prop 13. They need to collect over one million signatures and will pull all sorts of tricks in order to do so.

We also must spread the word –– help explain to your family and friends about this horrible ballot measure and make sure they aren’t fooled into signing the petition. Remember, voters across the political spectrum support and rely on the current protections in Prop. 13.

Finally, help Reform California build the coalition to fight back: be a part of our effort and get your local community involved. We’re also raising the funds to mount a strong opposition campaign to this dangerous ballot measure.

Together we can make sure that voters are informed and educated about yet another deceptive ballot measure designed to drain the wallets of hardworking families across California. Sacramento politicians can be beat, but only through the collective, grassroots efforts of citizens standing up and saying enough is enough! This state has driven out millions of residents due to high taxes already — and we cannot allow another tax increase to drive out all of our jobs and businesses, too.

Dave McCulloch is the President of Reform California.

Voter Warning: Don’t Sign Deceptive Petition Claiming to “Save Prop 13”

Voter Warning: Don’t Sign Deceptive Petition Claiming to “Save Prop 13”

The tax-raisers in California are at it again – and voters need to beware!

Signature collection has commenced on a ballot measure that would gut Prop 13 property tax limitations.  Known as “split-roll,” the initiative would impose a massive tax hike on all commercial, industrial and retail properties. The tax hike would lead to cost increases on virtually everything and everyone.

Politicians have already given the tax-hike measure a deceptively attractive title of “Increases Funding for Schools, Community Colleges, and Local Government Services by Changing Tax Assessment of Commercial and Industrial Property.”

Conveniently, this title for the ballot measure removes any mention of the real proposal – A MASSIVE TAX INCREASE.

What’s worse, proponents of this tax hike initiative are now collecting signatures in front of stores with signs that say “Save Prop 13!”

Backers of this tax hike measure need over 1 million signatures of registered voters to place the item on the November 2020 ballot. 

By hiding the true nature of the ballot initiative with a misleading title – and by outright lying to voters in front of stores to get signatures – the backers of this tax hike measure have shown they are absolutely comfortable resorting to fraud to impose their tax hike.

If you want to protect Prop 13 and stop massive tax hikes in California, you need to do two things IMMEDIATELY:

  1. Spread the word: Voters are urged to NOT SIGN the petition and to spread the word to friends, family and colleagues.
  2. Contribute to Oppose the Tax Hike: Reform California is raising funds to oppose this tax hike in the November 2020 election. Please contribute whatever you can today and urge your friends to do the same!

No tax increase will ever be big enough to satisfy the wasteful spending of Sacramento politicians! Help defend Prop 13 today!