Why Small Business Owners Should Support Proposition 15 #YesOn15

Earlier this year, I spoke with the California Board of Equalization in support of Proposition 15 (the Schools and Communities First Act), which would close longstanding commercial property tax loopholes that overwhelmingly benefit a small fraction of large corporations.

I am getting a lot of questions about this proposition and its impact on small business owners, like myself. Therefore, I wanted to share the transcript of my speech and why I’m personally supporting Proposition 15.

The summary of it: When we all pay our fair share, local businesses thrive and our communities have the resources to flourish as well. Friends and family, please vote YES on Proposition 15.

Our communities deserve to thrive.

Full transcript below:

Dear Members of the Board of Equalization and Members of the Public―

Thank you Board of Equalization for allowing a small business owner like myself to talk about how Schools & Communities First, Proposition 15, would benefit businesses and communities throughout California. My name is Devin Murphy, I am a Pinole resident, planning commissioner and local small business owner.

Prop. 15 is good for business, good for our local neighborhoods, and good for our children. Small businesses are the backbone of our communities, working to provide services, food, and goods to our local customers; and they’re run by parents, neighbors, homeowners and renters, users of public services like parks and libraries, and members of the community at large.

Schools & Communities First is a win-win for us. It protects small businesses, cuts business personal property taxes, levels the playing field, and brings nearly $12 billion every year in much-needed resources for our neighborhoods and schools. These are essential investments that would benefit small businesses throughout the state, giving our students and neighbors access to the local critical services and schools that we’re all relying on so much.

By closing longstanding property tax loopholes that overwhelmingly benefit a small fraction of large corporations, we can level the playing field for businesses like ours who are already paying our fair share. Small businesses and entrepreneurs are at an inherent disadvantage if we’re competing against a corporation that is paying property taxes based on artificially low assessments done decades ago. To emphasize this point, a recent analysis of the initiative clearly showed that only 10% of the biggest, most expensive commercial and industrial properties would generate 92% of the new revenue — illustrating the fact that a small percentage of businesses at the top currently have an unfair advantage in our economy.

Prop. 15 exempts commercial and industrial property worth a combined $3 million or less, and data from the University of Southern California showed that 90% of such properties are worth $3 million or less.

Moreover, Prop. 15 completely protects residential property — including explicit protections for such property that home-based businesses operate out of, businesses like mine. More than half of all small businesses in California are home-based, according to the Department of Industrial Relations.

The 3 to 5 year phase-in timeline also provides some extra cushion for large commercial property owners to adjust.

Small businesses like mine, and others that have been hit hardest during this crisis, would also benefit from the business personal property tax cuts included in this initiative. Not only will every single business in the state see exemptions on business personal property worth up to $500,000, small businesses would be completely

exempted from such taxes going forward — providing small businesses with the level playing field we need to compete.

I personally run two businesses: a digital marketing firm for nonprofits and emerging companies, and a vending machine company. Each business would benefit from Prop. 15 exemptions and tax cuts. In particular, if passed, my both home-based businesses would both benefit from exempting up to $500,000 of equipment and fixtures from the business personal property tax.

Right now, businesses are paying market rate rent regardless of how much their landlords are saving in low property taxes, period. The same goes for consumer prices, which is dictated by the market and not how much the property owner saves in property taxes.

Small businesses, especially those owned by people of color, have been disproportionately impacted by the tax loopholes that divest from our community in favor of corporations. When the largest commercial property owners don’t pay their fair share, we all bear the burden in the form of increased fees, sales taxes, gross receipts taxes, parcel taxes, bond measures, and more. When we all pay our fair share, local businesses thrive and our communities have the resources to flourish as well.

Thank you.