What’s a “third-rail” anyhow? Well, for those of us less familiar with the engineering of mass transit, it’s a way of providing electric power to a railway train. You’ve got two train tracks (the first two “rails”) and the third one carries the electricity. You’re not supposed to touch it.
And that’s why calling various political issues a “third rail” is a reporter’s favorite way of describing issues no politician wants to touch. The truth is these often involve the most important public policy issues of a given time—the ones that most urgently need to be solved. But it takes incredible courage and leadership to take them on.
Proposition 13, passed in 1978, is just such an issue. Since it was proposed, people who cared deeply about the long-term health of California have warned that while it created critical protections for homeowners and renters, it also created commercial property tax loopholes that would devastate our schools and public services. And that’s exactly what happened. In 1978, California spent $200 more per student than the national average; today, we spend $850 less than the national average. There have been various attempts to patch the giant funding hole created by the commercial property side of Prop 13, but they’ve mostly failed. Nothing has been sufficient, and our children, our communities, and our economy have suffered ever since. The educational and economic opportunity that once defined California has been steadily whittled away.
But finally, a diverse coalition of determined advocates are challenging the status quo to protect homeowners and renters, make big corporations and wealthy commercial property owners pay their fair share, and invest in our communities. Prop 13 has been the “third rail of California politics” because the public generally misunderstands it. Yes, it set important limits on how fast a homeowner’s property taxes could rise, but it also created catastrophic loopholes for giant corporations and wealthy commercial property owners to avoid paying their fair share of property taxes. When the public learns the truth about the corporate loopholes of Prop 13, they are outraged.
A coalition of grassroots organizers, policy experts, and labor unions—many of whom previously collaborated on the Millionaires Tax of 2012, which laid the groundwork for Proposition 30—have come together to finally fix the commercial property tax loopholes created by Prop 13. These include Alliance of Californians for Community Empowerment, Advancement Project, California Calls, California Federation of Teachers, Courage Campaign, California Teachers Association, PICO California, SEIU, and many others. We are working together to close loopholes by assessing commercial and industrial property at fair market value. We have spent more than a year on groundbreaking research that for the first time shines light on the full extent of the problems created by the commercial property tax loopholes of Prop 13. We can see more clearly than ever that giant corporations paid a smaller and smaller percentage of local property tax, forcing the burden onto homeowners. The very folks that Prop 13 was supposed to protect!