CalNonprofits Articles

California is being hurt by new federal policies: the new tax law, the federal budget, threats to withhold federal funding to California, the proposed cuts to MediCal, and the undoing of coastline protections (just to name a few).

As part of our campaign Nonprofits Standing Up for California Communities, CalNonprofits is on the steering committee of a collaboration working to close a long-standing corporate tax loophole, and as a result, bring more than $11 billion per year to California -- for education, for social services, and for basic local services such as water systems and trauma centers. These funds will stay local -- within the counties where they are collected.

What is this loophole, anyway?
When we Californians enacted Proposition 13 to stabilize property taxes for homeowners, we unintentionally created a boondoggle for corporations. Older companies (like those having held property for 40 years) -- are paying as a little as one tenth the property taxes of newer companies. The Schools and Communities First (SCF) ballot measure initiative will level the playing field among companies, so that old and new companies will pay comparable rates. Doing so will also eliminate the incentive for companies to create complicated shell corporations to benefit from the loophole.

Wait a minute . . .will the property taxes of homeowners be affected?
No. Repeat: No. Not one bit.

So what will Schools and Communities First actually do?
First, this initiative needs to gather enough signatures to be placed on the ballot for the 2020 election. After we get SCF on the ballot, we will need to get out the vote for it to win. If passed, the Schools and Communities Funding Act will normalize property taxes for large corporations. Corporate real estate will be taxed at its fair market rate -- regardless of whether it was bought this year or 40 years ago. By eliminating the huge and illogical disparities among what corporations pay, we will stop penalizing new companies and at the same time, increase funding to California counties. (And, small business owners are also protected because their properties aren't reassessed until after they sell them).

What's the nonprofit angle?
The California nonprofit community is an important partner with counties. Most of our contracts to provide healthcare, mental health, environmental restoration, K-14 educational supports, and family services are with county governments. And as nonprofits, every day we see how local governments are forced to pay low teacher salaries, cut trauma clinics, and allow blight and toxics to go unaddressed. Every day we see the impacts of under-funding services. Standing up for communities includes standing up for the services and institutions that communities of all types rely on. Now, more than ever, we nonprofits must look beyond the next foundation grant proposal to large-scale, permanent changes in our tax structure to support the work we do.

So how do we get this on the ballot?

There are three important ways to help bring $11 billion per year to California schools and communities:

1) Get, sign, and share free petitions: Make sure you sign one, and ask your friends and family to sign too. Sign up with the campaign here, and use this website to find out where to pick up petitions.

2) Endorse the campaign: You can add your name either as an individual or as a nonprofit organization.

3) Tell everyone you know about Schools and Communities First. On your personal Facebook page, on your organization's Facebook page, through NextDoor, on LinkedIn, on the church bulletin board. Consider gathering signatures at local community events, or in your waiting room. Visit the the Schools and Communities First campaign website to learn more, and then follow it on Facebook and Twitter so you can see and share updates from the campaign.

If you have questions, please contact Nancy Berlin, CalNonprofits Policy Director.

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