California’s Property Tax Loophole is putting public health at risk

California’s current commercial property tax system is starving local governments, cutting off positive investments in our communities, and stretching our safety net to the breaking point.

California’s Corporate Tax Loophole, passed 42 years ago, stripped local governments of vital funding for public health services. Despite few resources, counties support health care in their communities by funding: County Hospitals, Community Clinics, and Emergency Medical Services.

Human Impact Partners, an organization that conducts health policy research, says that the loophole: “has decimated a longstanding funding source for programs and policies that keep our communities healthy. Many of the health disparities our state suffers from now can be traced back to [the corporate loophole].”

Fast Facts

• In 1964, California had 66 county hospitals. Today there are only 16.

• Since 1995, 20 of California’s rural hospitals have shut down, despite a growing rural population.

• California ranks among the 10 worst states in emergency response times.

• Between 2002 and 2009, there was a 10 percent reduction in California’s hospital beds.

When these hospitals close, thousands of employees also lose their jobs.

California needs real solutions

Closing the corporate loophole will restore $12 billion a year to our local communities, and with it comes much needed funding for our health care systems, which safeguard our communities’ ability to fight public health crises. Local governments will have billions of dollars to spend on health clinics, trauma care, emergency rooms, and other necessary health services. This commonsense initiative directly benefits public health and health equity.

Additional funding helps expand access to resources and opportunities that all people need to thrive and be healthy. Not only will counties be able to support action on community-level factors that impact health, including environmental, economic, and social conditions, they could also use these resources to improve access to health care, mental health, and social services. 

THE CURRENT CORONAVIRUS PANDEMIC has made it strikingly obvious that we need a stronger public health infrastructure. In recent years, funding to local and state public health agencies has been cut and we are now observing the effects of these cuts. Closing the corporate loophole would provide local governments in California funds they could invest in our public health system, so we are better prepared for future emergencies.

Public health impact of closing the corporate loophole

With the influx of funding, California counties could afford to fund public health services. For example, Human Impact Partners reports the following:

• Alameda County can cover the costs of 3,200 more people to receive health care at community clinics and connect 750 people with mental health or substance abuse support.

• Los Angeles County can cover the costs for 48,000 more people to receive health care at community clinics.

• San Francisco County can cover the costs for 12,000 more people to receive health care at community clinics, and 1,000 more undocumented residents to get affordable health care. 

• Santa Clara County can cover the costs of 8,500 more people to receive health care at community clinics.

We need this now more than ever

In order for Californians to stay safe and healthy, local governments need immediate and significant resources. With increased funding, health providers can better inform and educate our communities, provide vaccines and testing needed to treat an outbreak, ensure enough clinics and hospital beds to treat those who are ill, and even offer paid time off to recover. By closing the corporate loophole, we can come together to show that we care about the health and safety of ourselves and our communities.

Sources:

• Human Impact Partners

• The California Association of Public Hospitals and Health Systems

• The Mercury News

• Los Angeles Times

• Center for Health Journalism

• The Sacramento Bee