Tom Steyer Advocates for Special Election to Boost Corporate Taxes: What It Means for the Economy

California gubernatorial hopeful Tom Steyer is setting his sights on a 2027 special election with the aim of revisiting the state’s contentious Proposition 13. He proposes reassessing commercial properties at current market values, a move that is likely to stir significant political debate over taxation.

In a conversation with Politico, Steyer, who has aligned himself with advisors connected to New York City’s far-left Mayor Zohran Mamdani, expressed his intention to push for this special election. He has been communicating with union leaders about his willingness to support an increase in corporate taxes.

“The recent Republican tax legislation is poised to create substantial fiscal challenges for California, potentially leaving a significant budget deficit,” Steyer told Politico. He referenced the healthcare cuts associated with President Trump’s major tax reform passed last year.

He emphasized the urgency of the situation, stating, “We can’t afford to delay. We’re operating on a tight timeline, and a special election is our only viable path forward.”

Proposition 13, enacted by voters in 1978, was a response to rising property tax burdens and amended the state constitution. It established a cap on the property tax rate at 1% of a property’s assessed value and restricted annual increases in assessed value to 2%, unless the property changed ownership.

The proposition was primarily intended to safeguard homeowners, particularly retirees with fixed incomes, from being financially overwhelmed by escalating real estate prices.

Prop 13 has since become a cornerstone of California’s tax system.

A “split-roll” system, long favored by labor unions and progressive activists, would carve commercial and industrial properties out of those protections by reassessing them regularly at current market value while keeping Prop 13’s limits in place for residential properties.

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Supporters argue the change would generate billions in new revenue for schools and local governments, while opponents contend it would raise costs for businesses and ultimately ripple through the broader economy.

Enlisting union support is crucial for Steyer and his Democrat rivals in the race.

The latest Emerson College/Inside California Politics poll shows Steyer lagging both the Democratic frontrunners and the broader field.

Among likely voters in the June 2 top-two primary, Republican Steve Hilton leads with 17%, followed by Rep. Eric Swalwell at 14% and Riverside County Sheriff Chad Bianco at 14%, with former Rep. Katie Porter at 10% and Steyer at 9%.

Among Democrats specifically, Steyer draws 12%, trailing Swalwell at 23% and Porter at 14%, underscoring that he remains behind the party’s leading contenders as well as the overall field.

A corporate tax hike in California was panned by experts who spoke to the California Post. They said raising taxes on companies will simply spur more of them to relocate outside of the state.

“This isn’t tax reform, it’s economic self-sabotage — when you punish the people who create jobs, you don’t soak the rich, you soak the workers through layoffs, higher prices, and empty storefronts,” Ted Jenkin, managing partner at Exit Wealth Advisors, told the California Post.

“A split-roll tax isn’t a revenue plan, it’s a relocation incentive.”

The California Post has sought comment from Steyer.