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A group of essential workers from Los Angeles claim McDonald’s is exploiting corporate tax loopholes by failing to pay nearly $30 million in property taxes annually that would help fund schools and a range of essential services, including public hospitals and affordable housing.

The contingent – including nurses, janitors, security guards, school employees and fast-food workers — made its way to a McDonald’s on South La Brea Avenue on Monday to admonish the company for taking advantage of California’s “broken property tax law” and to rally support for Proposition 15.

Representatives with McDonald’s could not be reached for comment Monday.

Prop. 15

The November ballot measure is designed to close tax loopholes for large property holders and spend the resulting revenues on local governments and schools. California, the workers say, would reclaim up to $12 billion each year from wealthy corporations like McDonald’s.

That would be accomplished by amending the state’s constitution to require certain commercial and industrial properties worth more than $3 million to be taxed based on their market value.  Agricultural property would be exempt. The change from the purchase price to market value would be phased in beginning in fiscal 2022.

Supporters say Prop. 15 would also cut taxes for small businesses while protecting homeowners and renters. Opponents claim it amounts to a $12.5 billion property tax increase that would boost prices for food, gas, utilities, daycare and health care.

Standing atop the flatbed of a semi tractor-tractor trailer, workers at Monday’s rally implored Southern Californians to hold McDonald’s accountable and to vote yes on Prop. 15.

“The black, brown and immigrant communities have borne the brunt of this pandemic,” said Robert Branch, a security guard and member of SEIU United Service Workers West. “We need investment in public programs that ensure our health and safety — not cuts.”

A wide discrepancy in tax assessments

Drawing on data from the fast-food giant’s SEC filings and various reports, the workers note that McDonald’s built many of its California restaurants in the 1960s and 70s. Under Prop. 13, which was passed in 1978, they allege those locations are typically taxed on prices that are decades old.

An SEIU analysis estimates a typical McDonald’s store is taxed on a value of less than $2 million, although McDonald’s restaurants in California routinely sell for $4 million or more.

Data from the Los Angeles County Tax Assessor website show, for example, that a McDonald’s at 6904 La Tijera Blvd. was assessed at $8 a square foot, while a Goodwill thrift shop across the street was assessed at $73 a square foot.

Another McDonald’s at 2810 S. Figueroa was assessed at $7 a square foot, county records show, while the motorcycle shop behind it was assessed at $52, and the office building next door was valued at $137 a square foot.

The workers contend McDonald’s makes most of its money charging rent to the franchisees who run 95% of the company’s U.S. stores. The company took in $7 billion in rent from its franchisees in 2018, according to an SEC filing.

Those workers have enlisted the support of Fight for $15, a political movement that’s seeking to boost the nation’s federal wage to $15 an hour. They say McDonald’s in California would pay about $30 million more a year in property taxes under Prop. 15. That equates to $150 million over the next five years.

Schools are in need

Jannette Verbera, a special education assistant with the Los Angeles Unified School District and an SEIU member, said schools were already struggling before the COVID-19 pandemic hit.

“There weren’t enough special education assistants to help our children,” she said in a statement. “We lacked proper equipment and I had to buy basic things like wipes for students.”

Making McDonald’s and other big corporations pay their fair share, she said, means additional funding for distance learning, for the safe reopening of schools and for “quality education for all beyond the pandemic.”