Sen. Steinberg Answers the Prop 13 Question – Sort of

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

At his press conference yesterday, Senate President Pro Tem Darrell Steinberg got the expected Prop 13 question, as in: now that you and the Democrats have legislative supermajorities are you going to mess with Prop 13?

Steinberg jokingly responded: remind me what Prop 13 is.

Gladly senator.

It ‘s that ballot measure that the voters still understand protects them against out-of-control taxes.

Steinberg went on to say that he thought it should be easier to raise parcel taxes, a type of property tax that is not based on a property’s value but is levied equally on all properties within a tax jurisdiction.  Steinberg supported the proposal put forth by Senator Mark Leno that would lower the vote on parcel taxes for cities and schools from a required two-thirds vote to 55-percent.

Clearly, the result of the Proposition 30 vote, heralded as a plan to raise taxes for education, played into Steinberg’s belief that voters would go along with the parcel tax change. However, while that vote raised the sales tax a quarter-cent, most of the Prop 30 tax increase fell on a relatively small portion of taxpayers. Parcel taxes would have a more direct affect on local taxpayers.

Prop 30 is one reason that state legislators want the parcel tax vote requirement lowered. The Prop 30 tax increase is temporary. It goes away in seven years. School officials will not want to see those revenues disappear. Even if the economy comes back, as the governor argued would happen to fill the budget hole when the Prop 30 taxes go away, the education establishment will still want to keep that revenue flowing.

If the parcel tax vote is changed, state officials could tell the schools to raise replacement revenue locally.

Steinberg said that he would like to see the two-thirds vote requirement for special taxes change for other local government services, another provision of Prop 13. He said he didn’t understand why a special tax, which is dedicated for a specific service, required a two-thirds vote and a general tax that could be used for any purpose requires only a majority vote. Steinberg seemed to suggest that voters would get what they want if they can earmark their tax dollars.

Isn’t that philosophy opposite of what the senator and his fellow Democrats have been arguing? Don’t they want government officials to have discretion to make decisions?

If tax revenue were dedicated for a specific purpose, politicians would not have the power to make changes if circumstances require it. Reversing the two-thirds and majority votes as Steinberg suggests means that favored services likely would be flush while other necessary government services would go wanting. Voters would vote for services they like.

More likely, officials would shift certain services to special taxes freeing up general taxes for other services and obligations, such as pensions. For taxpayers, the bottom line result would be an increase in local taxes.

While Steinberg tried to tamp down expectations of seeing big changes right away, he indicated that Prop 13 likely could receive the supermajority’s attention at some point. In answering the Prop 13 question, he first said that the legislature had to build a foundation of success and have tangible achievements before we start….’ His voice trailed off. Then he said the legislature should not be afraid of anything.

Prop 13 — here they come.

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