While a just released Public Policy Institute study suggested that lowering the two-thirds vote for school parcel taxes would be limited in effect, don’t think for a moment that the effort to cut Prop’s 13’s requirement to raise taxes won’t be pushed by the legislature next year.
There are still six active bills focused on changing the two-thirds vote requirement for tax increases on the local level. The PPIC study correctly noted that changes to Proposition 13 “is a major focus of attention” in the legislature. Senate leader Darrell Steinberg said he is open to the possibility of changing Prop 13 starting in 2014.
The threat to homeowners and businesses remains alive and strong.
Lowering the two-thirds vote requirement would open the door to more and larger tax increases. When voters agreed to lower the passing mark from two-thirds to 55% in 2000 for school bonds backed by local property taxes (a change not of Prop 13 but of the 1879 state constitution), not only did more tax measures make the ballot, but also the tax proposals were often larger in scope.
The PPIC report argued that parcel tax increases on property for schools are passed more frequently in relatively affluent areas and that situation would not change much with a lower vote requirement.
However, the active bills in the legislature could open the floodgates for tax increases for all kinds of local taxes and services.
In July, the California Local Government Finance Almanac (administered by Michael Coleman) concluded: “Since 2001 and through April 2013, over 2,200 local revenue measures have been placed before local voters concerning school, city, county or special district taxes or bonds. Despite their general purpose use, majority vote tax measures have been more likely to pass. Two out of three of these measures passed. But fifty-five percent school bonds have been the most successful with four out of five passing. In contrast, just half of two-thirds vote measures succeeded. It appears a 55% voter threshold for special taxes would have made a dramatic difference: nearly 80% of all two-thirds supermajority measures garnered more than 55% yes votes.”
What does all this mean to taxpayers? Efforts to raise more property taxes on homeowners and businesses would be inevitable if the legislature passes the measures waiting for action. New tax pressure could stall a softly recovering economy and hurt job growth.
In 2014, the Democrats are likely to have a two-thirds majority in place, something they didn’t enjoy during the closing days of this past legislative session.
The issue of changing Prop 13 is not going away.