At the only gubernatorial debate this fall, Gavin Newsom was asked if Proposition 13 was on the table. His response “Everything is on the table.”
This occasioned the usual gnashing of teeth and outrage from professional Prop 13 defenders. Newsom was supposedly touching the third rail, and putting Prop 13 on the table, and at risk.
If only that were true.
Prop 13 isn’t. on the table, and it won’t be. And not because Republicans or conservatives or anti-tax activists protect it.
Prop 13 isn’t on the table because Newsom, his fellow Democrats, and even labor unions keep it off the table.
To understand what’s going on, it’s important to understand what Prop 13 is. It’s not just a ballot initiative that protected people from property tax rate hikes. It’s really an entire fiscal operating system of the state, upon which both the right and the left have built structures of spending and taxation in the 40 years since voters approved it.
Prop 13 limits how property taxes rise. But its greatest impact is in how centralizes government power at the state level, distorts democracy, and weakness local government.
It does this through two provisions. First, it effectively bars local elected officials from raising taxes themselves, by requiring a supermajority vote of the people for local taxes. Second, it requires a two-third vote for raising taxes by the state legislature.
Each of those provisions have been built upon, with the centralization taxation restrictions extended to fees and even to measures that cut taxes. A host of constitutional amendments and other spending taxation measures are constructed on this Prop 13 infrastructure.
And this entire Prop 13 structure—or ecosystem, if you prefer—is decidedly not on the table. Jerry Brown protected it, and called those of us who insisted on reform “declinists” and “unrealistic.” Newsom has not indicated he’ll take on the system either. And even if he wanted to, many Democratic interest groups have come to depend on the system, since they built their own protections and special deals upon it.
So what is Newsom talking about? He may be referring to efforts to tweak Prop. 13 to limit its property tax protection for commercial property; there is likely to be a ballot initiative on that subject. He may be talking about some sort of tax reform that extends certain taxes to California’s service economy.
But those don’t fundamentally alter Prop 13. They likely would just embed it more deeply in the state’s governing system.
So you can ignore the scaremongering from the right, and the pledge of action from Newsom and others on the left. Prop 13 isn’t on the table and menu, and it’s highly unlikely that will be.
But it should be. Because California desperately needs to uproot its Prop 13 system and replace it with something simpler, more democratic, and flexible.