Proposition 13 is “On the Table.” What Does That Mean?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In the gubernatorial debate when asked if Proposition 13 was “on the table,” Gavin Newsom responded, “Everything is on the table.” So Newsom’s going after Proposition 13? Maybe, but I think he plans to take on the state’s tax structure a bit differently.

Perhaps its my background, but if I were John Cox I’d devote a lot of advertising time to arguing that Newsom wants to undo Proposition 13. Despite being a target of tax-obsessed interests with big megaphones for decades, the tax reform measure still enjoys two to one support in polls. Cox ought to take advantage of that.

Newsom has already showed signs he I s sympathetic to the split roll property tax proposal that could qualify for the 2020 ballot as early as next week. And, the split roll raising taxes on commercial property  is a step toward undoing all of Proposition 13.

But with Newsom’s answers to reporters after the debate, it is more likely his first tax target would be elsewhere.

Cue Senator Bob Hertzberg and his service tax proposal.

Newsom told reporters that too much of California is untaxed. A strange comment since California is a national leader in taxing its citizens. However, when California taxation is compared to yesteryear, there is a a dramatic increase in the service economy while sales taxes on goods continue to fall in relation to other taxes collected by the state.

Meanwhile, Sen. Hertzberg plans to continue his efforts to introduce a wide-ranging service tax to Californians. He will revive the efforts of the Think Long Committee through the Bruggeun Institute to continue modeling the plan and give Newsom a platform to consider major tax reform—should Newsom get elected.

Newsom will look to a service tax plan to take some of the volatility out of the tax system. Yes, he’d probably like to get his hands on property taxes as well since that is the most steady and reliable tax officials in the state collect. But a full frontal assault on Proposition 13 is a bridge too far. He should follow Governor Brown’s example on dealing with Prop 13 if he wins the governorship—leave it alone.

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