Prop. 13 and our failure to communicate

By Brendan Huffman

Consultant specializing in Public Policy and Regulatory Issues

Thu, July 17th, 2008

Michelle Steele’s response to my post yesterday asking why Speaker Bass has placed Prop. 13 off limits for discussion about fiscal reforms reinforces two common perceptions among folks in my age group:

Republicans love gag orders
Baby boomers, now that they’re the status quo, don’t like being challenged by younger generations

Yesterday, I asked why Prop. 13 is off limits for discussion in Speaker Bass’s task force. Ms Steel responded “because it works.”

I am fully aware and appreciative that Prop. 13 protects homeowners from escalating property taxes. My question is why my generation of home buyers has to pay so much more in property taxes for homes that are typically smaller than the homes we grew up in. That question was not addressed and since we’re not allowed to discuss Prop. 13, I suppose it will go left unanswered.

California’s fiscal situation is shameful. Spending has increased 40 percent in just five years, and our taxes are already among the highest in the nation. California is losing its competitiveness to keep jobs here while our middle class slowly shrinks. I am glad that Bass is looking carefully at these problems.

I don’t think we need more studies, but it that’s what it will take to right this ship then Bass’s task force should get to work now—and not be told that sacred cows like Prop. 13 (and Prop. 98) are off the table.

The status quo is not acceptable.

p.s. I loved Howard Jarvis in his cameo appearance in the 1980 movie “Airplane!”

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Proposition 13

Submitted by Visitor (not verified) on Thu, 07/17/2008 - 15:08.

I don't know what size of home you grew up in, but typically homes built in past generations are much smaller than the mega-sized, multi-level tract development homes built today. You also paid more for your home than your parents did (even counting inflation) and property tax is based upon market value. And, by the way, it isn't just homes that Proposition 13 protects from over- taxation. It also apartments, condos, business and industrial rentals and other tenant-based property. If you would like to raise property taxes, then be prepared for higher rents across the board including for businesses. Landlords cannot sustain more costs without compensation from tenants. So let's see. By raising property taxes, business will have to raise the price of their goods and services to make up the difference in expense, and homeowners who have to pay more in property tax will not be buying as many goods and services because they will have less money to spend. And I thought you were supposed to be representing industry and commerce!

Because you can't have it both ways.

Submitted by Visitor (not verified) on Thu, 07/17/2008 - 14:03.

We can talk all we want about Prop. 13. Perhaps this will answer your question on why a change to it really is a non-starter more directly: a property tax based on market value (as opposed to Prop. 13's adjusted base year value system) can't protect property owners from escalating property taxes. You can't have it both ways as your retort suggests you do. What's more, the adjusted base year value system provides a "governor" if you will on the ups and downs of the market keeping Sacramento (and locals) from spending up to the peaks of revenue. Of course you could fix all of this by eliminating the ad valorem system for taxing property all together... Good luck with that. Prop. 13 isn't perfect. But as Churchill once said about democracy. "... [it's] the worst form of government, except for all those other forms that have been tried from time to time."

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