Anti-Prop 13 Chorus Singing Again

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

“It’s all Prop 13’s Fault” chorus is at it again. You can count on them like clockwork during difficult economic times – world recession not withstanding – to blame Proposition 13 for California’s economic woes in commentaries and cartoons. I often wonder where this chorus goes when government treasuries are flush.

Chris Reed of the San Diego Union-Tribune points to statistics in his blog that show property taxes under Proposition 13 have increased faster not only than population and inflation growth, but faster than other sources of state revenue as well, despite the property tax cap.

Yet, while these other state taxes, such as the income and sales tax, are susceptible to volatile swings tracking the economy, under Proposition 13, the property tax has grown steadily and is the most reliable revenue source. That would all change if “fixes” applied to Proposition 13, like a split roll to collect more property taxes on commercial property, were put into effect.

Over the years, the list of charges made against Prop 13 is long and varied. The cartoon in the Sacramento Bee linked to above that declares Prop 13 caused the beginning of the end of California civilization falls neatly in line with past accusations.

Prop 13 has been blamed for more than lack of revenue for government services. It has even been implicated in a child’s tragic murder. The writer Richard Reeves argued in a Money Magazine piece that 12-year-old Polly Klaas may have been rescued by the police before she was killed if officers had compatible police radios surely denied them by the Prop 13 tax cuts.

When the Loma Prieta earthquake collapsed freeways in the San Francisco Bay Area in 1989, Paul Conrad’s Los Angeles Times editorial cartoon showed a car crushed by a freeway and the license plate on the car read: Prop 13.

When O. J. Simpson was found Not Guilty in his criminal trial, a column in the New Republic said it was Howard Jarvis and Prop 13’s fault. Because of the tax cut there was not enough money to hire competent police officers and coroner officials, the writer argued.

And that’s just a partial list.

Using the arguments against Proposition 13 as a catalyst, there is talk that more power should be shifted to local government with new revenue streams created for local governments to carry out their responsibilities. Keeping government decisions closer to the people is a good idea. But that doesn’t mean new revenue streams have to be created while all the current revenue collected by the state stays with the state.

Local government responsibilities can be funded by directing revenue all ready collected into local government coffers. In turn, with fewer responsibilities for the state, the state government will need less revenue. In fact, proponents of Prop 13 bashing and local government empowerment might unwittingly lead people to conclude that under this arrangement of locals taking more responsibility the state requires only a part time legislature.

Supporters of increased state spending have spent 31 years trying to make Proposition 13 the bogeyman. They have had success in some media outlets, particularly out-of-state newspapers. Just recently a column published in the New York Times suggested that if the federal government supplies loan guarantees to California, in return, it should demand that Proposition 13 be repealed.

But, for a great majority of the people of California who live with Prop 13, the bogeyman label doesn’t stick. Look at the polls. The measure passed two-to-one in 1978 and polls indicated it is supported two-to-one today. For the voters of California, the question of who do you trust, the politicians who want to change or repeal Proposition 13 or Prop 13, itself? The answer has never been easier.

Prop 13 Statistics

Does anyone know the statistics of Prop 13? How many home owners fell under the prop 13 benefits in the begining and how many still qualify for benefits. I think the number of home owners that still have prop 13 qualifications has been greatly reduced do to deaths,moving to new counties, and etc. Prop 13 will soon be reduced to a very small elgible few qualified home owners and have very little effect on state property tax revenue.

Prop 13 Discussion Must Include Redevelopment Reform

The real shift of control began BEFORE prop 13, with Serrano V. Priest, with a lawsuit to force equalization of tax revenue between wealthy and poor school districts. Many people say Prop 13 was a reaction to Serrano V. Priest. Also, there is so much land held in redevelopment agencies across the state of California, that changes to Prop 13 would mean a big flood of new tax revenue (tax increment) that goes not to the state nor to our schools, but to the redevelopment agencies to subsidize development projects. Click my name, or this link: http://actionalameda.org/actionalamedanewsblog/2009/05/28/as-school-fund...

Keep in mind, the founding

Keep in mind, the founding fathers of the US Constitution did not want direct democracy either. Liberal or not, they promoted an elitist system, hence representational government where only well-to-do white landowners could vote. They feared that the masses, once they figured out that they had the political power, would vote themselves what they wished, which would not be in the best interest of the public. What a concept, kind of like California at the moment.

The problem w/ Prop 13,

The problem w/ Prop 13, Joel, is that little clause that transferred the apportionment of property taxes to the state legislature --- one of the greatest transfers of power from the locals to the state in anybody's history. I notice you didn't mention that one...

What they mean is 'people are too stoopid to vote'!

Your points are well taken but the real caveat the liberal are pushing the people are 'too stoopid to vote'. How dare they vote? The whole basis of freedom is government of the people, by the people, for the people. That is what democracy is all about. Allowing masses to have their voices heard by the ballot box. Whether by legislators and also by direct democracy. Liberals hate direct democracy because they have a pre-described notion of how the world should be to them. When people vote the way they want the say it is the will of the people. They loved that Obama was the will of the people. Now on other votes like Prop 13, Prop 8 and the recent Special Election they loathe that people have a say in their democracy. The say 'we can't allow them to vote on these matters of marriage and tax structure or budgets'. Just let them vote on legislators who have a different will of the people. The matter of right or wrong is not was is at vote, it is the will of the people. A free democracy allows the will of the people to be heard whether it is existentially right or wrong. Hell if the people voted 2+2=5. That supports the will of the people not what is existentially right or wrong. So for the liberals a tip: Work to change minds and attitudes and quit trying to change the will of the people. Liberals have made changes to society that have worked and some that haven't worked. But liberals please don't try and stop the will of the people. Work to change the mind of the will of the people. That is a slow process but the payoff is much better. Totalitarian mandate is not good either from left or right.

Prop 13 revenue is reliable

It turns out that property tax revenue is FAR more stable than our other forms of tax revenue. Income tax revenue is plunging, and sales tax revenue is dropping. But property tax revenue seldom goes down AT ALL. Since Prop 13, San Diego County property tax revenue has ALWAYS gone up – every year. Even this year. The SD County Assessor reports that total property tax revenue for this fiscal year ending June 30 is UP 0.9%. If you look at just the pure real estate property tax revenue (ignoring the “supplemental property tax” revenue which is not subject to Prop 13 limitations), real estate property tax revenue this year is up 4.1%. Not one person in a thousand knows this – the press has not (yet) covered this amazing fact. Revenue is up because the structure or Prop 13 has the little-known added benefit of smoothing out real estate property tax revenue from year to year. Most properties this year (generally those purchased prior to 2003) had their property tax go up 2%. Add to that the resales, property improvements and new structures (which establish new tax assessment levels), and the revenue grew in spite of the downturn. Next year, in this real estate collapse, a mild drop in the order of 2%-4% in total property tax revenue is projected by our county assessor. Given our dramatic economic decline, this is an incredibly small drop, coming in the fourth year of a real estate meltdown.

Prop 13 revenue is plentiful

Prop 13 is no problem at all -- except for profligate spenders. Take my San Diego County. Please. According to the SD County Tax Assessor, in 1977 -- the year BEFORE Prop 13 took effect -- our countywide property tax revenue was about $639 million. For this 30 June concluding 2008-2009 fiscal year, our county assessor is projecting revenues of $4.656 BILLION. For every property tax dollar collected in 1977, the county today collects $7.29. During that time frame, our county population has grown about 83%, and inflation has gone up about 260%. Hence property tax revenues today are substantially higher than the bloated PRE-Prop 13 year, even after adjusting for inflation and population growth.



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