It may well make sense to roll back Prop 13 protections for commercial property, with the goal of providing more tax dollars to the state.
But the split roll initiative scheduled for the 2020 ballot is the wrong way to do that.
The big problem with this version of split roll isn’t the Prop 13 tax piece. The big problem is that the initiative is actually a detailed spending measure—and a terribly flawed one at that.
Specifically, the initiative creates new constitutional formulas for spending and walls off the new tax money from any kind of democratic accountability or discretion. This is exactly the kind of ballot-box budgeting nonsense that has become a plague in the Prop 13 era. Indeed, this version of split roll isn’t really a rollback of Prop 13—it actually more deeply embeds the dysfunctional Prop 13-based system in California governance.
So what’s wrong with the initiative?
An initiative to raise taxes should put the money into the general fund, where it should be unencumbered. That way, democratically elected officials can make decisions about how to spend it. That power is essential because it gives officials flexibility to move money around when needs change or the economy produces less in tax revenues.
But this measure limits flexibility and democracy. Instead, this measure uses the state constitution to forbid the governor, controller, or legislature from touching this new money. It takes the additional tax dollars from splitting the roll and puts them in special funds.
And it does this in a complicated way, with exemptions that have to be calculated.
The money also goes overwhelmingly to the cause favored by the primary sponsors of the measure: K-14 education. That’s because this is a teachers’ union measure. Worse still, the money here is funneled through the broken and unaccountable LCFF (or Local Control Funding Formula). That formula is supposed to send more money to poorer districts with poorer students, but the formula lacks accountability procedures, so we don’t know if the money has any impact.
Why no accountability? Because the teachers’ unions have succeeded in resisting accountability for LCFF (and have undone the accountability system for California schools).
This initiative leaves no money for priorities in health care and in other parts of education—notably early childhood, which Gov. Newsom is rightly authorizing.
Effectively, this is a narrow pay-to-play measure that could make our budget process worse, while actually strengthening the Prop 13 system. It’s a measure that should be opposed by people across the political spectrum.
It also is likely to discredit the righteous cause of overturning Prop 13. The heart of the initiative – the 2/3 votes for taxes at the state and local level – should be repealed. I fear that this poorly constructed measure will go down, and it will be another few decades before Prop 13 is targeted again.
My advice: the legislature should come up with its own alternative split roll that doesn’t prescribe where the money goes. And it should do this as part of a larger tax reform and a vote to ask voters to write California the new state constitution it so badly needs.