Beware of lawmakers selling Prop. 13 snake oil

December 4, 2012 - By Katy Grimes

Dec. 4, 2012

By Katy Grimes

Like geese migrating South for the winter, every year a combination of journalists, editorial boards, and “experts” join California’s liberal politicians in calling for the repeal of Proposition 13. They can’t stand the 1978 ballot initiative which revolutionized the property tax system in California.

The latest clarion call comes from Democratic Sen. Mark Leno from San Francisco, who announced last week that he plans on introducing a constitutional amendment that would turn Prop. 13 on its head. Leno’s amendment would allow local parcel taxes for schools to pass with 55 percent of the vote, instead of the two-thirds currently required by Prop. 13.

“This change in law would give voters the power to make decisions about public education at the local level, allowing schools much-needed flexibility to improve instruction, fund libraries, music, the arts or other programs, or hire more teachers to reduce student-to-teacher ratios,” Leno said in a statement.

Despite the annual arguments predictably attacking Prop. 13, “The $55 billion in property tax revenues is 11 times what they were after Proposition 13′s passage,” Sacramento Bee columnist Dan Walters reported.

This is more than the growth in state income and sales tax revenues during that period, despite the rate limit, according to Walters.

Ignoring reality

But Democrats and members of the media continue to ignore what led up to the 1978 taxpayer revolt. Prior to Prop. 13, property taxes doubled in 10 years, with some elderly Californians literally taxed out of their homes. There was no limit on annual property tax increases, and no end in sight.

California’s greedy government refused to help property owners even though the state was running a surplus.

In 1978, Prop. 13 was passed overwhelmingly by angry voters, 65 percent to 35 percent.

Prop. 13 cut the property tax rate from an average of three percent of a property’s value to 1 percent, and required a two-thirds supermajority in the Legislature to pass any tax increase in the state.

Prop. 13 returned property assessments to 1975 levels and capped annual property tax increases at 2 percent.

Prop. 13 caused a major shift in thinking in the state, as many property owners began to question the outrageous growth in property taxes that had been foisted upon them.

Assaults on the voter initiative

A 2011 cover story in the Economist magazine was just one of many attacks on Prop. 13. The Economist reported that, in 2011, California was at the end of its fiscal year with a huge budget hole, but incorrectly blamed Prop. 13.

The argument always used by Democrats and liberal media is that, because voters agreed overwhelmingly to make property taxes predictable and more affordable, the California Legislature is unable to balance the annual state budget.

This argument is a truckload of baloney. The Legislature had already refused to balance the annual budget several years in a row before Prop. 13 was passed. The voter initiative just became an easy and convenient fall guy.

Déjà vu all over again

Leading up to the passage of Prop. 13, tax reform advocates had tried unsuccessfully to pass tax reductions and reforms. California’s liberal Democratic Legislature, and equally liberal Gov. Jerry Brown, refused to deal, which led to one of the biggest tax revolution since the Boston Tea Party.

Brown was an outspoken opponent of Prop. 13, but became a survivalist and changed his tune quickly when it came time to run for re-election. Brown declared himself a “born-again tax-cutter.”

Many California taxpayers today wish Brown would embrace his “born-again” era.

The elderly were hardest hit, and will be again

According to the Howard Jarvis Taxpayers Association, named after tax fighter Howard Jarvis who spearheaded Prop. 13, prior to its passage, “Some properties were reassessed 50 percent to 100 percent higher in just one year, so their owners’ tax bills skyrocketed, often beyond the homeowners’ ability to pay their property taxes!”

In one year in Los Angeles County alone, more than 400,000 people were unable to pay their property taxes.

Seniors and the elderly were among the hardest hit prior to Prop. 13. Although many had paid off their mortgages, they still were faced with losing their homes because they couldn’t afford to pay skyrocketing property tax bills.

Out-of-control spending, and misspent priorities

The current efforts to undermine Prop. 13 are an ill-fated attempt to fund misplaced priorities.

In 2012, the Legislature recklessly voted to fund the $68 billion-and-growing high-speed rail project. The Legislature agreed to fund the first stretch of high-speed rail for $8 billion. The “train-to-nowhere” will start with 130 miles from Madera to Bakersfield.

In October, the California Air Resources Board held the first carbon credit auction. This tax on business will not result in lower carbon emissions in California, nor will this program do anything to end global warming. But businesses will pay anyway.

The recklessness with which California lawmakers and Gov. Jerry Brown are driving this dangerous vehicle, will undoubtedly end up in a fiery crash… and they are planning on dragging the state’s cash-strapped citizens behind the car.

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Comments(21)
  1. surfpunk says:

    prop. 13 will be overturned next year.Once you decide to leave the state,the circus in SAC. will not bother you,it will entertain.

  2. Tony Cavalli says:

    An example must be made of Leno. I live in his home base of the Noe Valley and have voted for him reluctantly because a commie usually runs against him in the primary. There is only one political party in San Fran, which of course reflects a major problem here.
    Prop 13 was voted in. Let the people vote on it again. The election period would give both parties time to make their case. That would be ” The right thing to do”.
    Somebody smarter than me has to think about how to limit Leno’s future political career. That man is Dangerous!

    Tony

  3. Tax Target says:

    yeah i am going to leave so maybe i should support every nincompoop tax proposal to destroy the libtard land of Oz…. Support every idiot environmental agenda, in other words tie the state up in its own knots of regulation.

    This will be very, very entertaining!

  4. Rex the Wonder Dog! says:

    They WONT TOUCH 13…NO WAY.

  5. Rex the Wonder Dog! says:

    At least residential/ I would not mind seeing commercial property assessed to market on say, oh I don’t know, once every 10 years.

    That way these large corps that own their property and have for decades will pay some fair share of their market value property.

  6. Ted Steele, Janitor says:

    LOL— Mark this date for the archives– Another Poodle prediction! He can’t help it! Poodle— is a strange combo of ignorance and arrogance!

    Rex the Wonder Dog! says:
    December 4, 2012 at 5:13 pm
    They WONT TOUCH 13…NO WAY.

    So far, for those faithful CWD-ers…the Poodle is 0 for 14 ™! with predictions! You go girl!!!!

  7. Rex the Wonder Dog! says:

    Teddy- can you stop spamming the board, and let John Katy and Wayne have the board back for real discussion….sheeeeeezz. You are incorrigible :)

  8. Donkey says:

    The fact that the RAGWUS machine can tax anything is scary; that they can tax your labor reduces incentive; that they tax your purchases reduces commerce; that they have the ability to tax your property can make you homeless at any moment, this I lived through in the late 1970′s as RAGWUS feeders greed forced thousands of retired citizens from their homes in attempting to increase their wealth through the evil manipulation of property value on a whim.

    I envision citizens free of property taxes, thus secure in their homes!! :)

  9. Ted Steele, Janitor says:

    0 for 14(tm) !

    Hard to accept, huh?

  10. Hondo says:

    Do I hear that communist anti prop 13 dog whistle?
    There ain’t no more money left to steal.
    Hondo…..

  11. Paul Preston says:

    Unintended Consequences of Proposition 13 abound. One of the major ones is the centralization of funds ie taxes going to the state and not to the local communities. Generally speaking before Prop 13 local funds stayed locally after prop 13 they were sent to the state. This was the result of several legislative acts by the state (see Proposition 13: Some Unintended Consequences by Jeff Chapman). Now we have funds that flow to the state from the local communities and the state ‘controlling’ the distribution of those funds. In short a few in Sacramento now control these funds that the many need. Less autonomy and local control has created a slew of problems at the local level. Take k-12 education. From the above article: “In the past, local school districts were always heavily dependent on state aid (and faced state mandates). However, with Proposition 13 eliminating the ability of local school districts to raise property tax rates for their schools, and with Proposition 98 establishing a floor (or ceiling, depending on the economy and legislature), for all practical purposes, aggregate school finance is now almost entirely centralized at the state level, and school districts are now passive recipients of state revenues.”
    It’s important to note that the state regularly holds back funds to k-12 schools at the local level as a matter of course ie ‘deferrals’. The legislature has the control of these funds and uses them as they see fit for their own programs without properly funding k-12 schools. This is akin to the president and congress using social security funds as they wish. In California the Gov. and legislature use k-12 funds with the ‘promise to pay’ in the form of deferrals. This is one reason why k-12 schools are owed over $8 Billion (yes BILLION with a B). Think prop 30??? This was the same classic bait and switch routine used by the Gov. and legislature. Campaign on the premise the funds will go to schools but oh bye the way we will use these funds as we wish. Now that prop 30 passed the schools know these funds will not get to them and the KIDS again will be short changed. Let’s not blame prop 13 entirely but the legislation that followed it’s passage. We need to clean this up and return autonomy back to the local governments. Centralized government failed in the old Union of Soviet Socialist Republics and it’s failing in the new Soviet Socialist Republics of California. (SSRC).

  12. BobA says:

    Hondo:

    The state may be out of people and places to steal but there is our children’s future they can steal from. The federal government has been doing it for years now so the states might as well get a piece of the action before they’re left with nothing but our grandchildren and their children’s future to steal from.

    The 13th amendment abolished slavery. It said nothing about abolishing prostitution and pimping. Anyone who works for a living today is a de-facto prostitute being pimped out by Mac-Daddy Uncle Sam who use the IRS and the state Franchise Tax Board to “collect their money from them ho’s.”

  13. StevefromSacto says:

    “I would not mind seeing commercial property assessed to market on say, oh I don’t know, once every 10 years. That way these large corps that own their property and have for decades will pay some fair share of their market value property.”

    OMG! Pigs are flying, the temperature is 27 degrees in hell. I ACTUALLY AGREE WITH REXIE ON SOMETHING!

    If the Dems put up a proposal to split the tax rolls, leaving residential taxes alone while making corporations pay their fair share, it will pass.

  14. BobA says:

    StevefromSacto:

    Once all the corporations have left the state, what then? Our state government has an insatiable appetite for spending other people’s money. An appetite that can never be fully sated and will continue to grow until there is nothing left to consume.

  15. CalWatchdog says:

    StevefromSacto: Most commercial property in the state rents to small businesses. Who do you think owns all those strip malls and industrial parks? Increasing commercial property taxes would see the higher taxes passed on to small-business tenants, many of which would go broke, or leave the state, killing hundreds of thousands of jobs. Way to go!

    – John Seiler

  16. StevefromSacto says:

    So Disney and HP should pay the same tax as my grandmother? LOL.

    Other than those–like John–who want taxes to disappear, most of us are willing to pay our fair share as long as others do the same.

    And while we’re at it, if churches want to get involved in secular politics, tax church property too!

  17. CalWatchdog says:

    StevefromSacto: The point of a parcel tax is that it’s on each “parcel,” whether owned by a person or a big corporation. So I assume you will oppose efforts by Democrats in the Legislature to drop to 55 percent from 2/3 the threshold for passing parcel taxes for local schools and libraries?

    And as to churches being taxed, I assume that you will insist on immediately taxing all the inner-city churches that openly campaigned from the pulpit for Barack Obama?

    – John Seiler

  18. SeeSaw says:

    The thing about parcel taxes is that the property owners have a vote. There are no extra parcel taxes on my property tax bill, because we don’t pass them in my District.

    I think that all churches should pay property taxes if they get involved in political campaigns.

  19. howsadandpathetic says:

    It’s absolutely mind boggling that the 1978 response to skyrocketing home vales was to cap property taxes. If only “reverse mortgages” had been invented to allow newly house-rich to keep their homes despite the increase in prop taxes. Instead we have a system that rewards the least economically productive members of society to live in the most desirable areas without footing any of the bill for the required services necessary to support a growing population The perverse effect is that some of the most expensive areas with elderly populations have the worst schools and young families have to commute to jobs very far away. Luckily, I just work remotely in another state and have my California paycheck mailed to me bypassing the entire ridiculous system, and happily not paying a dime to a state with such disregard for the hand(s) that feed it.

  20. Really? says:

    It’s absolutely mind boggling that the 1978 response to skyrocketing home vales was to cap property taxes. If only “reverse mortgages” had been invented to allow newly house-rich to keep their homes despite the increase in prop taxes.

    Newly house rich? If one pays a mortgage for 30+ years to achieve ownership that makes them ‘newly house rich’? I’m not following-please clarify.

  21. CalWatchdog says:

    Really: It really was bad in 1978. Grandmothers were losing their homes. The government was rolling in surplus revenues. The Legislature failed to act on tax reform. Prop. 13 wasn’t perfect, but it did stabilize state finances for a decade, until the Gann Limit (on spending) was repealed in 1990.

    – John Seiler

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