After Prop 30, What's Next? Reform Prop 13.

|
(23)

 

By Matt Haney

Proposition 30 was a big deal: It raised over $6 billion a year by increasing taxes on the wealthy, balanced the state budget, and allowed our K-12 and higher education systems to put an end to mass layoffs, exploding class sizes, and ballooning tuition.

But one year later, it's about time we ask ourselves: What's next?

Even after Prop 30, the under funding of education and essential services remains, with California still near the bottom nationally in K-12 per pupil funding. Prop 30 was a step forward, but we all knew that we ultimately would have to take on the "Godzilla" of California tax policy: Proposition 13.

Since its passage in 1978, Prop 13 has decimated public education and essential services in our state. Per pupil support in California plummeted from top 10 in the nation to bottom 10, and the tax burden shifted away from businesses and onto individuals. As state investments in services and education went down, poverty went up.

California voters originally passed Prop 13 mainly to protect homeowners. But due to loopholes in the law that prevent regular reassessment of commercial property, large commercial property owners are getting a multi-billion dollar public subsidy. Many commercial property owners are paying taxes at rates that are nearly unchanged from decades ago. Chevron alone is under-taxed by a billion dollars!

Reforming the commercial property tax loophole in Prop 13 could bring in over $7 billion dollars annually, most of which would go directly to education. Despite new funding from Prop 30, our schools desperately need greater investments if we are going to provide a 21st century education for all of our children.

Prop 13 has long been viewed as the "third rail" of California politics. Talk about reforming it, and risk your political career. Yet recent polls show an openness from Californians to reform Prop 13 to ensure more regular value reassessment of commercial property. Demographic change, voter education and registration, and the victory of Prop 30, have shifted the political landscape.

The San Francisco School Board recently joined dozens of School Boards, City Councils, and Board of Supervisors across the state in calling for the reform of Prop 13 through a statewide ballot initiative in 2016 or sooner. The strategy, led by organizations like Evolve California and California Calls, is to ramp up the pressure from the ground up. Cities, schools, and communities are the canaries in the mine. We have experienced Prop 13's carnage firsthand, and we cannot be silent.

Just as we did with Prop 30, Californians deserve a choice: fully fund education and essential services, or maintain a broken and inequitable tax system. We can't have both. Next time the stakes will be even higher, so it's critical that we start preparing for this fight now. Let's get to work.

 

Comments

And since CA already ahs the highest income, sales and capital gains tax rates in the nation, it certainly does not have a revenue problem. Only a spending problem.

BTW, even with Prop13, property tax revenues have risen by an average of over 7% a year since it was introduced - far more than inflation.

We cannot trust the government with more of our hard-earned money, and we cannot touch Prop 13.

Posted by Guest on Nov. 19, 2013 @ 5:05 pm

It could have been double or triple what it is now!! Homeowners would be paying 10% property taxes (meaning the average homeowner in San Francisco would be paying nearly $80,000 a year in property taxes to the city) and all state workers would be guaranteed a starting wage of $250,000 a year with full retirement benefits guaranteed after 6 months of employment.

Sounds like a dream!!!

Posted by The Goebblin Love Child of Smaug on Nov. 19, 2013 @ 5:20 pm

property tax take from one year to the next.

That's right - 100% annual increases.

That's why the people revolted. Without Prop13, we'd have a spending nightmate because there would be no restraint. Buildings are the one thing you cannot move out of state to avoid tax, and no politician can resist a sitting duck.

Prop 13 is essential.

Posted by Guest on Nov. 19, 2013 @ 5:25 pm

Between 1975-1978 coastal California experienced an average annual property tax increase (owing to both rapidly increasing property values and inflating property tax rates) of between 150% and 200%. Lawmakers ignored their pleas for property tax relief, despite the state budget experiencing massive surpluses, so they got Prop 13 as a result. People were being forced to sell their homes to pay their taxes - it was an untenable situation.

Leftists never see a problem which more money can't ameliorate. Rightists never see a problem which less taxes can't ameliorate. They're both wrong.

Posted by The Goebblin Love Child of Smaug on Nov. 19, 2013 @ 5:47 pm

prefer keeping more money in my pocket and less in theirs.

Posted by Guest on Nov. 19, 2013 @ 6:11 pm

and then try and take it over and screw the rest of us.

There are many commonalities between the weird right and left.

Posted by Matlock on Nov. 19, 2013 @ 6:15 pm

The left on economic matters and the right on social matters.

What we really want is less government meddling in everything, be it markets or gay marriage. And that can start with giving them less money to squander.

Posted by Guest on Nov. 19, 2013 @ 6:24 pm

the progressives are always bitching about the government fucking things up, and yet they want to give this government more money and power over the common slob.

You can't trust the individual cops to write sit lie tickets, but we can trust the state and county to not fuck over the citizens.

What escapes our progressobots is that commercial leases have pass through costs. Drive up property taxes and the people paying often times won't be the evil rich, but small business.

Posted by Matlock on Nov. 19, 2013 @ 6:03 pm

They simply trickle down and fuel inflation.

If we didn't tax corporations at all, we'd be no worse off.

Posted by Guest on Nov. 19, 2013 @ 6:13 pm

Reforming Prop. 13 is a challenge mostly because of the mis information about there.

For example, the idea that because CA has high taxes in other categories, that means we have enough money. We have high sales and income taxes *because* of Prop. 13. Before Prop. 13 that wasn't true. Non-spin information about CA's overall tax burden is widely available.

The real misleading talking point is this thing about gross property tax revenues going up. When a farm field in Stockton is paved over and turned into subdivisions, property taxes go up. As so do the expenses, like police, fire, water, sewer, education, etc. that go with those new homes.

The fact is Prop. 13 is a giveaway to commercial real estate interests. It's as bad for homeowners as it is for renters. This isn't a secret - Jarvis was very open about it when he, as a commercial real estate lobbyist, wrote Prop. 13.

Jarvis wrote in a letter to commercial real estate investors that "we are the biggest losers" if Prop. 13 fails.

Posted by Guest on Nov. 20, 2013 @ 8:45 am

But if your point is really that CA sales and income taxes are only high because of Prop13, then how about this?

Relax the Prop13 limits in return for lower sales and income tac? Deal?

Oh, and much of that 7% annual increase under Prop13 comes from homes being sold, which resets the property tax basis. Since most homeowners move every seven years or so, that's free money for the State without any increase in costs.

Posted by Guest on Nov. 20, 2013 @ 9:06 am

I'm not sure where the 7% number comes from. The OP just cited it.

When property taxes are reset to current market values that's *not* "free money for the state." Costs for police, fire, schools, sewer, streets, and all the other things we need go up every year. When property taxes are frozen for years or decades, and then resent to a normal rate, that's not "free money."

If you talk to those new homeowners, you'll learn they realize they are subsidizing their neighbor's absurdly low property tax rates, and getting poor services in return.

The fact that Prop. 13 is just as bad for homeowners as anybody is is made really clear to new homeowners. That's going to make things harder for the drown-government-in-a-bathtub crowd.

Posted by Guest on Nov. 20, 2013 @ 12:36 pm

high because of Prop13, then the state does not have less money. It just gets that money from a different mix of taxes. There are other states that have no income tax, like Texas, or no sales tax, like Oregon.

The 7% figures is the average annualized increase in property tax that CA has gotten since Prop13 was passed in 1968. since it compounds, that is a doubling every seven years. In the 35 years of Prop13, property tax receipts are now at FIVE TIMES the level of 1978. The state has plenty of money.

Posted by Guest on Nov. 20, 2013 @ 1:00 pm

I'd happily trade Prop. 13 for lower sales and income taxes. Sales taxes are regressive.

Posted by Guest on Nov. 20, 2013 @ 9:58 am

the state would lower any tax?

Posted by Guest on Nov. 20, 2013 @ 10:10 am

But CA never would. The only case a little like that was when Arnie reduced vehicle taxes. I believe that has now be reversed.

Politicians always take. Ironic that Reagan's legacy didn't take hold in his home state.

Posted by Guest on Nov. 20, 2013 @ 10:28 am

taxes on wealth, which is effectively what property taxes are.

I have a choice about spending money, but not on earning it or having it.

A VAT replacing both sales and income taxes could work.

Posted by Guest on Nov. 20, 2013 @ 10:11 am

stop there, but rather it will be a slippery slope to property taxes on homeowners rising to 3% or 4% of property value, like in TX, NJ and ME.

Posted by Guest on Nov. 19, 2013 @ 5:27 pm

It will never trickle down to the common schmuck.

Attempting to frame tax code in what we as citizens will get out of a more bloated and useless government is something only the goofy left falls for these days.

Give them more and it will just line the pockets of the new class, the average citizen won't see an improvement in anything.

The left's strawman that people hate taxes because they dream of a being rich is tired, do progressive dream of getting a new class government job?

Posted by Matlock on Nov. 19, 2013 @ 5:56 pm

else sops runaway government spending. no politician can be trusted to not spend more, so all we can do is give him less. And even then he just borrows more.

Posted by Guest on Nov. 19, 2013 @ 6:12 pm

the California budget keeps going up up up beyond any measure, and the costs of a college education out paces that even.

There is no way that the average schmuck would benefit from more taxes, the single party state that is California is too owned.

Posted by Matlock on Nov. 19, 2013 @ 7:43 pm

Hopefully they will get their veto power back next year.

Posted by Guest on Nov. 19, 2013 @ 7:55 pm

Haney's another SFUSD honey trying to build a political career via the school board.

It worked for John Boehner and it can work for Haney!

"The handey man can!" -Sammy Davis Jr.

Posted by Guest on Nov. 29, 2013 @ 8:22 pm

Post new comment

The content of this field is kept private and will not be shown publicly.