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California’s Folly — Prop. 13

Posted on Jan 26, 2010
AP / Rich Pedroncelli

By Arthur Blaustein

In November 1978, Harper’s magazine published my article on the passage of Proposition 13 with the headline, “Californians Rush for Fool’s Gold.”

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At that time, Prop. 13 was getting lots of national media attention. The pundits of type and tube were hyping California as the pacesetter for a post-Watergate America. At the same time, the cultural gurus were proclaiming it to be a proving ground for paradise.

Even George F. Will, the usually cautious Washington Post columnist, declared: “The East Coast, landfall for immigrants of all sorts, once was the laboratory of American politics. Today California, land’s end for migrants of all sorts, is the laboratory.”

Birthplace of the “less is more” philosophy, the Golden State had become both the cultural fad-fashioner of the nation and a dominant political force. What did this imply for the nation politically? Many observers referred to California’s trendiness as a hopeful sign of America’s greening.

While reflecting upon the “have a nice day” patter of the pundits who were heaping praise on Prop. 13, I recalled something that Albert Einstein had said: “There are only two things in this world that I’m fairly sure about. That E=mc2, and man’s capacity for folly. And I’m not that certain about the first.”

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Indeed, Prop. 13 was to become California’s Folly.

I thought then, and am firmly convinced now, that the key elements in the proposition—the taxation formula and the two-thirds legislative requirement—would be responsible for causing a fiscal and social disaster. These two requirements have in time helped to lead the state into financial bankruptcy and created a dysfunctional state government. And the social consequences that I predicted then and which are all too apparent now are a race to the bottom in education (from K through our highly esteemed university system); public health; social services; public safety; arts, libraries and culture; and infrastructure development; as well as crippling the ability of local governments to provide basic amenities.

In one way or another, almost everyone will pay a price; but the middle class, the working class and the poor—those who are dependent on public services—will be hurt the most because of cutbacks.

What I did not anticipate is that the financial squeeze would be exacerbated by a rigid and myopic band of ideologically reactionary Republicans in the state Senate who seem uniformly opposed to common sense and the public good. The problems were compounded by the recall of a governor, Gray Davis, who tried to ameliorate the deficit with a fair tax on auto registration. And he was replaced by a governor, Arnold Schwarzenegger, who has neither the will nor the stomach to deal with the terminal negativity of his own party in the Legislature.

So, instead of the greening of America, we got the greeding of America for three decades, fueled by the media hoopla over Prop. 13 and exemplified by the national policies of Ronald Reagan and George W. Bush.

Finally, as we head into a year of campaigning for the governorship and the Legislature, it is my fervent hope that the California electorate will have learned its lesson and will elect leaders who have the courage to restore equity and fairness to the state’s economic and social policies.

A healthy beginning would be to amend Prop. 13 by removing its protections for commercial property while retaining the benefits for homeowners, as well as passing a straightforward referendum that simply states: “All legislation actions based on revenue and budget shall be determined by majority rule.”

Now is the time to face reality and right the wrongs of the past. We cannot afford to live with — or pass on to our children and grandchildren — the painful consequences of 30 years of regressive policies and government by provisional catastrophe.


Excerpt from Harper’s magazine, November 1978:

... The reactionary dream of George Wallace and Ronald Reagan, repudiated by the nation at large in 1968 and again in 1976, has come to pass in California under the rubric of “a people’s tax revolt.” Four months after the passage of Proposition 13 by an enthusiastic majority in that benighted state, politicians elsewhere in the country have declared themselves in possession of a new revelation. In primary and election campaigns this fall, they have been saying that big government needs to be reduced, and they advertise themselves as courageous representatives of an electorate righteously aroused.

Before the rest of the nation joins the headlong rush to the sea, the fine print in Proposition 13 deserves a slightly more careful examination than has been provided by the wise men of the doting media.

A number of states have adopted the initiative and referendum process, but none has used it so often as California. The initiative has not proved to be a very sound means of enacting legislation. Initiatives are typically reflexive, emotional reactions to an issue, poor substitutes for the hearings, debates, compromises, and deliberations that distinguish the legislative process. And so with Proposition 13.

A disarmingly simple initiative of 389 words, it limits the taxes levied on any piece of real property—houses, apartments, factories, and businesses — and makes the limitation binding on the state Legislature as an amendment to the Constitution.


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By Marvin, May 13, 2010 at 8:42 pm Link to this comment
(Unregistered commenter)

Please look at the state’s spending. We fund crap! The people of this state should demand better from their elected offical. Stop blaming a thirty year old law. The cry babies of this state need to look in the mirror to see what is wrong with the state of California. Gov. Gray Davis had a surplus when taking office. What happened? Stop telling everboby the problems. Start looking for the solutions.

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By TurboDog51, January 28, 2010 at 3:53 pm Link to this comment

Re: Davis ... “The problems were compounded by the recall of a governor, Gray Davis, who tried to ameliorate the deficit with a fair tax on auto registration.” Let’s not forget Davis was no godsend.

“In Sacramento, since the enormously destructive 1999 decision of the Legislature and Gov. Gray Davis to give a 50 percent retroactive pension increase to state employees, the cost to taxpayers of funding these pensions has increased 2,000 percent. Meanwhile, from 1997 to 2007, the number of full-time state-paid workers rose 24 percent.”

—San Diego Union Tribune

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By tropicgirl, January 28, 2010 at 11:43 am Link to this comment
(Unregistered commenter)

Apparently California has plenty of money to spread around, for politics, and
plenty of inappropriate development, and other wasteful projects. Prop 13 did
not do ENOUGH to stop that.

This is where your state public school money is going in California… And don’t
try to tell me its a separate budget or that its from private donations (who get
reimbursed by taxpayer dollars anyway).

One thing we all know by now is that the taxpayer is the only one with real
money.

All need to get real… Californians know this which is why there is no rush to go
back on the initiative or the initiative process.

Obama’s top contributors to his 2008 Presidential campaign:

University of California   $1,591,395
Goldman Sachs   $994,795
Harvard University   $854,747
Microsoft Corp   $833,617
Google Inc   $803,436
Citigroup Inc   $701,290
JPMorgan Chase & Co   $695,132
Time Warner   $590,084
Sidley Austin LLP   $588,598
Stanford University   $586,557
National Amusements Inc   $551,683
UBS AG   $543,219
Wilmerhale Llp   $542,618
Skadden, Arps et al   $530,839
IBM Corp   $528,822
Columbia University   $528,302
Morgan Stanley   $514,881
General Electric   $499,130
US Government   $494,820
Latham & Watkins   $493,835

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By cmarcusparr, January 28, 2010 at 10:00 am Link to this comment

Stick a fork in California…I think it’s done.

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By vonbargen, January 28, 2010 at 9:34 am Link to this comment

It is amazing to read all the comments and discover that 32 years later there is no more comprehension of what it was all about than there was at the time it became part of California’s Constitution.  Like the three blind men with the elephant, each comment focuses on one aspect of the problem and ignores the rest.  Many of the anecdotal comments are the same ones that were promulgated by Jarvis and Gann in 1978.  They are just that - isolated anecdotes.
The reader who thinks we spend more on education per pupil than most other states is dead wrong, by the way.

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By mlb, January 28, 2010 at 8:02 am Link to this comment

Just for the record, I believe what Einstein actually said was:

  “Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”

Pretty ironic misquote there, professor Blaustein!

Blaustein also skews the argument in his favor a bit by leaving out the fact that a large majority of states are now facing very serious fiscal problems.  They didn’t all pass equivalents to Prop 13.  Wall St. has re-engineered our economy to fatten their own wallets everyone else’s expense, including state governments’, so revenues have fallen.

Reading through the comments and considering what I’ve heard previously, it seems clear that California voters had legitimate gripes but were not careful enough about the language of the proposition or the ramifications it would have. 

So beware the dangers of direct democracy!  One reason to have a republic is that we can elect representatives who who have more skill than most of us at understanding the wording of legislation, what the loopholes are, and what its other implications might be.

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By TurboDog51, January 27, 2010 at 11:36 pm Link to this comment
(Unregistered commenter)

A 2007 report estimated that illegal aliens in California received somewhere between $9.6 and $38.2 billion more in state services than they paid in state taxes.

Hundreds of thousands of Americans who are neither racist nor hateful (and who can engage in civilized dialogue) object to unchecked illegal immigration because (1) it’s illegal, (2) it’s a drain on the economy and (3) it’s unsustainable. A sustainable population for the U.S., some have posited, is closer to 150 million, less than half of our current population.

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By TurboDog51, January 27, 2010 at 11:29 pm Link to this comment
(Unregistered commenter)

Re: MrFreeze’s post ... In the Pete Wilson administration, a study prepared by Philip J. Romero for the California Governor’s office found that illegal immigrants and their U.S.-born children received about $3.6 billion more in state services than they paid in taxes.

The 1994 study was followed up in 1997 with the Jordan Commission’s study of California conducted by the National Research Council. In looking at California’s budget, the study found that there was “a net fiscal transfer to the average immigrant-headed household of $3,463” and that the “net fiscal burden on native households in California is families from Latin America.”

In 2007, Romero updated his earlier work and estimated that illegal aliens in California now receive somewhere between $9.6 and $38.2 billion more in state services than they pay in state taxes.

There are hundreds of thousands of Americans who are neither racist nor hateful who want to see illegal immigration stopped, because it is a drain on the economy. In addition, unchecked immigration is not sustainable. The United States is overpopulated, some say by as many as 150 million.

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By Mike Walsh, January 27, 2010 at 10:16 pm Link to this comment
(Unregistered commenter)

One question:  When will there be another re-call election?

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By coast contact, January 27, 2010 at 6:51 pm Link to this comment

California’s Folly was not Prop. 13.  That initiative was voted into law long over 30 years ago.  The state’s problems lay in a law that requires a two thirds majority to pass a state budget, the high cost of pensions, the legislature’s abdication of its responsibility to pass laws by putting initiatives on the ballet for all critical issues, and the explosion of committees and boards of ex -legislatures at $100,000 plus salaries and their non-performing staffs.

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By Curtis, January 27, 2010 at 4:24 pm Link to this comment
(Unregistered commenter)

Proposition 13 was a mandate by the people of California to take control of spending in the State.  That didn’t happen.  Look around bozo’s…you spend money supporting (giving money) to people that have never paid ten cents into your system.  How in hell do you think it will recover if you continue to put more into social programs that do nothing for your state.  Wake up and smell the tortillas.

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By Hulk2008, January 27, 2010 at 3:54 pm Link to this comment

The wealthy and the inept get elected to public office.  Why?  Because the informed electorate is generally apathetic and satisfied to “let the other guy mess with the details”.  The rest of the electorate has difficulty spelling K-A-T. 
  Any law that can garner 2/3 approval is either so obvious and acceptable that it doesn’t need to be a law, or it benefits the elected officials.
  Laws and government are all about the tough stuff - the things almost NObody agrees about.  Example:  Republicans say health insurance would be cheap if people could buy it across state lines; they don’t mention the problems of having 50 different sets of health insurance regulations.
Example 2: Education reformers say all students should be measured by standard national tests and teachers should be evaluated by sutdent performance on those tests; no mention of the fact that NONE of the 50 states can agree on what a national standard would be. 

Representative government is a great idea.  Too bad it doesn’t work very well. 

(The representatives only want to represent their own interests; and the governed reject all efforts to be governed by others.)

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By John, January 27, 2010 at 1:06 pm Link to this comment
(Unregistered commenter)

All very interesting and yes, Prop 13 had horrific impact.  The negative impact on our once magnificent educational system being the most relevant today in a state where about 50% of the population are functionally illiterate.

But this article misses the entire populist drive behind Prop 13.  Here is the dynamic: If you purchased a home at $100K (presume cash and no mortgage) and then retired on a fixed income subsequent tax increases would make you homeless in old age.  As property values became absurdly inflated in this state the taxes on that $100K home were not geared to your purchase price but the fair market value.  So when speculators drove up (inflated) property values you were taxed not on the $100K you paid but the $500K inflated value.  Since many people could not afford to keep up with these inflated tax rates many elderly people on modest fixed incomes became homeless due to taxes, taxes, taxes. 

Even those who did not loose their homes suffered severe hardship.  Many people were forced to sell their homes because they could not pay those tax increases and what could they do with that money?  Go buy a much smaller home of lesser (inflated) value (presuming they could even find one) and then the same thing would happen again.  There was simply no security for the elderly homeowner on a fixed income.  The speculators drove up the market value and the taxes increased again and again elderly people on fixed incomes suffered horrific consequences.  Prop 13, for all the damage it caused, DID keep elderly people on fixed incomes from losing their homes to the tax collector.

So it clearly was a taxpayer revolt.  Speculation and increased inflated property values were allowing the state to screw the hell out of elderly fixed income home owners.  It’s oh so easy to write a critique like this when you have the luxury of ignoring the entire populist basis for the law in question.  I agree with the fact that the consequences were horrid but please have the intellectual integrity to first address that problem.  Only a person entirely disingenuous about their advantages could have written and article like this while ignoring the underlying issue.

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By alturn, January 27, 2010 at 12:20 pm Link to this comment

Proposition 13 is not the first or easiest problem to solve.  The one that does not take a super majority to pass is abolishing redevelopment. 

Redevelopment was supposed to be used to revitalize ghettos.  Instead it is used as a tool to steal public land, provide massive transfer of wealth to the rich - including sports team owners, and transfer the cost of providing basic government services away from wealthy communities. 

Take downtown San Diego.  When the redevelopment agency was set up, wealthy San Diegans saw that transforming this downtown which sits on prime coastal property could be enormously profitable for them.  When redevelopment was passed, it lead to commercial properties which were paying minimal property taxes (a parking lot on one city block that was paying $1800) having high rise condos built on them.  That may have been ok except most of the property taxes, around $1.5 million (300 units times $500,000 average sell price times .01 property tax), do not go to pay for public services.  That is because 80%, or $1,200,000 in this sample case, goes into a perpetual kitty for funding developers. The $300,000 of new property taxes that actually goes to pay for public services, on 300 units, comes out to $1,000 per year, or about what a condo of that quality would have paid in property taxes in the 1970s.  Meanwhile, everybody else subsidizes the the current cost of providing police, fire, health workers, teachers, and other government services to these residents. 

Another example is Naval Training Center.  This was 280 acres of public land with 2.75 million square feet of well-maintained public buildings sitting on prime coastal property.  The land was given away for free, tens of millions in unaccountable state tax credits were given to the developer and relocating corporations, and the whole property was declared a redevelopment area.  Because there are no taxes on public land, 80 percent of all taxes now being paid - that 80 percent stated by the city of San Diego to come to over $5,000,000 per year - flows to developers.  Again, everybody else is hugely subsidizing the theft of property all citizens could have enjoyed in a public reuse. 

The redevelopment scam is why wealthy communities like Coronado and La Quinta became redevelopment areas.  Or why the new Los Angeles pro football stadium is to be largely refinanced by redevelopment funds.  Why have your taxes help regular people when instead their taxes can help subsidize the lifestyle of the rich?

Before redoing proposition 13, which for commercial property certainly needs redoing, scams such as redevelopment which is draining billions from the state and particularly k-12 school budgets need to be shut down. 

Then get rid of the lavishly paid boards and commissions positions where cronies and lobbyists find refuge. Both these acts can be done by a simple majority of the legislature.

When graft such as this has been tackled by elected officials, we will know that the current crisis is serious serious enough to be worthy of our collective sacrifice.

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By Kate, January 27, 2010 at 11:55 am Link to this comment
(Unregistered commenter)

Also, please look at the California Budget History, especially from 2000/2001 to the current date:

http://www.sen.ca.gov/budget/BudgetHistoryJan2009.pdf

“Getting educated” about the “fiasco” requires a lot more than a scapegoating, finger-pointing exercise.

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By Kate, January 27, 2010 at 11:40 am Link to this comment
(Unregistered commenter)

Proposition 13 is not ruining the schools. California spends plenty of money on education, compared with states who have much more functional school systems. It is simplistic and “data-free” thinking that leads one to conclude that money equals high test scores. Please take time to read the comparative educational data on the following site:

http://www.ed-data.k12.ca.us/Articles/article.asp?title=California comparison

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By seriousfun, January 27, 2010 at 11:27 am Link to this comment

Gray Davis, who tried to ameliorate the deficit with a fair tax on auto registration - wrong! Republican Gov. Pete Wilson is responsible for this. He signed the law with the sunset clause that removed the VLF Offset (look it up if you don’t know) if the enonomy wouldn’t support it - this happened under Davis’ watch, and the legislature did nothing to change it, and we got the Governator in return. We citizens of CA lost.

WillowWind—- give me one example of a grandma who was out in the street because of high property taxes pre-Prop 13. You can’t. It’s these apocryphal stories, mistaken beliefs and outright lies that gave an ignorant chalatan like Howard Jarvis the opening to hoodwink CA voters to the benefit of wealthy and powerful interests. These wealthy and powerful have consolidated their wealth in the years since Prop 13 - simply check the facts.

BigJess - yes, Prop 13 did provide some stability, but a state’s economy is DYNAMIC. Revenues need to follow, to some extent, the ups and downs of economic life. Prop 13 prevents CA from balancing its budget, pure and simple.

Prop 13 was nothing less than a Sacramento power grab. Taking the revenues necessary to support the best educational system in America and many other exceptional programs, the state government overnight became the provider of local education, etc., and look what has happened.

Local governments kicked out manufacturing and other jobs in favor of Big Box stores so the locals could carve out a little revenue from their share of the sales taxes.

Working and Middle Class people lost the ability to buy homes in the towns where they grew up, leading the way for trust fund kids to build McMansions where reasonable, affordable houses once stood. Only the upper-middle and wealthy could afford the reset property taxes and inflated prices.

A reasonable reality-based adjustment and cap on property taxes, applied to home and commercial properties alike, would have gone further than Prop 13 to provide stability and protect homeowners, yet hysteria reigned and proto-teabaggers won the day.

How can anyone look at California’s current economic state and not come to the same conclusion as Blaustein?

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By vonbargen, January 27, 2010 at 11:25 am Link to this comment

Big Jess is tilting at windmills and trying to deflect our attention onto other problems.  He is also nitpicking about the provisions of Prop. 13 that have been the most damaging.  It is not the only cause of our problems but it has made it harder to fix them.

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By vonbargen, January 27, 2010 at 11:12 am Link to this comment

The pundits were right in 1978.  We do lead the way but in this case it took awhile The idiocy of Prop.13 (2/3 majority for tax increase)  has contributed to paralysis in Sacramento. It is now mirrored in the idiocy in the Senate, with the need for a 60+ majority to pass any meaningful legislation. Anyone who doesn’t recognize this part of Prop 13 as a major stumbling block in Calif. is blind or ignorant.
Prop. 13 helped a lot of old folks stay in their homes, but the jump in tax which occurs after the house is sold has kept thousands of young families in crowded apartments or faraway suburbs for decades.

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By Harold, January 27, 2010 at 11:11 am Link to this comment
(Unregistered commenter)

The definition of a regressive tax is: “A tax that takes a larger percentage of the income of low-income people than of high-income people.”

In a civil society, one’s primary residence should not be taxed out from under them. If I am rich, and I buy a 2 million dollar home, I will be taxed heavily. But if I am average, and bought at a price I could afford over the life of my home ownership, I should not be taxed on other people’s speculative inflation of my home’s worth.

There is no more “regressive” process than taxing personal residences at “what the market will bear” rather than “what was paid.” Private property—even ridiculous McMansions—need to be viewed as “homes,” not “houses.”

Prop 13 has been abused by corporations, and that problem can be ameliorated in other areas of corporate tax law.

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By tropicgirl, January 27, 2010 at 11:05 am Link to this comment
(Unregistered commenter)

Prop 13 will be repealed over the dead bodies of Californians. As a former
resident, I can tell you that, although not perfect, it is the face of what is to
come actually in citizens fighting back.

California has a obscene prison population, with billions going to private
companies. California hands out money to other private corporations,
“educational” biotech, science, technology firms all have their hand in it like
candy. If it were not for Prop 13 California would be New Jersey on steroids.

South Florida recently passed a huge bond, a so-called pledge for the future,
marketed as a help to coastal, historic and other preservation. 80% has yet to
be accomplished, six years later. There is no accountability here, either.

There is just no accountability anywhere in local government anymore.
California would become a cash cow for every corporate crook that already
lives there. It needs to strip its budget and get out of people’s lives. Give it
more taxpayer money and see the hole in the ground open even wider. It will
disappear. Even money for education. It disappears at the high levels every
time. I have seen it.

Yes, California is the snapshot of the future, of citizen anger and the power of
the local initiative. The sound of agony you hear is the whine of the big leeches
who can’t, at least not yet, steal California’s future. Sounds good to me.

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By Kathy Sullivan, January 27, 2010 at 10:21 am Link to this comment
(Unregistered commenter)

I received one of the last good educations in California.  Education use to be
important to Californians.  That was before the lure of Prop. 13.  The elite don’t
want the young educated these days because then they can think for themselves. 
Better to keep them dumb as rocks.  Everywhere throughout the union, education
is the first to be cut. If you can’t afford private school, then you are at the mercy
of the confused and illiterate mobs.  Good luck with Californians getting rid of
Prop. 13; it’s not going to happen anytime soon.

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By Lou Ann Roth, January 27, 2010 at 9:40 am Link to this comment
(Unregistered commenter)

This is generational. If the 20-40 year olds in CA wonder why they cannot afford to buy a decent house or condo, they may become educated about this fiasco. If they wonder why their schools are not fit for their children, they may become educated about Prop 13. For all the squawkers about property tax volatility, do like they do in MA, adjust the rates up or down to allow for value fluctuation. Highest property taxes? TX and NH—no state income taxes there. Try $3600 a year for a $125K house in Austin TX. Yikes.

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By msgmi, January 27, 2010 at 9:37 am Link to this comment
(Unregistered commenter)

In order to create a band aide fiscal recovery, the “Terminator” could endourse legislation to legalize double-digit casino enterprises throughout the state and as Pennsylvania has done, create a revenue generating cash cow (11 casinos) at the expense of creating another social addiction to the ones that already exist. Roulez les bonnes temps as Wall Street does.

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By eggroll, January 27, 2010 at 1:40 am Link to this comment

Jarvis’ genius was to get enough of the people who
actually vote to make a pact to fob costs off onto
future California. And I mean keep fobbing, not just a one-time fob. My mom, for example, whose house was grandfathered in under Prop. 13, pays about one-fifth the property tax of her next door neighbor, who lives in an identical-size house on an identical-size lot. Now that’s a deal that the winners in this deal love! She voted against Prop. 13, but has understandably low enthusiasm for getting rid of it.

Unlike bonds, which literally are an obligation to make good in the future, Prop. 13 was a big fuck-you to California’s future. Now the future has
arrived, and it says “Fuck you, Jarvis, and all the people who supported you.”

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By JustBobF, January 26, 2010 at 11:16 pm Link to this comment

I totally agree with this article. My parents made a bad mistake if they voted for
Prop. 13.

We pay very little property taxes. Our new neighbors pay a lot. If we sold and had
to buy again, we would be hit hard. All around, it is not fair.

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By Virginia777, January 26, 2010 at 9:59 pm Link to this comment

Without a doubt, the biggest loser in the Proposition 13 debacle, has been public education (and therefore, children). 32 freaking years of this Hell?

Time for reform, time for change!!

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By Kate, January 26, 2010 at 9:52 pm Link to this comment
(Unregistered commenter)

I encourage everyone to read the sensible, factual post by “Big Jess.”

Of course the corporate loophole should not be allowed to exist, but be careful: Fussing with the Corporate loophole will likely cause the entire law to be dismantled. Removing the homeowner benefit of Prop 13 would cause tremendous hardship, and it would cause many lifelong residents, who have paid California property taxes for years, to lose their homes.

The argument that Prop 13 is the cause of California’s problems is just inaccurate.

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By Big Jess, January 26, 2010 at 3:44 pm Link to this comment
(Unregistered commenter)

First, Prop 13 does not cap property taxes. It puts your base at 1% of the purchase price and then goes up 2% a year after that. Also, Prop 13 only applies to the base tax rate; it does NOT include assessments (almost universally voter-approved) for special districts and bond issues such as the type used for school improvements, flood control projects, open space/parkland/coastal area acquisition and protection, firefighting districts, etc. On average in L.A. County a homeowner can figure that these extras add around an additional 20-25% to the property tax bill.

Second, Prop 13 actually adds stability to government revenues. Even the L.A. County Tax Assessor admitted in an L.A. Times article in 2008 that Prop 13’s consistent 2% annual increase provides a floor against property tax revenues falling too far during an economic downturn.

Third, Even after the decline in real estate value from its peak a few years ago, many homes are worth 2.5 times their original purchase price. Therefore they must have been worth at least 3 times their original purchase price for much of this past decade. Most people can’t afford to have their property taxes go up 250-300% in just a few short years. And don’t forget, those “above the line” add-on fees to the property tax bill are based on per $100 of assessed valuation. Base property tax valuation goes up 300%, those add-ons go up 300% as well. If speculators and mortgage profiteers and banksters create a huge bubble, without Prop 13, during the bubble you’d pay inflated taxes, and you don’t get that money back when the bubble bursts.

Fourth, all Prop 13 did was impose a “means test” on property taxes. You can afford a million dollar home, you can afford the property taxes on a million dollar home. That doesn’t mean that your neighbor can, or should pay at the same tax rate. In lots of communities, without Prop 13 the bulk of the property tax assessment would be on the LAND value of the property, not its value as a residence. My mother’s 860 square foot house (the house itself) is worth about $30,000. The land under it is worth north of $750,000, because that’s what a developer would pay to scrape it off and build a McMansion, just like the 3,000 square foot, $1.85 million place next door. Counting the add-on assessment fees, the property taxes on that McMansion come to over $24,000 a year. My mother’s SS and her pension combined only amount to $21,600. So my mother should be taxed out of the home she and my father worked all their lives to own?

Fifth, this is not about government revenues, it’s about government over-spending. Look up California’s unfunded liability for public employee pensions. Latest estimate: $110 bil in the red. Inferior education? Try cutting administration. LA Unified School District has three non-teaching employees for every TEACHER. The L.A.Catholic Archdiocese has, on average, three non-teaching employees per SCHOOL.

Sixth, how come no talk about CA’s state income tax? The top tax bracket kicks in at $41,000. So if you make $41K or $41 mil, you pay at the same rate. Struggling middle class family, you’re in good company! You pay state income tax at the same rate as Spielberg, Kobe Bryant, and Steve Jobs.

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By antispin, January 26, 2010 at 12:37 pm Link to this comment

felicity,

Right, so Howard Jaundice sold us a nice new comfortable chair - on the Titanic.

http://www.latimes.com/business/la-fi-hiltzik13-2009jul13,0,6713365.column

“California’s property tax burden has gradually shifted to homeowners because commercial and industrial property doesn’t change hands as often as homes and the sales can be easily disguised.”

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By felicity, January 26, 2010 at 12:32 pm Link to this comment

WillowWind has it about right.  As a home owner when Prop 13 was passed, my property was assessed at the value it would be if I sold it. (That was like paying income tax based on your future, projected salary, not your actual salary - in other words paying income tax based on income you hadn’t received.) 

The change in property tax for home owners was the ‘goodie’ that got us behind the Prop. while the rest of the Prop. was yet another corporation etc. undeserved and unwarranted gift.  Sound familiar?

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By antispin, January 26, 2010 at 12:06 pm Link to this comment

WillowWind,

You are missing the big problem: corporate loopholes have meant they can pass on their properties to eachother without ever reassessing the value. 

http://www.closetheloophole.com/

I say get rid of the income tax on incomes less than $100k and fix the loophole.  Only banksters benefit from low property taxes.

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By WillowWiind, January 26, 2010 at 9:54 am Link to this comment

I’ve heard this all before and most of it is just bunk. The reason Prop 13 was passed in the first place was because property taxes were just getting ridiculous, to the point where people could no longer afford their houses.

Prop 13 has been around for a long time…long enough for the people who benefited the most to die off or move. Once you move from a home covered by Prop 13, the next owner, if not next of kin who inherited the property, would NOT be under the rule. Ergo, the next owner would not benefit from it. People in California move all the time (they also die and their kids sell the property, as well) so all this Prop 13 blame is garbage.

The real problem is the government is filled with incompetent jerks beholden to so many interests that do not include the citizens, that are filled with stupid ideologies, and are just basic morons, that couldn’t govern a shoebox. When are the citizens going to STOP voting in MOVIE STARS? Please.

They can’t get anything done because there isn’t anyone in power who is really interested in getting anything done. They don’t have the will or backbone or any drop of integrity or statesmanship. This poor state is run by mediocre losers.

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By mrfreeze, January 26, 2010 at 9:12 am Link to this comment

All one needs to do to understand the character and values of CA is to observe two things:

1) Go to Newport Beach and gaze upon the mega-million dollar properties for which the owners pay little in taxes.

2) Listen to the hateful and racist rhetoric of average Californians about the “illegals” who are blamed for everything wrong in the state (never, of course, hearing anyone acknowledge that all those illegals have made CA billions if not trillions of dollars over the years).

If California is, indeed, a snapshot of Americas future, we’re in big trouble.

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