As I wrote earlier this year, attacks against Proposition 13 remain alive and well as liberal groups have launched an initiative to roll back its protections for commercial properties. Ever since it was first approved by voters in 1978, it has been under siege. Fortunately for all of us taxpayers, it has survived the test of time even in California’s fractious politics. For progressives who are eager to expand the role of government and find sources of revenue to support their ambitions, it makes an attractive target despite remaining overwhelmingly popular with voters.
As we near the 40th anniversary of what remains the only true protection for California taxpayers, I was recently contacted by an Arroyo Grande resident with a series of “facts” about Prop 13’s role in the current problems facing our state. The issues he raised deserve to be addressed because they are many of the same arguments that have been brought against Prop 13 for the last four decades.
▪ Prop 13 forced homeowners (especially new home owners) to assume the lion’s share of property taxes over commercial properties.
The non-partisan Legislative Analyst’s Office (LAO) has examined this claim and refuted it. Homeowners paid approximately 34 percent of all property taxes in 1979 and in 2015 they account for 37 percent. The LAO furthered explained that this slight increase was not because of Prop 13 but instead was partially caused by the faster growth of new residential properties in proportion to commercial properties.
▪ It should have never been on the ballot because it violated the state’s constitution on initiatives only covering one subject.
The California Supreme Court put this argument down long ago with the case Amador Valley Joint High School District v. State Board of Equalization. During this landmark case, the court rejected a number of challenges against Prop 13, including the allegation that it violated the single-subject rule for propositions.
▪ It was approved by less than 25 percent of all registered California voters, which is a margin significantly less than the new two-thirds majority it required for future local funding issues.
This is a ludicrous argument. Prop 13 won with 64 percent of the vote. By this logic, no constitutional amendments should be allowed unless it receives two-thirds support from all registered voters — not just those who turn out to the polls. Perhaps we should consider a new law that would not allow a state legislator to take office unless over half of voters in their district bother to show up to vote. Many legislative districts around the state have as low as 30 percent voter turnout. Furthermore, prior to the top-two primary system, as few as 10 percent of voters would select the winning candidate in the primary election in seats dominated by a single political party. The bottom line is that voter turnout in elections have consequences, and if Prop 13 was such a bad initiative, voters should have shown up to oppose it.
▪ It has destroyed the ability of local governments to manage their own finances.
Blaming this solely on Prop 13 is not accurate either. Proposition 98 — which guaranteed that nearly half of all state tax dollars must be dedicated to K-12 education — arguably did far more to tie the hands of local governments and state government. The LAO also found that since Prop 13, local governments have replaced much of this revenue with local sales taxes and other revenue sources that can be approved by local voters. This means citizens in a community still can make choices about what levels of services they want and approve the taxes needed to pay for them.
▪ It created a property tax system that favors corporate real estate over homeowners and it guaranteed an ever-increasing property tax cut for corporate property owners due its provisions that only allow a property to be reassessed when it changes ownership.
Both homeowners and commercial real estate owners enjoy the exact same protections under Prop 13. While some companies have gotten creative at avoiding the trigger of a change of ownership in order to prevent the property from being reassessed, that is a problem that needs to be fixed by the Legislature. In fact, Howard Jarvis Taxpayers Association supported a bill in 2014 to fix this loophole, only to see it killed by Sacramento Democrats.
The bottom line is that Prop 13 is truly the last protection for Californians from skyrocketing taxes. Just last year alone, the Democrat-controlled Legislature approved nearly $6 billion in new taxes despite a growing economy and low unemployment.
Despite all of the criticism and attacks it has received, 61 percent of voters still think it was a good thing. Nearly 40 years after it first passed, it’s one of the few parts of the California dream that endures.
Conservative columnist Andrea Seastrand is a former representative for the 22nd Congressional District, a longtime grass-roots activist and current president of the Central Coast Taxpayers Association. Her column runs in The Tribune every other Sunday, in rotation with liberal columnists.