Advertise Here

Deliver your message to thousands of readers every day.

Our readers are influential opinion makers - politicians, journalists and activists.

Our latest headlines

Attorney General Brown Announces Largest Predatory Lending Settlement in History: $8.68 Billion in Home Loans and Foreclosures Relief Nationally—Up to $3.5 Billion to Californians—From Countrywide Financial Corporation
Hannah-Beth Jackson Has the Goods on Tony Strickland in Pivotal California Senate Seat Race
Proposition 5: We Need to Fix the Drug Court System
Turning a Red California District Blue: Is the Third Time a Charm for Ferial Masry and the Sixth Seat for Democrats to Gain Two-Thirds in the Assembly?
The Heller Gun Decision Week 14 – The U.S. Senate Holds H.R. 6842 and California Holds SB 327
Cavala: Competitive Legislative Seats Do Not Produce “Moderate” Lawmakers
In California’s 5th Senate District Race Democrat Wolk Should Win

About Us

The California Progress Report is published by Frank D. Russo, a longtime observer of and participant in California politics.

About Frank Russo.
About California Progress Report.

Got a news tip? Want to write a guest column? Contact Frank here.

Books

The Truth About Prop 13

By Robert Cruickshank

The 30th anniversary of Prop 13 has brought out a raft of commentary in the state media. This commentary tends to split on whether Prop 13 benefited or hurt the state - as if there is still any doubt that it was a disaster - but it rarely examines some of the underlying assumptions of Prop 13, and even more rarely does it explore the deep inequality it has enshrined into our state.

Much of this stems from a fundamental misunderstanding about what Prop 13 was and what it did. Voters convinced themselves it was a populist revolt against rising property taxes. They believe this so fervently that they act as if they willed it into existence.

In fact Prop 13 was an extremist attack on the very practice of state government by a group of far-right activists, with property taxes used as a convenient cover. Those who voted for - and who say they would vote for it again - still seem to believe its primary purpose was to protect homeowners, when its true goal was to destroy public services by starving government of revenue - otherwise why include the 2/3 rule? Why give commercial property the same protection as homeowners?

Further, there seems to be widespread misunderstanding about the level of taxation - especially property taxation - in California. California ranks 38th in property taxes. Somehow homeowners in the 37 states ahead of us haven't been losing their homes to taxes. One consequence of Prop 13 was a shifting of taxation to sales and income taxes - sales taxes are regressive and income taxes can be volatile. Prop 13 is therefore directly responsible for California's regressive and unstable budgeting. No Prop 13, no structural revenue shortfall.

Dan Weintraub argued that Prop 13 didn't devastate government finances. But does he even read his own paper? Peter Schrag pointed out in the California Progress Report last week that Prop 13 did have that devastating impact:

“California's per pupil school spending, which was among the top 10 states in the 1960s, is now among the bottom 10. Proposition 13 alone is not responsible, but along with two major court decisions that preceded it, it helped decouple school funding from the local tax base and thus undercut voter incentives to fund education generously, as it had been in the generation after World War II. Our roads, once a national model, are an embarrassment. ...

“California once had a communitarian ethic. That's been turned into a market ethic. It once did serious planning for the future. For now, that's a nearly forgotten hope.”

Prop 13 helped create a "homeowner aristocracy" - where those who bought their homes before 1976 are given preferential treatment and tax shelters while everyone else has to pay market rates. Some argue that those on fixed incomes deserve protection from rising tax bills, but it is difficult to have sympathy for this when the method of protecting them - Prop 13 - has produced a generation of inequality that leaves most folks under 35 unable to ever own a home in California.

Why should some homeowners get government subsidies and others do not? Why is it that under Prop 13 we protect some homeowners at the expense of future generations? If we are to right the state's finances, provide economic security for all Californians, deal with the energy price and global warming crisis, and have a competitive 21st century economy, we need to reexamine our priorities, and be willing to move past obsolete 1970s faux populism.

Robert Cruickshank is a historian, activist, and teacher living in Monterey. He is a contributing editor at Calitics.com and works for the Courage Campaign, in addition to teaching political science at Monterey Peninsula College. Currently he is completing his Ph.D. dissertation in US history, on progressive politics in San Francisco in the 1960s and 1970s. A native Californian, he was raised in Orange County and educated at UC Berkeley.

Posted on June 10, 2008

Comments

You're the one who doesn't get it. Prop 13 allowed my mother to keep our house in the 80s when my father left and made my mother a single parent with 3 kids. Instead of paying the market tax rate of nearly 4xs the amount she was paying her prop 13 rate from 1973. Now a senior citizen she can afford to stay in the same house on a fixed income, if she had to pay the market rate it would raise her taxes 10xs!. I bought my own home in 2000 before the big run up, I truly could not pay triple the taxes on my home if it were reassessed today. Prop 13 allows families to budget and keep their homes that belong to them not as object you can tax at will. Prop 13 changed my mother's way of thinking, prior to that she had always voted as a Democrat since then she has always voted as a Republican. Home don't exist so you can tax them!

Posted by: sean at June 10, 2008 09:39 AM

Robert, regardless of whether or not your arguments against Prop 13 make any sense, your first sentence on your last paragraph identifies you as a socialist

"Why should some homeowners get government subsidies and others do not?"

I know this may be a weird concept to you, but not taking someone's money =/= giving someone money. The idea that a reduction in taxes means the government is subsidizing you, please spare me. Your argument relies on the idea that all money is government's money, and whatever they let people keep is a subsidy.

If you want to argue against Prop 13, fine, you may have a point. But don't equate lower taxes to subsidies.

Posted by: Ben at June 10, 2008 11:18 AM

Dear Ben:

But it IS a subsidy. You see it most clearly in its application to commercial properties. Business in California charge current prices for their goods and services. But benefits to the community provided by the public sector are stuck in valuations of past years. The cost of those public services, without which businesses could not operate, are prevented by the State Constitution from currently charging what they need to provide those services. That's a subsidy!

Posted by: Robert Warwick at June 10, 2008 06:26 PM

You mentioned 37 states ahead of California in taxation. How about telliing us what they offer the property owners for homeowner's exemptions and senior citizen caps on property taxes. California property owners are offered a $7,000 homeowners' exemption or its' 1% dollar equivalent of $70.00. Not a lot coompared to other states. One in particular, offers 50% or $50,000 which ever is less as a homeowner's exemption and a senior citizen cap on property taxes. Prop. 13 didn't get us into the mess the state is in. Look at lavish salaries, benefits and retirement benefits given to the bureaurats (employees), titled as professionals obtained through union negotiations. Would you be happy if every citizen gave 90% of their earnings so the state elected representati ves could spend us into debt even more. Please excuse the typographical errors. The computer won't delete.

Posted by: j.c. kelly at June 10, 2008 08:47 PM

Dear Robert:

No it's not. Letting people/businesses keep money they earned can't be a subsidy. It's only a subsidy when they receive money.

If you want to argue for user fees, go ahead. If you want to argue that public services are subsidies for anyone who pays less for them than the proportion of their use of them, then public goods are subsidies for everyone except those who pay the most taxes

Posted by: Ben at June 10, 2008 08:50 PM

Get Email Updates

Want the California Progress Report by email? Once a week, we'll send you the latest and greatest headlines.

Stat tracker