The Tax Revolt is Over


Posted on 09 November 2012

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By Robert Cruickshank

Tuesday's vote to pass Prop 30 - by a larger margin than most observers expected - does more than just provide $6 billion of badly needed funding to the state's public schools. It brings to a close a 34-year long tax revolt that came very close to destroying California's middle class, locking its low income families into permanent poverty, and left the state on the edge of financial ruin. And while there is still a lot of work ahead to overturn the legal and constitutional legacies of the tax revolt, it no longer has political power. That in turn means the California Republican Party, and the California conservative movement, are as dead as Monty Python's parrot.

Yes on 30!

The tax revolt began in 1978 when conservatives mobilized suburban white voters against the public services that had created broadly shared prosperity in the postwar years. Extremist ideologues like Howard Jarvis wanted to destroy the California Dream that Pat Brown and others helped create. They played on the beliefs of many suburban whites that it wasn't legitimate to allow people of color to share in the California Dream. The use of property taxes to fund things like schools in poorer communities and anti-poverty programs offended many whites in the late 1970s. Republicans were already riding that backlash to political power. California Republicans added the innovation of throwing anger at rising taxes, a particularly serious problem in the inflationary 1970s, into the mix.

By scaring white suburban voters into believing that their version of the California Dream was threatened by rising taxes to pay for programs benefiting people of color, conservatives and Republicans succeeded in creating a tax revolt they used to push their ideological fantasies of destroying the middle class and prosperity by defunding the government that created it.

Prop 13 was the moment this toxic force arrived on the political scene. Democrats were spooked and spent the next 30 years running away from tax increases. With rare exceptions, Democrats tried to take a "me too" approach to dealing with the tax revolt. Rather than trying to reverse it or take power away from it, they generally tried to pass themselves off as a kindler, gentler version of Howard Jarvis. There were important exceptions, particularly John Garamendi's bold move in 1990 to destroy the Gann limit (a hard spending cap) in an initiative that also raised gas taxes.

But those exceptions were outnumbered by incredibly bad decisions by Democrats to go along with big tax cuts for short-term gains. Gray Davis likely would have won the 1998 gubernatorial election anyway, but Democrats went along with the huge tax cut that outgoing Governor Pete Wilson proposed that year in the belief that they had to do so to win the election.

Those tax cuts began California's financial woes. In 2002, faced with huge budget deficits, Democrats did raise the vehicle license fee. The tax revolt was revived one last time, however, when Arnold Schwarzenegger used that as part of his successful recall and replacement of Davis as governor. Democrats again went along with a reckless tax cut, agreeing to slash $6 billion in revenue by cutting the VLF and not replacing it with anything new. That act in 2003 created the structural revenue shortfall that has finally been closed by the passage of Prop 30.

This victory over the tax revolt happened because of years of progressive organizing against further tax cuts and for tax increases. Progressive voices and organizations completely rejected the post-1978 Democratic logic that the tax revolt had to be appeased. Instead, we insisted that the tax revolt had to be confronted and defeated. With Prop 30 that's exactly what happened.

Progressive organizing against the tax revolt, especially in the late '00s as the budget crisis returned, helped unite the California Democratic Party in support of tax progressivism. Democratic unity was so strong that Jerry Brown, the original architect of the appeasement strategy in the wake of Prop 13's passage, saw he had no other path forward to govern the state but to align himself with the progressive movement to solve the state's revenue woes. The Courage Campaign and the California Federation of Teachers in particular played a big role in pushing Governor Brown to the left, and a broad alliance of community organizing groups did the ground work to get voters registered and make the GOTV calls to get Prop 30 approved.

Had Governor Brown allied with progressive forces in 1977 during the fateful legislative debate over property tax reform, all of this could have been avoided. Instead Brown allied with corporations and moderates, failed to get a reform package approved, and set the stage for Prop 13's passage the next year.

Still, the biggest change that was required was demographic. Many of those angry white suburbanites convinced that people of color and their liberal allies were going to destroy their suburban paradise have left California, either by relocation or by the intervention of the Grim Reaper. In their place has grown up a native-born population that is diverse, that isn't ideologically wedded to car-centric postwar suburbs, and that rejected the "I've got mine, screw you" mentality of Howard Jarvis and his millions of voters.

And that brings us to the real losers here. With Prop 30's passage and the apparent securing of a two-thirds supermajority in both legislative houses by Democrats, the California Republican Party is a dead party. It no longer has any political relevance in this state. It is a fringe party, dedicated to preserving a vision of California that is now firmly in the past. California Republicans began walking the road to oblivion in 1994 with their embrace of rabid anti-Latino sentiment among suburban whites. As California became younger and more diverse, that sentiment was a political killer, leading to a sweep of all statewide offices by Democrats in 2010.

The only thing the California Republicans had left was anti-tax sentiment. They hoped that they could survive by becoming the voice of the tax revolt, and that they could revive their fortunes by rallying voters against Democratic tax increases. Prop 30 shows that strategy is a failure too. Voters are tired of watching their tuition soar and their schools suffer.

The California Republican Party is an anti-Latino, anti-tax party in a state that has no use any more for either position. The conservative movement in California, every bit as ideologically insane as their national counterparts, has now lost their last thin reed of hope. After a strong 50 year run, starting in the living rooms of Orange County Birchers and the executive offices of corporations who hated paying taxes, the conservative movement in California came within a hair's breadth of destroying the middle class and the government that created it.

There's a lot of rebuilding left to do, a lot of legal and constitutional changes that will have to be made to eradicate the remnants of the tax revolt. But that work can now begin. And California's future glows that much more brightly.


Robert Cruickshank writes on California politics at Calitics and California High Speed Rail Blog. This article was originally published at Calitics.

California has NEVER had an unemployment rate since WWII greater than 10% until 2008. Since 2008, it has never been below 10%. We are now at four years. What has happened? For the last 30 years taxes and regulations have gone up considerably. The result is a steady 10% unemployment and a dead economy. This is the new normal. Get used to it

What an astute statistical analysis. "30 years of regulations, 4 years of unemployment over 10%...[punches buttons on counting machine]...by Jesus I'VE GOT IT!"

I am, I think, pretty typical of who Brown describes as rich. Both my wife and I are in our late 50s, our children are gone, and we are both professionals. Our taxable income will probably be about $270,000. The way I look at it, we have only a couple of years to save money for retirement.

Under the current plans, our marginal tax rate is going to be: 39.6% Fed, 10.3% state of California, 7.65% FICA. Thus, every extra dollar we make, the state and local governments are going to take 56% of it. This does not, of course, include sales and property taxes.

I am leaving. We are moving to Texas. It is a no-brainer.

You said: "Tuesday's vote to pass Prop 30 - by a larger margin than most observers expected - does more than just provide $6 billion of badly needed funding to the state's public schools. It brings to a close a 34-year long tax revolt that came very close to destroying California's middle class, locking its low income families into permanent poverty, and left the state on the edge of financial ruin. And while there is still a lot of work ahead to overturn the legal and constitutional legacies of the tax revolt, it no longer has political power. That in turn means the California Republican Party, and the California conservative movement, are as dead as Monty Python's parrot."

I say:I think your prognosis is seriously premature. This is just the beginning and the "END" result (whether a significant actually goes to school rather than cost of administering this problem [not counting the waste fraud and mismanagement of these fund may bring] and the cost of the investment of passing Prop 30 will actually bear fruitful for which Prop 30 is intend for--for example: for the common "GOOD" of the students and teachers. Or will they "again" end-up with the shortend of the stick as the administrators--superintendent of schools and higher education put themselves "first" [in terms of wage; benefits and pension--which has been the reality of the past several decades]) will be good for the school.

AS I SEE IT AND HAVE BEEN OBSERVING FOR AS LONG AS I LIVED--NEARLY 55 YEAR....THE POWERFUL AT BE...HAS NOT LEARNED THEIR LESSON YET.

The wrath of God and the ordinary person (the poor; the innocent; the victims; the sick; the disabled disparate, displaced, and the helpless) is growing with revelation as the greed of those who has come to trial will bear the grunt of their own action will be brought to trial and the consequences of their disbelief their sins will be brought to justice and be held to account by NATURE and their maker. The wrath of Nature is clearly an evident in our environment. The truth will prevail and there will be no escape. The Empire’s power is only as good as how it is used for the common good.

The "BUBBLE" of GREED has its consequences. There is a "price" to pay for misleading the ordinary people and mostly the most vulnerable among us. WALL STREET, stock shareholders, the actuaries, the "RISK" management and their associates and government which they purchased has apparently has not "PRICED" the consequences of the "bad-ACTIONS" in their calculation. The LONGER they keep PEOPLE "unemployed" the longer they (the power at BE) continue to WAGE war against LABOR (including ordinary people) which were MOST responsible for the "SUCCESS" of successful CORPORATION; the ultimate END will be at their peril. GREED and "WEALTH" as they defined as "GOOD" and a means of segregation, a concentration of materialism, a separation of social "class", that keeps "income inequality" will sooner or later LEARN that they are dellusional and that lifestyle isn't what they caught up to be. The Higher they RISE in this quest to be more than GOD the faster and painful the fall as REALITY of catches up with them.

The most powerful economic bubble of financials and INSURANCE COMPANY will eventually DEFLATE as the truth about "GLOBAL WARMING" the consequences of the RISK becomes the ultimate END.

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Nothing like a short summary of California's political and economic history from the progressive perspective to bring out the freaks and whack jobs. I'm putting my aluminum foil hat on- quick! before the toxic radiation kills more of my precious brain cells.

The GOP emperor has no clothes. Exposed as a group of haters who only use "traditional values" and even Christianity as a whitewash to barely cover their pandering to corporate interests.

What I'd like to see is the GOP reconsider its basic and core values in a sincere and meaningful way, come up with some true guiding principles that don't involve hurting other people.