Paul Gann, left, and Howard Jarvis, hold up their hands on the night of June 7, 1978, as their co-authored initiative Proposition 13 limiting property taxes took a commanding lead in the California primary. Prop. 13 turns 40 this year, and may face challenges. (AP Photo/stf) ASSOCIATED PRESS
CALIFORNIA FORUM
California’s Proposition 13 turns 40 this year. Its midlife crisis may be on the way
February 18, 2018 12:01 AM
Updated 10 hours 41 minutes ago
This year is the 40th anniversary of Proposition 13, the iconic property tax limit measure that California voters overwhelmingly endorsed in 1978.
It’s only a slight exaggeration to say that it’s also the 40th anniversary of efforts to repeal or alter Prop. 13’s provisions, and those on the left side of the political ledger – unions, particularly – may be trying once again this year to undo it.
IF THE SPLIT ROLL MEASURE MAKES IT TO THE BALLOT, IT WOULD LIKELY BE ONE OF THOSE MASSIVELY EXPENSIVE BALLOT MEASURES FOR WHICH CALIFORNIA IS FAMOUS, OR INFAMOUS.
An initiative awaiting clearance for signature-gathering would create a so-called “split roll,” preserving Prop. 13’s property tax limits for homes and residential rental units, but removing them for other commercial and industrial properties.
The up-front proponents are such good government groups as the League of Women Voters, which contend that the state’s schools and local governments are seriously underfunded.
Standing in the shadows, however, are public employee unions, which would benefit from having more money flowing to schools and local governments, especially since their budgets are being squeezed very hard by fast-rising pension costs.
How much more?
The Legislature’s budget analyst, Mac Taylor, estimates that a split-roll could generate net annual revenues in the $6-10 billion range.
Those are big stakes and while the unions could spend millions of dollars on a campaign to pass the measure, the business interests that would be paying more property taxes have even deeper pockets. After all, spending even $50 million to defeat a split-roll measure would be pocket lint in comparison to the multibillion-dollar stakes.
So, if the split roll measure makes it to the ballot, it would likely be one of those massively expensive ballot measures for which California is famous, or infamous.
Proponents would pound on providing more money for schools, which, polling tells us, are the most popular thing that government does. That was the theme of two successful ballot measures that raised income taxes on the wealthiest Californians in 2012 and 2016, and in fact per pupil spending has increased by 66 percent in the last seven years.
Opponents will raise the specter of undoing Prop. 13, which has consistently enjoyed high voter approval in polling over the last 40 years, arguing that if commercial property is hit with tax increases, homes will be the next target.
They also would point out that despite Prop. 13’s restrictions, property tax revenues have increased 12-fold since it was passed due to new construction and reassessment when properties change hands.
Finally, they may also contend – with a factual basis – that the extra money wouldn’t mean better schools and local government services, but rather would shore up pension funds that face huge unfunded liabilities.
So would California voters endorse a split property tax roll? Recent polling indicates its proponents would face an uphill battle.
The Public Policy Institute of California has tested the issue periodically and once found a fairly strong level of support among likely voters, but the most recent PPIC poll found it had slipped from 60 percent in 2012 to 55 percent in 2015 and just 46 percent now.
One rule of the thumb about contentious California ballot measures is that they must begin with strong support, well over 50 percent, if they are to have a chance of prevailing against well-financed opposition, so 46 percent is a very weak starting point.
In years past, split-roll advocates have loudly announced campaigns for it, only to quietly throw in the towel when it became clear they had little chance of winning.
Ultimately, therefore, the 40th anniversary of Proposition 13 may be a whimper, instead of a bang.
Dan Walters is a columnist at CALmatters. Reach him at dan@calmatters.org.
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