Governance by Loophole

Proposition 13 of 1978, the Jarvis-Gann initiative, did much more than clamp limits on property taxes in California. It undermined some of the basic tenets of representative government in the state. The measure severely restricted the ability of local elected officials to raise the revenues needed to provide such essential services as police and fire protection. In the process, it threw the concept of majority rule in the trash can.

Proposition 62 on the Nov. 4 ballot would make this bad situation worse. It should be defeated.

To raise or impose any existing or new general tax under Proposition 62, a city, county or special district would have to first approve the levy by a two-thirds vote of its governing board. Then, the tax would have to win consent of a majority of voters within the city, county or district.

Sponsored by the late Howard Jarvis, Proposition 62 seeks to correct a “loophole” in Proposition 13. Actually, it was sloppy drafting on the part of the Proposition 13 authors. The 1978 measure, anticipating efforts of local government to find other taxes to replace lost property tax revenue, banned the imposition of any special tax unless approved by two-thirds of the voters.

When San Francisco raised its business license tax without a vote of the people, it argued that the levy escaped the Proposition 13 restriction because it was a general tax to provide money for the city’s overall operation. The state Supreme Court upheld that position. Proposition 62 would overturn this interpretation and apply Proposition 13-style restrictions to local general taxes.

Except that there seems to be a major loophole in this alleged Proposition 13 loophole-closer. Since the measure qualified for the ballot as an initiative statute, the state Legislative analyst says it can apply only to 362 general law cities that operate under statutory authority granted by the Legislature. The analyst says it would take a state constitutional amendment to have Proposition 62’s language affect the 82 charter cities, including Los Angeles, Long Beach, Anaheim, Santa Ana, San Diego, Riverside, San Bernardino and most other large California cities with a combined population of 12 million.

Not only is Proposition 62 bad law, it most likely would be applied, unfairly, only to the small cities and towns in the state.

But a larger issue is involved that, in spite of eight years of sorry experience living under Proposition 13, still seems to escape its self-styled Populist supporters. What Proposition 13 and its successor measures have done is to initiate a massive shift of power from local government in California to Sacramento. Power follows taxing authority. And Proposition 13 has driven revenue-raising authority away from local control and to state government. Proposition 62 would consolidate this trend.

The Proposition 13 movement served one single worthy purpose: It put a halt to runaway property tax assessments. But in the process, it has forced a radical reordering of state and local government in California--with a concentration of power in Sacramento--in a way that would stupefy the Populists of yore. This revolution must end if California cities and counties are to have any control over their own destinies. Defeat of Proposition 62 is a good place to start.