COLUMN RIGHT : The Bomb in Wilson’s Budget Plan : Taxpayer protections in Prop. 13 would be abandoned.

Gov. Pete Wilson has announced his plan to solve California’s $12.6-billion budget deficit. He would restructure government, cut spending and raise taxes by $6.7 billion.

Although the spotlight is on how his plan would get us out of fiscal distress, Wilson’s proposals, if passed, would do something much more sweeping and long-term. They would shift the battle over taxes and spending back to the local level for the first time since passage of Proposition 13. In so doing, some taxpayer protections dating back 100 years would be stripped away.

In addition to the tax increases he proposed in his January budget announcement, the governor wants to raise the sales tax by three-quarters of a cent, a half-cent of which would be dropped once the state balances its books. But the half-cent tax could be revived by county governments, if a simply majority of the voters approve. The revenue would pay for schools or crime prevention.

This proposal would undo a major provision of Proposition 13, the 1978 measure that dramatically cut property taxes. The proposition called for a two-thirds vote of approval for special taxes. The California Supreme Court subsequently defined special taxes as taxes earmarked for a specific purpose--like schools or crime prevention.

The governor would also end the two-thirds voting requirement for approval of local general obligation bonds for schools, prisons and parks and replace it with a simple majority. While many believe that this provision is part of Proposition 13, it actually dates to the 1879 state Constitution and to its implementing legislation for county government in 1883. This time-honored protection for property taxpayers would be sacrificed so local government could spend more.

All of these proposals assume that local governments don’t already get enough taxpayer money to pay for their programs. Although Proposition 13 did affect their revenue flow, new figures compiled by the business-sponsored California Taxpayers Assn. tell a different story.

Property taxes for cities, counties and special districts totaled $4.7 billion in 1977-78, the year before Proposition 13 passed. The tax bite dropped to $2.3 billion in 1978-79, the measure’s first year in force. But property taxes during the 1988-89 period swelled to $8.5 billion, a 271% increase, despite Proposition 13’s restrictions. That’s only a part of the local revenue story. Creative bureaucrats have invented other sources of money besides property taxes. These taxes and fees, not including sales taxes, generate an additional $6.5 billion a year.

Increases in taxes on business licenses, hotels, motels and utility users account for some of this new money. But it is with fees, benefit assessments and parcel taxes--the latter two extracted from property owners--where dramatic revenue increases have occurred. Since 1977-78, service charges and fees have increased 260%, to $3.3 billion.

Benefit assessments, used since pre-medieval England to finance capital improvements, have been creatively altered to include services--street lighting and landscaping, for example--usually paid out of the general fund. These non-voted assessments have grown from $36 million in 1978-79 to $279 million today, a jump of 672%. In special districts--those set aside to perform such functions as flood control--assessments have increased 2,506%.

Use of these funding methods is destined to increase even more dramatically, following a recent ruling by the California Supreme Court. The court said that it is permissible for the state to continue imposing programs on local governments without providing the resources to pay for them, as long as local governments avoid new taxes. The court does not consider service charges, fees and assessments as taxes. Nor, for the most part, do they require a vote of the people for implementation.

Given Wilson’s proposals to shift more and more state programs to local governments, and the Legislature’s parallel desire to send more and more problems to the locals so locally elected officials can take the heat for raising revenues, the outlook for great increases in assessments and fees is certain.

The Wilson plan would take us back to pre-1978, when local governments fought the tax battles.