Brown Backs Prop. 13 ‘Bailout’ Reversal

Comparing local governments to drug junkies looking for a fix, Assembly Speaker Willie Brown on Friday backed a proposal to reverse the state “bailout” that helped cities and counties survive the property tax cuts enacted by Proposition 13.

“We should never have bailed out local governments,” Brown told reporters. “That was a mistake. They became like heroin addicts. You have to keep feeding them.”

Brown, a Democrat from San Francisco, made the remark as he entered a meeting with Gov. Pete Wilson and other legislative leaders, who have been huddling daily behind closed doors trying to agree on a way to balance the budget.

The Speaker, the governor and two other members of the leadership quintet--Assembly Republican Leader Bill Jones and Senate GOP Leader Ken Maddy, both of Fresno--dodged reporters on their way out after the session. But Senate Leader David A. Roberti (D-Van Nuys) said the proposal to reverse the Proposition 13 bailout was on the table and seemed likely to be adopted in some form.

With Wilson and legislators from both parties loathe to raise taxes one year after passing a $7.5-billion tax hike, they are looking for ways to prevent the deep cuts in state-supported health, welfare and education programs that are certain if the state balances its budget using only the revenue available under current law.

As a result, the leadership group is considering the proposal to reverse the course the state took after Proposition 13, when much of what was left of property tax revenues was shifted from the schools to local government. The state then bailed out the schools with money from the general fund, which is supported largely by income, sales and bank and corporation taxes.

If that 13-year-old arrangement is abandoned, the state would devote more of its property tax income to schools. The cities, counties and special districts, in turn, probably would have to raise their own taxes and fees to avoid cutting deeply into their budgets.

The idea has unleashed a full-scale lobbying war between the clashing interests. If the schools come out ahead, as now seems likely, the cities and counties will then battle each other for whatever is left.

“The cities and counties always have been like cross-town rivals,” said Karen Coker, a lobbyist for the California State Assn. of Counties. “In this game, they both lose.”

But city officials say the real losers will be municipal governments and the residents who depend on the police, fire and other services that cities provide.

“It looks like they are after $1 billion and they say it will come from all local government, but in our private discussions it sounds like they want to take it from cities,” said Sheri Erliwine, a spokeswoman for the League of California Cities.

Erliwine said Brown is wrong to characterize cities as addicted to state money. She notes that the property tax was created to pay for services related to the ownership of land--police, fire, planning, street maintenance and the like.

She said state legislators, stung by the public reaction to their big tax increase a year ago, want to make city officials take the heat for raising taxes this time around.

“Council members run into folks in the local post office and grocery stores and they’re going to pay the price for the Legislature’s inaction,” Erliwine said.

But Roberti said Friday that it makes “eminently good sense” to reverse the Proposition 13 bailout and force the cities to raise the money that they want to spend.

“That’s how you effect economies,” Roberti said. “If all you have to do is spend the money and you don’t have to worry about where it’s coming from, you’re going to spend every last penny and then some.”