The Legacy of Prop. 13

Proposition 13 is 20 years old and it’s time to proclaim the property tax-cutting measure a stunning success. The ballot brainchild of Howard Jarvis and others has been vilified by critics for two decades and blamed for much of what ails California. But, at the heart of it, the measure did exactly what Jarvis promised. More important, it fulfilled the demands of California homeowners, many of whom legitimately feared that runaway property taxes would force them from their homes.

Proposition 13 provided a substantial and permanent reduction in soaring property tax levels and brought stability to a tax system that had been rife with corruption and subject to the volatile whims of the housing market. Today the property tax formula of Proposition 13 is an integral element of California life.

But that is just one side of the story. The secondary, negative effects of Proposition 13 are another matter and they continue to reverberate throughout all levels of government in California. The measure tapped and nurtured an aggressive anti-tax, anti-government ethos that makes it difficult, if not impossible, for state and local officials to cope with the problems of growth and citizen demands for services.

Proposition 13 helped create a tangled system of state and local government finance that few understand and fewer still are willing to change. There has been a massive power shift from local governments to Sacramento. And as the responsibility for spending decisions moved to Sacramento, mistrust in those making the decisions grew.

Reformers have struggled over the years to develop a politically salable way to bring some reason and logic back to the system. Their reports sit dusty and ignored on Capitol bookshelves. A turnaround seems dim.

Sacramento’s efforts in the early and middle 1970s to fix the problem of doubling property tax bills and inflated housing prices were to too feeble and too late. Paul Gann, Howard Jarvis and other tax busters easily qualified Proposition 13 for the June 6, 1978, ballot and it passed with a whopping 65% of the vote.

State and local officials had predicted chaos in governmental programs if the measure was approved. But taxpayers didn’t care about side effects and unintended consequences. Their eyes were on an instant cut that would trim tax bills by an average 57% statewide.

After the election, naysayers insisted that Proposition 13 would never work, that a taxpayers’ civil war between those who stayed in their homes with 1975-vintage taxes and those who bought new ones, triggering reassessments and higher taxes. But there was no civil war. The doubters then said homeowners would rebel when they discovered that California business would reap the most benefits from the Proposition 13 rollback. But the homeowners were fully satisfied with their own tax cuts.

So there was no counterrebellion, but there surely has been 20 years of decline in government services and programs, which many blame in large part on Proposition 13. Nevertheless, opinion polls indicate that Proposition 13 remains almost as popular today as it was 20 years ago.

Officials and academics probe for the lessons of Proposition 13. The most fundamental one is obvious: This tax revolt would not have happened if California’s leaders had responded promptly and decisively to a legitimate crisis 20 years ago.

Tuesday: The road to reform.