Prop. 13’s Legacy: More Malls and Less Farmland
To measure the legacy of Proposition 13 in Ventura County, just cruise the freeway and look at the malls.
The Promenade at Westlake. Two factory outlets--in Camarillo and Oxnard--within five miles of each other. All the new auto dealerships. The Buenaventura Mall, aging but getting a multimillion-dollar make-over.
Twenty years after it passed, Proposition 13 still stirs debate. But on this, county leaders agree: The landmark initiative radically changed the way California cities raise money. In slashing property taxes, it made sales tax an increasingly important engine of government revenue.
And by doing so, Proposition 13 spurred the creation of what one planning expert dubbed “Sales Tax Canyon,” the 10-mile commercial corridor between Camarillo and Ventura surrounding the 101 Freeway, in a county where residents profess a deep love of farmland and open space.
“If you compare the 101 to what it was 20 years ago, Prop. 13 turned agriculture right into retail,” said William Fulton, a Ventura urban planner.
With farmland preservation Ventura County’s hottest political issue this year, leaders on both sides of the debate say Proposition 13 has heavily influenced local land use.
Those backing the Save Our Open Space and Agricultural Resources--or SOAR--campaign view the Ventura Freeway as an increasingly cluttered corridor of unsightly malls--edging ever closer to resembling the San Fernando Valley. As part of their slow-growth campaign, they cite freeway development as an example of how cities trade scenic landscapes for cash.
“We’re seeing, definitely, the battle of the big box stores,” says Thousand Oaks Councilwoman Linda Parks. She says a glut of new malls has eroded the community’s small-town feel by putting mom-and-pop stores out of business.
“Sales tax revenue should not be the basis for community development,” Parks said.
Even those opposed to proposed growth restrictions concede that Proposition 13 has led to looser development policies.
For instance, Mitchel Kahn, a real estate attorney and president of the Ventura County Economic Development Assn., sees growth along the Ventura Freeway from a far different perspective than preservationists.
“Visual pollution is in the eye of the beholder,” said Kahn, whose clients have included developers of the Target store in Camarillo and the K mart in Moorpark.
“SOAR is not about the agricultural economy. It’s about viewshed,” Kahn said, adding sarcastically, “ ‘I like my open space. It’s pretty.’ ”
But Kahn nonetheless agrees that the county’s commercial corridor would not have grown so fast if cities hadn’t dangled tax breaks and land deals.
“Cities would have been a little more rigid in their planning concerns,” Kahn said. The malls and auto plazas “would have come here, but it would not have been as easy.”
Indeed, in Ventura County and across the state, cities have earmarked millions of public dollars to lure retail development. In the past few years, those deals have included:
* Ventura’s plan to give more than $30 million in sales tax revenues to Buenaventura Mall developers over 20 years, after the mall gets renovated.
* Oxnard’s offer of up to $13 million in reimbursements to auto mall developers.
* Camarillo’s agreement to waive $1.5 million in traffic fees to spur retail development.
To be sure, many residents across the county remain thankful for Proposition 13’s most direct effect: It froze the assessed value of homes bought prior to the initiative’s passage and capped property taxes at 1% of the home’s assessed value. Today, about one in six county homeowners still pays property tax bills at 1975-76 rates, the benchmark date set by Proposition 13. Those 32,640 homeowners pay an average annual property bill of about $700.
Many say they would have struggled to stay in their homes if property taxes continued to escalate.
“I really appreciate it,” said Daryl Brown, an analyst in the county assessor’s office, “because I got that rate.”
Brown, a Ventura homeowner, pays about $450 a year in property taxes.
It’s unlikely, however, that residents had such issues as urban sprawl and strip-mall glut on their minds when they voted on Proposition 13. And sales tax figures show that the aggressive pursuit of new retail outlets has produced mixed results.
For instance, Thousand Oaks, with an affluent population and close proximity to Los Angeles County, has built a thriving retail base. With sites ranging from the 20-year-old Oaks mall to the 2-year-old Promenade at Westlake fueling retail spending, the city saw sales tax revenue climb 27% from 1993 to 1997, reaching a county-leading $16.6 million last year.
Camarillo, with its Premium Outlet stores--along with its central county location--has seen remarkable recent growth. Sales tax revenue reached $5.2 million last year, up about 43% from four years earlier.
Meanwhile, Simi Valley--perennially trying to lure major retail chains but facing stiff competition from malls elsewhere in the county and in the San Fernando Valley--collects only about half the sales tax revenue of Thousand Oaks.
And in west Ventura County, both Oxnard and Ventura saw their sales tax revenues slump last year--despite increasing build-out along the freeway and an improving local economy.
Oxnard’s sales tax revenue dropped 8% last year, to $13.5 million. Sales tax revenue in Ventura dropped slightly, to $13.6 million.
The disappointing figures have not stopped the neighboring cities from waging a protracted legal battle over the expansion of the Buenaventura Mall, which would move Robinsons-May and Sears from Oxnard’s Esplanade Mall to Ventura.
Bids for Reform
As of last fall, the two cities had spent a combined total of nearly $800,000 on litigation that began when Oxnard sued to block the expansion several years ago. The nearly $600,000 spent by Oxnard tops the estimated $500,000 the city earns annually in sales taxes generated by the two department stores.
That expensive battle, coupled with land-use concerns, has prompted experts including Fulton to call for a reevaluation of the sales tax competition.
Fulton, for instance, suggests that cities consider a plan to share sales tax revenue. The idea is not new, and it’s enormously unpopular among most civic leaders, even those who rail against urban sprawl.
“I don’t think giving away our sales tax is going to solve the problems created by Prop. 13,” said Parks, the Thousand Oaks councilwoman.
But the concept merits discussion, Fulton said, because “the whole goal would make land-use policy less fiscally oriented.”
And as the debate over the county’s future growth continues, plans aimed at sales tax reforms have surfaced.
County Supervisor John K. Flynn, for instance, says a quarter-cent sales tax hike could be used to buy farmland and preserve it as open space.
Meanwhile, Richard Francis, one of SOAR’s primary backers, says he fears similar retail build-out on California 126, as both Fillmore and Santa Paula have announced major growth plans.
“Visual pollution is a very significant environmental impact,” Francis said. “And it is happening on the 126.”
Although the goal of the SOAR campaign remains passing an initiative that would freeze each city’s current growth boundaries, Francis said that once the issue is decided, “I’ll turn my energy” to sales tax reform.
But Kahn and others say that any reform aimed at fixing Proposition 13 probably will force cities to find new methods of taxation. Indeed, cities have not relied only on sales tax to raise money; hotel taxes and utility taxes are just two of the myriad levies to have become commonplace since 1978.
“The problem is, almost any solution will require the state to tax something different,” Kahn says. “That’s what happened with Prop. 13. Now they have to go back and reinvent the wheel again.”
20 YEARS LATER: Proposition 13 has transformed California in ways unforeseen by anyone. A1