Aftershocks of Prop. 13 Are Still Being Felt

In 1978, the jowly, Everyman mug of Howard Jarvis was everywhere, usually with his fist raised, fanning the fervor that surrounded Proposition 13, the biggest anti-tax revolt since the Boston Tea Party.

He was on the cover of Time magazine, on front pages, and on the cover of his top-selling book. He was the real-life version of Peter Finch in “Network,” the mad-as-hell agitator who refused to take it any more, and he egged on everyone else to follow his lead.

With his partner, Paul Gann, Jarvis transformed much more than California’s property tax system. When Proposition 13 won in a landslide on June 6, 1978, little in California’s politics ever would be the same.

Among its legacies, Proposition 13 shifted power from local government to Sacramento. It spawned a generation of leaders dead set against raising taxes. And it turned the initiative process, so dear to reformers at the turn of the century, into an industry by century’s end.

Proposition 13 was quintessentially California. It revolved around home ownership. It reflected distrust of government. And its champions were two transplants.

Jarvis was a publisher of small newspapers in Utah before moving in the early 1960s to Southern California, where he entered the manufacturing business and became political gadfly.

Gann, a preacher’s son, was given to quoting biblical passages in a soothing drawl that was a remnant of his Arkansas roots. He came west in the Great Depression, sold cars and real estate in the Central Valley, and went bankrupt twice.

They were an odd couple. But they shared an idea. Each had been pushing property tax relief initiatives and plans for years before they hit pay dirt with Proposition 13.

The problem they sought to solve was real.

There really were retirees who could not afford their property tax bills and faced the prospect of having to sell homes they had bought in post-World War II tracts.

Homeowners grappling with taxes that shot up as fast as their home values were in no mood to heed the warnings issued by seemingly every official in the state: Cops would be laid off. Libraries would close. Parks would go to seed.

“The fear in 1978,” said Dan Wall, Los Angeles County’s Sacramento lobbyist, “was that there was going to be a huge and immediate calamity. That was overreaction. Instead, it was atrophy: a slow, painful degradation of services.”

For homeowners and businesses, Proposition 13 was a boon. It rolled back assessed value to 1975 levels, then capped property taxes at 1% of the property’s value. To cap future increases, property’s assessed value could rise no more than 2% a year. The initiative immediately cut taxes by more than 50%, $6.1 billion statewide. That was predictable. But like many initiatives, Proposition 13 had unintended consequences.

*

While its supporters distrusted big government, Proposition 13 made Sacramento far more powerful by giving the Legislature the power to divvy up property taxes, a job previously reserved to county supervisors.

These days, almost all tax money flows to Sacramento. The state takes its cut, and sends what’s left to the locals--after decreeing how most of it will be spent.

Proposition 13 changed land use policy, too. Unable to raise property taxes, local governments now rely on sales taxes. To raise sales taxes, cities must approve new malls and car dealerships. Factories, by contrast, don’t generate sales taxes.

In perhaps its most dramatic impact, Proposition 13 proved to political consultants how powerful “direct democracy” could be. An industry of paid petition circulators, promoters and other specialists boomed.

During all of the 1970s, 21 initiatives qualified for state ballots. In the 1980s, that number more than doubled, to 46. This last decade of the 20th century, there were 61 initiatives.

Last November, campaigns for and against seven citizen-generated initiatives, plus the five measures placed on the ballot by lawmakers, cost almost $200 million, $60 million more than the previous record.

In March, the California Teachers Assn. will push an initiative challenging a basic tenet of Proposition 13. It would allow voters to approve local school bonds by a simple majority, rather than the two-thirds majority backed by Jarvis.

The teachers know that much has changed since 1978. The Howard Jarvis Taxpayers Assn. mailing list once numbered more than 300,000 people. Now there are 130,000, said Joel Fox, who has run the group since Jarvis died in 1986. And because of Proposition 13, Fox said, “people aren’t as afraid of the tax man as they used to be.”