Now is the time to adjust Prop. 13

Capitol Journal

When nearly two-thirds of the citizenry vote to tax themselves to expand transit but don’t prevail, then democracy has gone cockeyed.

If a small minority can thwart the will of the vast majority on a routine local tax issue, it’s absurd.

This, of course, is what happened last month when Los Angeles County voters overwhelmingly supported Measure J to extend a half-cent sales tax for transit. But the vote fell roughly a half-percentage point short of the necessary two-thirds majority.


Ordinarily — except in California’s dysfunctional government financing system — that would be called a landslide victory.

The same thing happened in two other counties, Alameda and Lake, where tax measures for transportation and waterworks drew landslide support but fell short of two-thirds.

The two-thirds vote barrier creates a paralysis that Democratic legislators, with their new supermajority power, will have the ability to help remedy in the next two years.

There’ll be several proposals to place measures on the 2014 ballot to lower the 66.7% vote requirement to 55% for taxes and bonds.

Even the 55% threshold is undemocratic. But it’s a supermajority that the public may accept, polls suggest. And it’s in line with what Californians concluded in 2000 was a high enough requirement for school bond issues.

The political problem is that anti-tax icon, Proposition 13, which not only dramatically lowered property taxes but created several unintended consequences. Chief among them was shifting of much citizen control over local government spending and taxing to the state Capitol.


When Prop. 13 slashed property tax revenue for schools and local governments, the state — led by Gov. Jerry Brown 1 — rushed in with a $5-billion bailout. State spending soared, and the locals became addicted to Sacramento’s largess.

California government became a Byzantine mishmash of the state dictating to locally elected officials how to administer community services, and often not providing enough money. For three decades there has been a disconnect between who mostly pays (the state) and who mostly spends (the locals).

All this is aggravated by two-thirds vote requirements for taxes in the Legislature and in local entities, mostly stemming from Prop. 13 but also from subsequent court rulings and ballot measures.

Prop. 13 is 34 years old and long past due for updating.

But anytime a thoughtful politician has had the courage to suggest tinkering, there have been howls from homeowners — egged on by anti-tax pros — who fret that their low property assessments are going to skyrocket.

Let’s be clear: There has never been a serious thought of hiking Prop. 13’s residential property rates. No politician is that dumb.

“No one is interested in a frontal attack on Prop. 13,” Senate leader Darrell Steinberg (D-Sacramento) told me. “There is absolutely no desire to touch residential property rates.”

Not even a proposal by Assemblyman Tom Ammiano (D-San Francisco) to change the method of taxing commercial property is receiving a warm reception in the Capitol.

The liberal lawmaker would impose a so-called “split roll” — long feared by business leaders — that would tax commercial property at market value. That property has benefited from Prop. 13 even more than owner-occupied homes because it changes hands — and therefore is reassessed — much less often.

Ammiano contends that Prop. 13 is no longer “the untouchable third rail” for politicians. “It’s more like the bad guy with the mustache who has tied California to the rails with the fiscal train wreck coming.”

But few of his colleagues want to test that thesis.

“I’m not sure [a split roll] should be part of our near-term agenda,” Steinberg says.

“We need to focus on the essential problem. And I think the essential problem is that the [state] government that raises the money is not responsible for providing the [local] service, and the government that provides the service has little authority to raise revenue.”

Not only courage but also caution is required when venturing near anything that smacks of Prop. 13.

A “split roll” move undoubtedly would draw strong opposition from business interests.

However, business conceivably could support making it easier to pass local taxes if the funds were used for building infrastructure, such as transit and roads.

“We believe that infrastructure should be one of the biggest legislative issues for 2013,” says Rob Lapsley, president of the California Business Roundtable. “The funding mechanism is something we want to be involved in discussing.”

Business leaders, in fact, were warming up to supporting a hike in the car tax to finance highway construction. But a Democratic senator, Ted Lieu of Torrance, jumped the gun with a proposal to triple the tax and was immediately asked by Steinberg to drop the unpopular idea. He did.

There’ll be loads of less volatile proposals in the Legislature.

Sen. Mark Leno (D-San Francisco) has proposed that parcel taxes to fund school operations be allowed to pass with 55% of the vote.

Assemblyman Bob Blumenfield (D-Woodland Hills), who is running for L.A. City Council, has been pushing legislation to lower the vote for all infrastructure bonds to 55%.

“We don’t want to go hog wild,” he says. “There’s no appetite for a mass tax raid.”

But he adds, “when 66% of the people vote for something and it loses, that embitters a lot of folks.”

It also points out the hypocrisy of Prop. 13. It decreed that all these tax measures receive a two-thirds vote to pass. But Prop. 13 didn’t need to hit that mark — and fell short (64.8%).