Forty-two years later, an­other prop­erty tax bat­tle

Marysville Appeal-Democrat - - Forum / From A1 - By Dan Wal­ters Calmat­ters Colum­nist

It’s been 42 years since Cal­i­for­nia vot­ers sharply al­tered the state’s po­lit­i­cal dy­nam­ics by over­whelm­ingly pass­ing Propo­si­tion 13 to slash prop­erty taxes, ig­nor­ing vir­tu­ally unan­i­mous op­po­si­tion from lead­ers of both po­lit­i­cal par­ties.

It’s also been 42 years since Propo­si­tion 13’s op­po­nents – public em­ployee unions and oth­ers with stakes in gov­ern­ment spend­ing – first be­gan plot­ting how to over­turn it.

They as­sumed, or hoped, that the state Supreme Court would in­val­i­date it. But a gen­er­ally lib­eral court re­fused to do so. They hoped that vot­ers would quickly change their minds once the re­duc­tion of rev­enues af­fected lo­cal gov­ern­ment ser­vices and schools. That didn’t hap­pen either.

In fact, in polling year af­ter year, Propo­si­tion 13 proved to be en­dur­ingly pop­u­lar with vot­ers, de­spite crit­i­cism that it un­fairly fa­vored some home­own­ers over their neigh­bors and was a wind­fall to own­ers of com­mer­cial prop­er­ties, such as of­fice build­ings, ware­houses and ho­tels.

Even when Cal­i­for­nia be­gan its his­toric po­lit­i­cal evo­lu­tion from a some­what con­ser­va­tive state to one of the na­tion’s bluest bas­tions, Propo­si­tion 13 seem­ingly re­mained un­touch­able, as demon­strated by Jerry Brown’s at­ti­tude to­wards it.

He was a gov­er­nor seeking his sec­ond term when it ap­peared on the June 1978 bal­lot and, like other po­lit­i­cal fig­ures of the time, op­posed it, call­ing it “a ripoff.” But as soon as it passed by a nearly 2-to-1 mar­gin, Brown de­clared him­self to be a “bor­na­gain tax cut­ter” and spon­sored a state in­come tax re­duc­tion to align him­self with what the me­dia called “a tax re­volt.”

Thirty-two years later, when Brown re­turned to the gov­er­nor­ship and faced a se­vere state bud­get cri­sis, he was fre­quently asked whether it was time to re­peal Propo­si­tion 13 but con­sis­tently ducked it. He did, how­ever, spon­sor a state in­come tax in­crease that, in spirit, un­did the tax cut he and the Leg­is­la­ture had quickly en­acted in 1978.

Mean­while, the union-led an­tiPropo­si­tion 13 coali­tion con­tin­ued to seek ways to at­tack it, fi­nally set­tling on what’s called a “split roll” to par­tially re­move some of the tax lim­its on com­mer­cial prop­erty while main­tain­ing those for res­i­den­tial real es­tate. Af­ter many false starts, the coali­tion de­cided that the 2020 pres­i­den­tial elec­tion, with anti-don­ald Trump sen­ti­ment likely to spark a big turnout of Demo­cratic vot­ers, would be the mo­ment.

That’s how Propo­si­tion 15 came to ap­pear on Novem­ber’s bal­lot. If passed, it would raise tax­able val­ues on com­mer­cial prop­erty to cur­rent mar­ket lev­els, rais­ing as much as $12 bil­lion a year for lo­cal govern­ments and schools.

How­ever, the mea­sure’s back­ers had no way of know­ing that the COVID-19 pan­demic and the se­vere re­ces­sion it spawned would visit them­selves on Cal­i­for­nia, chang­ing the tenor of their bat­tle with business groups over the is­sue.

While pro­po­nents ar­gue that the new rev­enue is needed to keep vi­tal public ser­vices, in­clud­ing schools, from be­ing slashed, op­po­nents ar­gue that with busi­nesses al­ready suf­fer­ing, this is the wrong time to sad­dle them with more taxes.

Gov. Gavin New­som lent his sup­port to the mea­sure this month, say­ing “it’s a fair, phased-in and long-over­due re­form to state tax pol­icy (and) it’s con­sis­tent with Cal­i­for­nia’s pro­gres­sive fis­cal val­ues…”

How­ever, a few days later, the Public Pol­icy In­sti­tute of Cal­i­for­nia re­leased a new pollindi­cat­ing that sup­port is, to say the least, tepid with just 51% of likely vot­ers in­clined to vote for it be­fore op­po­nents un­leash a multi-mil­lion-dol­lar ad­ver­tis­ing bar­rage against it.

Both pro­po­nents and op­po­nents know that Propo­si­tion 15 is a proxy bat­tle over whether Propo­si­tion 13 is still an un­touch­able icon. It’s show­down time af­ter 42 years of skir­mish­ing.

Calmat­ters is a public in­ter­est jour­nal­ism venture com­mit­ted to ex­plain­ing how Cal­i­for­nia’s state Capi­tol works and why it mat­ters. For more sto­ries by Dan Wal­ters, go to calmat­ters.org/commentary

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