Weak Attacks on Proposition 13 Fail Again

August 22, 2022 By Jon Coupal 1 Comment

Two-thirds of California voters consistently tell pollsters that they think Proposition 13 is a good thing, but even with more than 40 years of constant support, Proposition 13 is still attacked by people who are mad that it’s so effective at protecting taxpayers.

Photo courtesy Franco Folini, flickr

Every argument against Proposition 13 boils down to one thing: Control. They may mask it in buzzwords like “economic dynamism” and “equity,” but the reality is that they think they know how to spend your money and use your land better than you do.

California has the highest or near highest tax rate in every category except property taxes and even then, the state is 14th in property tax collections per capita, according to the latest data from the Tax Foundation.

In fact, county assessors are reporting sizeable growth in the value of taxable property. Locally, Riverside County reported growth of 9.26%, reaching a net total of $369 billion in taxable property. San Bernardino County reported a historic high of $288 billion in value, representing a 9.3% increase from last year. Orange County reported a 6.37% increase, to $721.25 billion. In Los Angeles, the county assessment roll grew by a record $122 billion (a 6.95% increase that brings the roll to $1.89 trillion in total net value) during the past year.

Similar gains are happening statewide. Here is just a sampling: Contra Costa County, 7.79%; Sacramento County, 8%; San Mateo County, 8.34%; Santa Clara County, 7.46%; Ventura County, 7.3%; and Yolo County, 7.23%; Marin County, 6.55%; Amador County, 7.03%; Butte County, 6.81%; Humboldt County, 4.73%; Imperial County, 5.6%; Mendocino County, 2.41%; Modoc County, 4.6%; Napa County, 7.12%; Placer County, 9.2%; Santa Cruz County, 6.33%; Sierra County, 6.37%; and Stanislaus County, 6.82%.

While this is likely welcomed news in the county halls of administration, before Prop. 13 it would have been met with great anxiety among homeowners. That’s because before Prop. 13, property tax assessments were based on current market value and property was regularly reassessed. Some property owners saw their assessments jump 50 to 100% in just one year and their tax bills jump correspondingly — even if the gains in value were only on paper. People were losing their homes to higher taxes.

Click here to read the full article at the Daily Breeze

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Latest ‘racist’ Smear Against Prop.13

July 1, 2022 By Jon Coupal 3 Comments

Here we go again. Another “study” purporting to reveal how unfair Proposition 13 is. But this time, the tax-hikers are using the progressives’ favorite catch-all justification: inequity and racism. Prop. 13 has been under constant assault for 42 years by people who want to raise property taxes without limitation. Like all their other arguments, this one won’t stick either.

First, let’s review a few of the many complaints leveled against Prop. 13 over the last few decades. An early one was the “nosy neighbor” argument, complaining that some new homebuyers pay more in property taxes than their neighbors. Of course, exactly like their neighbors, new buyers’ taxes are based on the price they paid for the property, and increases are capped after that.

Next there was the false charge that “Prop. 13 starves education.” Then there was bitterness that Snow White didn’t pay enough in taxes on her Disneyland castle. Now the theme is Social Justice and the Fight Against Racism.

The 47-page report from the Opportunity Institute and Pivot Learning, titled “Unjust Legacy,” wrongly asserts that Proposition 13 has contributed to inequities in schools and communities. Contrary to the authors’ contention that Proposition 13 is unfair to minorities, the nation’s highest court concluded just the opposite. In Nordlinger v. Hahn, the United States Supreme Court expressly stated that California can “legitimately … decide to structure its tax system to discourage rapid turnover in ownership of homes and businesses, for example, in order to inhibit displacement of lower income families by the forces of gentrification.”

Ironically, at the same time the “Unjust Legacy” report was being released in California, the Washington Post carried a story out of Texas with the headline “Modern ‘redlining’ is pushing some Texans out of their homes.” The Post relates the sad situation of Rebecca Flores, a 79-year-old woman in San Antonio who wants to keep her home in the family. But “she and many of her mostly Mexican American neighbors say they are being priced out of their homes due to skyrocketing property taxes and a hot housing market that has developers pressuring them to sell in the rapidly gentrifying city.”

The Post notes that rising home values, and the rising property taxes that follow, threaten to displace the longtime residents who helped give San Antonio its distinctive culture and character. “It’s a crisis facing cities across America,” the paper reports, “where housing is in short supply, affordable housing is even scarcer, and investors are sweeping into high-demand markets with big cash offers that are pricing many Americans out of the market altogether.”

Flores, the 79-year-old grandmother, is at her wits’ end. “This is how the fiber of a community is frayed,” she said. “Investors come and take over. It’s just like 1836, people with money came and changed laws, got the land and the power and they threw all the Mexicans out. Here we are in 2022, and they are doing the same thing all over again.”

The so-called “Unjust Legacy” report concludes that scholars and others “should collectively determine what it will take to overcome political and taxpayer resistance to changing Proposition 13.” This is a thoughtless assault on California property owners, who do not pay property tax bills “collectively.” They pay property taxes for the property they own, based on the price they paid, with an annual inflation adjustment that cannot exceed 2%.

Click here to read the full article in the Daily Breeze

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California’s Budget Is a Scam

June 23, 2022 By Jon Coupal 4 Comments

Once again, the California Legislature has engaged in the most meaningless exercise imaginable – passing the state budget. In other states, where progressivism is less dominant, the annual budget is an important legislative act. In California, it means squat.

If the enactment of the annual budget is so pointless, why does the legislature even bother to pass it? The answer is simple. The Constitution requires the passage of a budget bill in order for members of the Legislature to receive their paychecks.

It wasn’t always this way. But in 2010, the legislature put Proposition 25 on the ballot. Entitled the “On-Time Budget Act of 2010,” its real purpose was to repeal the requirement that the budget bill receive a two-thirds vote of both houses. Knowing that voters are rightfully suspicious of lowering any vote threshold, the legislature voters sold the proposal by saying that, if they approved Prop 25, budgets would be passed on time, with greater transparency and that legislators would forfeit their pay if the budget was late. All three of these representations were lies.

The reality is that since Prop. 25 passed, California has no budget process. The “budget bill,” which is supposed to be a comprehensive spending plan for the fiscal year reflecting the policy priorities of the state, has now morphed into an ongoing legislative process that has no beginning and no end. “Budget bills” are now being enacted nearly a year after the June 15th deadline, despite legislators being able to collect their paychecks in the meantime.

After Proposition 25 became law, dozens of bills have been designated as “budget related” even though they have nothing to do with the budget, just to take advantage of Prop. 25’s easier rules for passing bills. Many bills that would otherwise require a two-thirds vote can suddenly become an “amendment” to a budget bill, and then they can be passed with only a simple majority. There’s no requirement for a hearing in the legislative committee that has jurisdiction over that area of policy, and the public has no opportunity to submit public comments or to question their representatives about their votes for the bill.

The process is now so scripted, it makes a Kabuki dance look like improvisational theater.

Longtime political writer Dan Walters labeled the 1,000-page budget “another sham, drafted largely in secret with minimal public exposure and many blanks to be filled in later.” Even the decidedly left-of-center Sacramento Bee succinctly summarized the state of play with this headline: “California Democrats passed a fake budget so they could get paid. Taxpayers have to wait.”

Click here to read the full article in the Howard Jarvis Taxpayers Association

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Gas Tax Fight and Memories of 1978

May 3, 2022 By Jon Coupal Leave a Comment

With the state government of California sitting on a budget surplus that exceeds $50 billion, Sacramento politicians can’t bring themselves to return a few dollars to middle-class taxpayers.

While the cost of consumer goods and services is rising rapidly, due mostly to feckless government policies, it is the cost of gasoline that truly sticks in the craw of average Californians. Conservatives in the Legislature, mostly Republicans, have accused the Democrats of intentionally running out the clock on providing gas tax relief before an automatic increase goes into effect on May 1st.

That accusation is well-founded.

Nearly a year ago, Republicans in the state Senate pushed for a “gas tax holiday,” including a full suspension on state gas tax collection for the current fiscal year.

The suspension could have easily been backfilled by the state’s overflowing general fund, which would protect transportation funding.

Later, they offered amendments formally requesting the suspension of the state gas tax and postponing the pending increase.

In the Assembly, who can forget the Democrats’ ambush of Assembly Bill 1638 by Assemblyman Kevin Kiley, another gas tax suspension proposal?

Again, by refusing to even hear the bill the ruling political class is revealed as wholly disconnected to the concerns of average citizens.

That’s too bad because a one year suspension of the gas tax would have reduced the cost of fuel by 51.1 cents per gallon, providing instant tax relief.

It is also an elegantly simple solution that would have been easy for state bureaucrats to administer.

While the majority party in the legislature has slow-walked gas tax relief, Gov. Gavin Newsom at least put the issue on the table by introducing some gas price relief in his original January budget as well as his March State of the State speech.

But legislative leaders in both houses rejected his proposal, falsely claiming that transportation projects wouldn’t be fully funded.

Rather, they said they would prefer some sort of direct payments to taxpayers but weren’t clear on who would get the money.

Which brings us to today, exactly where we were a year ago except that now, both the price of gas as well as the gas tax are higher.

It is no surprise that a recent PPIC poll reveals that record percentages of voters believe they are overtaxed. What is surprising, however, is why a majority of our elected representatives in Sacramento are turning a blind eye to the problem and not taking any meaningful action.

If past is prologue, political foot-dragging on tax relief can be very dangerous.

Click here to read the full article at the OC Register

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Just Say ‘No’ To No-Bid State Contracts

April 29, 2022 By Jon Coupal 2 Comments

During the past two years, Gov. Gavin Newsom’s administration has paid billions of dollars in secretive no-bid contracts with little to no transparency. Now Newsom is deploying his same secretive approach to a growing number of other public contracts. All Californians, irrespective of party affiliation, should be deeply concerned.

Photo courtesy of DB’s travels, Flickr.

Especially troubling is the Newsom administration’s perverse penchant for no-bid contracts, many of which renew automatically. Since 2020, his administration entered into more than 8,000 no-bid contracts, many of which were valued at more than $25 million. By the end of 2020, the total amount was nearly $12 billion.

The latest example? Instead of simply suspending the state’s gas tax, Newsom wants to award a no-bid government contract to a yet-to-be-named third-party vendor to manage a process of providing rebates to Californians, a lot of busywork to distract drivers from the fact that he’s making them pay the state’s highest-in-the-nation gas taxes.

After the horrible mess the EDD made by distributing payment cards in 2020, one has to wonder, what could go wrong?

During the same period that cash and no-bid contracts were being handed out, behested payments on behalf of the governor surged. These are “donations” for charitable or governmental purposes that are specifically requested by elected officials, often from companies with business before the state. In 2020 alone, $227 million was “donated” at the “behest” of the governor, a huge spike compared to just $12.1 million in 2019. This even got the attention of the Los Angeles Times, which wrote that “many of the donors have other business before the governor, received no-bid government contracts over the last year or were seeking favorable appointments on important state boards,” which “creates the appearance of a pay-to-play system.”

Sub-par no-bid contracts risk the squandering of taxpayer dollars and renewing no-bid contracts without reviewing their merits not only wastes taxpayer money but is also a way of skirting California’s contracting process.

For example, in 2020, the Newsom administration awarded a $1.7 billion no-bid contract to the Valencia Branch Laboratory to process COVID-19 tests for the state. Less than a year later, we learned of shocking waste and fraud occurring in the lab. The truth came out thanks to selfless whistleblowers, one of whom is now being sued by the company operating the lab.

For months, Senate Republicans called for a full release of the state investigations on the lab. For months, the state stalled, ultimately complying only after the contract had already auto-renewed.

Because of this fiasco and the larger problem of no-bid contracts, one of the co-authors of this column, Sen. Scott Wilk, introduced three bills – which the Howard Jarvis Taxpayers Association supports – to bring accountability to the process: SB 947, SB 1271, and SB 1367.

SB 947 would empower employees of state government contracts to blow the whistle on fraud, waste or abuse by granting them whistleblower protections already afforded to state workers. SB 1271 would require no-bid contracts of $25 million or more to be subject to oversight of the Joint Legislative Budget Committee prior to renewal or extension of the contract. SB 1367 would prohibit a state agency from awarding a contract to entities that have provided behested payments on the governor’s behalf in the preceding 12 months.

Click here to read the full article at the Press Enterprise

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Californians Don’t Get Much Bang for Billions of Bucks

April 25, 2022 By Dan Walters Leave a Comment

The Howard Jarvis Taxpayers Association isn’t shy about its mission.

Named for the chief architect of California’s Proposition 13 property tax limit, the organization fiercely defends Jarvis’ iconic 1978 measure against those — public employee unions, particularly — seeking its repeal.

So far, Jarvis and its allied groups have prevailed for more than four decades, most recently fending off a 2020 ballot measure that would have removed some of Proposition 13’s limits from business property.

But HJTA, as it calls itself, also works on a broader front, opposing most non-property tax increases and criticizing what it regards as wasteful spending of tax dollars. The latter effort includes an annual report on “waste, fraud and abuse” — essentially a summary of reports from news organizations and independent watchdogs such as the state auditor.

This year’s version, called “Follow the Money 2021,” contains dozens of examples of how public funds have been squandered, embezzled or otherwise misused, plus situations HJTA says show politicians getting special treatment.

One could quibble with some of the examples, but in the main they indicate that taxpayers often are not getting as much bang for their bucks as they should.

So, one might wonder, how does California compare with other states in that regard? By happenstance, as HJTA was preparing its report, an organization called Wallet Hub was offering an answer.

In March, Wallet Hub, a website devoted to consumer finance, released a study of what it calls “return on investment,” merging tax burdens with quality of services to develop an index that compares states on how efficiently they spend public funds.

The factors included in the service side of the equation include schools, roadways, hospitals, crime, water quality and poverty. Minnesota is scored as having the best services.

Unfortunately — but perhaps not surprisingly — California does not fare well in its “return on investment” score. In fact, it’s the fourth worst overall, just ahead of Hawaii, New Mexico and North Dakota. New Hampshire scores the highest, followed by Florida and South Dakota.

In services, California ranks 34th, but its tax burden, one of the highest in the nation, pulls down its overall “return on investment” score. Arch-rival Texas, incidentally, has the seventh highest return.

The HJTA report and the Wallet Hub comparison underscore an irritating aspect of governance in California — the eagerness of political officeholders to create new projects and services and their reluctance to evaluate whether their pet programs are delivering the promised results and intervene when they are falling short.

One of the cases HJTA cites, a high-tech budget tool called FI$cal, is a prime example of the syndrome. Hundreds of millions of dollars have been spent on FI$cal over the last decade and a half and it’s still not working. The state auditor has issued 18 reports critiquing the project’s management and performance but governors and legislators continue throwing money down a rathole.

Many other examples are obvious, some particular projects such as FI$cal and some broader issues such as homelessness. It’s very near the top of voter concerns, as measured in polls and California taxpayers have spent billions of dollars on it. However, the problem seems to be, if anything, growing more acute as politicians and supposed experts debate what might work.

Click here to read the full article at the Press Enterprise

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How California Taxpayers Weathered The Pandemic

March 22, 2022 By Jon Coupal 2 Comments

While few Californians weathered the pandemic unscathed, taxpayers took a particularly heavy hit, getting stuck for the longterm cost of relief payments, bailouts and fraud while losing earnings during the “two weeks to flatten the curve” that turned into two years.

If we had known in early 2020 what we now know, it is doubtful we would have shut down the economy as tightly as we did, and we certainly would have taken greater caution about our response to school closures and educating our children. Only now are we starting to comprehend that damage to child development, socialization and learning.

Taxpayers also took a hit by having to pay taxes and fees for services not received. Local governments required restaurants to continue to pay various licensing fees even when they were forbidden to be open for business. Parks, libraries and other public venues were closed to the public while citizens continued to get the tax bill to support those same facilities. Efforts by taxpayers and businesses to seek temporary relief from government exactions were mostly met with open hostility, while members of public-sector unions continued to receive paychecks and, in some cases, got raises even when they weren’t going to work.

But by far the biggest hit on California taxpayers during the pandemic was the jaw-dropping levels of waste, fraud and abuse of taxpayer dollars. On Gov. Gavin Newsom’s watch, the Employment Development Department (EDD) failed to process a backlog of claims for hundreds of thousands of unemployed Californians while sending out as much as $30 billion in unemployment benefits for phony claims, including fraudulent claims paid to death row inmates.

Click here to read the full article at the Whittier Daily News

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Proposition 13: Same Song, Different Decade

February 23, 2022 By Jon Coupal 4 Comments

More than 42 years ago, California voters overwhelmingly enacted Proposition 13 in response to out-of-control property taxes.

Even with the passage of time, Prop. 13 remains very popular among citizens of all political stripes.

Nonetheless, many politicians and bureaucrats hate Prop. 13 because it prevents them from taking unlimited cash from the taxpaying public.

Photo courtesy of Wendy McCormac, Flickr

In response to Prop. 13’s passage, these tax-and-spend interests retaliated by trying to create loopholes in Prop. 13 to bypass voter-approved taxpayer protections and provisions enforcing more government accountability. This has necessitated additional taxpayer protection laws to close these loopholes via more recent initiatives such as Proposition 218 (1996), also known as the Right to Vote on Taxes Act, and Proposition 26 (2010) which sought to stop taxes from escaping limitation by calling them “fees.”

In this tug of war between taxpayers and government interests, the latter has been aided by an increasingly progressive California judiciary which, in a number of recent decisions, demonstrates open hostility to taxpayers. As just one example, Prop. 13’s long-standing requirement that a local special tax receive a two-thirds vote of the electorate has been virtually destroyed by the infamous Upland decision which gave tax-and-spend interests a template on how to impose new taxes that, for 40 years, were illegal.

Click here to read the full article at Pasadena Star News

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California Is The Mad Scientist Of Bad Policy

February 10, 2022 By Jon Coupal 1 Comment

If these United States are 50 laboratories of democracy, then California is the mad scientist of far-left policies. That was evident last week as some of the session’s most controversial bills tried to clear the Assembly and continue through the legislative process.

From a bill to impose “sector-wide minimum standards” for wages, hours and working conditions at fast-food chains (that unfortunately passed the Assembly and now heads to the Senate) to forcing owners of rent-controlled apartment buildings to stay in that business for at least five years — even if they were losing money (that fortunately failed to garner enough support), the Legislature’s radicalism was on full display. But those measure were small potatoes compared to Assembly Bill 1400, which would have required the state to provide health care coverage for residents, after abolishing all private health insurance and Medicare.

Fortunately, AB 1400 also failed to get enough support in the Assembly to move on, but we’re likely to see it again. The state’s Democratic Party has added single-payer health care to its platform, and the Progressive Caucus of the California Democratic Party has vowed not to endorse any candidate that opposes single-payer health care.

That’s why it’s important to make clear why such a proposal should never be considered again. First, the taxes necessary to implement such a program would be astronomical. The author of AB 1400 proposed raising taxes by $163 billion dollars a year, but the actual cost could be upwards of $391 billion per year, according to the staff report from the Assembly Appropriations Committee.

Click here to read the full article at the Press Enterprise

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The Fight To Limit Taxation Continues

January 25, 2022 By Jon Coupal 5 Comments

Regular readers of this column undoubtedly know what Proposition 13 is, but they may not know it does more than set property taxes at 1% of the home’s market value with a 2% cap on annual increases. It also imposed certain vote requirements for other kinds of taxes, including a requirement that local special taxes receive a two-thirds vote of the electorate and a state tax increase proposed by the California Legislature receive a two-thirds vote of each house.

Photo courtesy of Wendy McCormac, Flickr

Government hates these constraints on taking other people’s money, so they constantly try to find ways around them — and they have. In the early 80’s, they hit upon “benefit assessment districts,” which historically had been used legitimately to fund capital improvements that directly benefited property. But over time, bureaucrats began imposing assessments for general municipal services rendering them indistinguishable from property taxes. The sole reason for this transformation was to avoid Prop. 13’s voter approval requirements.

That’s why the Howard Jarvis Taxpayer Association put Proposition 218 on the ballot in 1996. It gave the people the right to vote on all local taxes and required taxpayer (or ratepayer) approval of assessments and property related fees. But just like when you squeeze a water balloon too hard, it tends to pop out somewhere else, so it is with government avoiding clear voter intent. That’s why state business associations and HJTA are supporting the Taxpayer Protection and Government Accountability Act initiative to close some new loopholes recent court rulings have opened in Props. 13 and 218.

While the initiative is still waiting for a circulating title and summary from the attorney general, the fiscal analysis by the nonpartisan Legislative Analyst’s Office was released last week and it’s instructive in explaining the tangled web of taxes our government weaves.

Click here to read the full article at the San Gabriel Tribune

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