After all these years, liberals are still wrong about Proposition 13

Howard-JarvisForty years ago this week, California voters began the modern tax revolt movement that spread across America like wildfire. The idea that citizens could take back control from an overreaching government helped to propel Ronald Reagan to the presidency. Reagan, who had a close friendship with Howard Jarvis, took his message of limited government to Washington and his message of freedom to the world.

Proposition 13 cut property taxes, put limits on their rise, and toughened the requirements for passing other tax increases. It passed overwhelmingly in June 1978, and ever since, liberals have failed to acknowledge how wrong they were about it — both in terms of politics and policy.

Two months before the vote, California’s then Gov. Jerry Brown (version 1.0), was quoted in the New York Times as saying “I don’t think there is one credible observer who thinks Proposition 13 will endure over the long period.” Forty years later, it’s Brown who is heading into the political sunset while Proposition 13 continues to protect grateful California taxpayers.

So-called “experts” were also wrong in their dire predictions about the harm that would be inflicted on California if Prop. 13 were to pass. One of the TV commercials run by the well-funded opposition campaign featured a doom-saying UCLA economist who predicted that California would be plunged into a deep recession if voters approved the measure. But in the years immediately following passage, California had an extraordinarily booming economy.

Progressives like to perpetuate another falsehood about Prop. 13 in their ceaseless efforts to divide and conquer the taxpayer coalition that supports the law. They seek to target the owners of business properties who, like homeowners, benefit from predictable taxes under Prop. 13. A false argument is advanced that during the 1978 campaign, voters weren’t told that Proposition 13 protections would be extended to business properties as well as homes.

This simply isn’t true.  The opponents of Prop. 13 themselves repeated that fact throughout the campaign and, specifically, in the official ballot pamphlet.

Perhaps the granddaddy of all lies about Proposition 13 is how it “destroyed education” in California. This falsehood is repeated so often and with such vigor that it is accepted as established fact by liberal elites and mainstream media. For example, just a couple of weeks ago, Sacramento mayor and former Senate leader Darrell Steinberg blamed Prop. 13 for “years of cutbacks to arts funding in public schools.” This despite record revenues being pumped into education. …

Click here to read the full article from the L.A. Daily News

What Has Howard Jarvis Done for Me Lately?

Howard-JarvisMany of those under 50 do not remember tax revolt leader Howard Jarvis, who passed away 30 years ago, and yet, perhaps unknowingly, they are benefiting from his legacy. Proposition 13, which limits property taxes and allows local voters to have the final say on new taxes, was Howard’s gift to all Californians.

By limiting annual increases, Proposition 13 makes property taxes predictable from year to year. This doesn’t just benefit senior citizen homeowners on fixed incomes who worry about losing their homes to the tax collector. It benefits all homeowners. For example, a family who bought their home just five years ago in 2011, at the typical price that year of $286,000, has already seen significant tax savings. Today, the median sales price is close to $509,000 according to the California Association of Realtors. That’s a 79 percent increase. Under the property tax system that preceded Proposition 13, which was based on current value, the family who bought their home in 2011, would see their property taxes nearly double in a few short years.

Without Proposition 13, that family who struggled to buy a home in the first place, would find themselves struggling to keep their house in an overheated real estate market. Because of Proposition 13, which limits annual assessed value increases to two percent and then applies a tax rate of one percent to the total, the family will pay $3,084 this year, not $5,090, which would be the case if there were no limit on annual increases.

But even this example understates the importance of Proposition 13 to the average property owner. You see, before Proposition 13 imposed a one percent tax rate, the statewide average was 2.6 percent — in some counties it was as high as four percent. So, without Proposition 13, our recent home buying family would actually be paying $13,234 in annual taxes.

The old system guaranteed constant increasing revenue to government but did not take into consideration property owners’ ability to pay.  Even when home values declined, there was no relief for taxpayers because county boards of supervisors, city councils and local special districts could arbitrarily raise the tax rate to raise revenue.

Proposition 13 was designed to make property ownership secure for all Californians. But Howard Jarvis also wanted to make sure that the Legislature, which refused to provide tax relief when average folks were losing their homes, did not come back with new ways to punish taxpayers. The measure also requires a two-thirds vote of state lawmakers to increase state taxes and provides voters the final say on new local taxes.

Government employee unions, left wing progressives and even crony capitalists who all opposed Proposition 13 when it was on the ballot, are still complaining. They point to all the money that government has been denied because of Proposition 13 and claim that problems ranging from poverty to academic performance are due to the measure’s passage. Of course, these accusations fly in the face of facts. Even with Proposition 13, California ranks in the top 6 of all 50 states in per capital tax burden, and, according to the Department of Labor, we have the highest paid state and local employees. Add to this, after adjusting for inflation, we spend more money per pupil than prior to Proposition 13.

Those who do not remember the Tax Revolt of 1978, will be interested to know that much of the voter anger that fueled the passage of Proposition 13 was directed at insiders who benefited from the status quo. This frustration with members of the political class and their powerful special interest allies is very similar to what we are seeing in America, today.

After the passage of Proposition 13, Time Magazine featured Howard Jarvis shaking his fist on the cover of their June 19, 1978 issue. Howard went on to chronicle his 16-year effort to reform taxes in his book, I’m Mad as Hell. If he were with us today, he would be the foremost critic of government that is run for the benefit of insiders and ignores the concerns of average citizens, like those who lived in fear of losing their homes before Proposition 13.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally published by the Howard Jarvis Taxpayers Association