Posted by
Playful Walrus on Wednesday, July 01, 2009 7:00:00 PM
More than ever, California’s Prop 13 is being attacked by politicians, Big Labor, and news media types.
Fortunately, Jon Coupal, President of the Howard Jarvis Taxpayers Association, is doing what he can to speak up against these attacks. He recently published "Prop. 13: Will It Be the Victim of Its Own Success?"
In order to "solve" California's massive budget crisis, the tax-and-spend lobby and left-leaning academics are again suggesting that we revise Proposition 13, which changed the state's tax structure in 1978 by lowering property tax rates and limiting annual increases.
Ironically, these new efforts to change the highly popular initiative are based, not on the argument that Proposition 13 has failed California, but on the grounds that Proposition 13 is working precisely as intended.
California's budget problem is a result of unrestrained overspending coupled with unstable sources of revenue.
The state government workforce has grown significantly faster than state population. The state budget has grown faster than inflation and population. The spending has been too high for too long.
He goes on to write that Prop 13 has actually been the government's friend.
While income tax and sales tax revenue are way down by double digit percentages, property tax revenues have simply flattened out, notwithstanding dramatic drops in market value. True, some counties will see slightly larger drops in revenue than others, but some counties will actually see increases in property tax revenue. There are few places in all of America which can make that claim.
So while Big Government promoters bemoan Prop 13 for not allowing them to boost property taxes faster, the fact is that Prop 13 has actually helped keep tax money coming in.
Here is the real irony. Our sales tax and income tax system has evolved over many years in ways dictated by our political elite and smartest policy advisors. Thus, the volatility that we now complain about has been brought to us by people who are oh so much smarter than the rest of us. Proposition 13, on the other hand, was sponsored by two relatively simple men, Howard Jarvis and Paul Gann, who were seeking, first and foremost, just to protect homeowners.
The increased spending advocates constantly bemoan that there is a 2/3rds requirement to raise taxes. Yet, this has hardly prevented "necessary" tax increases, or even the huge tax increase worked out earlier this year. Los Angeles County voters recently agreed to a half-cent sales tax increase, bringing the countywide sales tax to 9.75% as of today, with some cities as high as 10.75%. Certain cities have recently been able to pass parcel taxes for their schools.
We have a high statewide rates for our sales tax, gas tax, personal income tax, and business tax. We have utility taxes. We have various sin taxes. We have a lottery.
Yes, our property tax rates are moderate in comparison to other states, but the taxes are based on property values, and property values tend to be higher in California, so the tax revenue is still high.
We have enough taxes. We have high enough taxes. Even San Francisco rejected the recent attempt to extend recent tax increases for two more years.
Our problem is spending. California resisted the welfare reform of the 1990s, and now has a widely disproportionate percentage of the welfare cases nationally. We have millions of unskilled, poor, dependent illegal aliens and their children in our schools in our justice and correctional systems, using our infrastructure and utilities. We have a ridiculous higher education system funded by taxes, consisting of ubiquitous community colleges, state universities, and many University of California sites. We have taught the poor, the elderly, the sick, the pregnant, children, and students of all ages to be dependent on state programs. We pay too much per prisoner in comparison to other states. We have the highest paid teachers in the nation.
We need to cut waste, cut fraud, stop guaranteeing unreasonable benefit and retirement packages for government employees, stop doing things that should be left up to the private sector, and stop encouraging the dependent to come here from other states and countries to become de facto wards of our government.
Unfortunately, Big Labor - especially government employee unions - have the legislature on a leash, and can spend scores of millions of dollars on media campaigns. Big Labor gets its funding from compulsory membership and compulsory dues, meaning workers need to jump through hoops to (supposedly) keep their money from being used as part of the political machinery perpetuating a system that is geared towards increasing the number of dues payers (government employees) and increasing the dues they pay via pay increases.
I would very much prefer California to be split, with the portion in which I reside becoming a "right to work" state, with Prop 13 and the 2/3rds requirement intact, a part-time unicameral legislature, and a restriction on any new bonds that bonds will only be used to fund major public works projects.