Exporting Proposition 13

Friday, March 26, 2004

Page 7

CALIFORNIA COMMENTARY (Column)

Exporting Proposition 13

By JON COUPAL

(The writer is an attorney and president of the Howard Jarvis Taxpayers Association.)

Proposition 13, believe it or not, is coming up on its 26th Birthday. And with the vigor of a typical 26-year-old it continues to protect California homeowners against excessive taxation. Despite constant attacks by the tax-and-spend lobby, the core of Proposition 13 remains the same: California property owners pay a maximum one percent tax rate and their assessed or “taxable” value of property may increase only two percent per year.

The philosophy of limited taxation inspired by Proposition 13 author Howard Jarvis was not limited to the confines of California. Indeed, Proposition 13 is acknowledged to be the beginning of the modern tax revolt movement and its core values of limited government and individual freedom spread to other states and ultimately to Washington with the ascendancy of Ronald Reagan. From there, democracy and, yes, tax relief, were extended to nations which had for decades experienced only collectivism and oppression.

Immediately after the passage of Proposition 13, states such as Colorado and Oregon passed their own versions. Usually, the effectiveness of these measures was in direct relation to the strength of the state’s initiative power.

Citizens in states that permit changes to their constitution via the popular initiative are usually in a much better position to impose meaningful control over government than residents of those states that allow only statutory changes by initiative. Why? Most state constitutions have provisions delineating the structure and methodology of taxation and unless citizens have an avenue for reaching the core of the law on which all others are based, the options for tax relief are limited.

The exportation of Proposition 13 continues. Both Texas and Maine are considering proposals to limit property taxes. In Texas, Governor Rick Perry has proposed that increases in the taxable value of homes be limited to three percent per year. This is significantly greater protection than the ten percent limit now, and comes close to Proposition 13’s benchmark two percent annual assessment limit. Perry’s plan also has a spending limit for local government by limiting the expenditure of property taxes to last year’s limit plus inflation and population.

In the northeast corner of America, the Maine Taxpayers Action Network has proposed a virtual copy of Proposition 13: A one percent rate cap, a two percent limit on increases in taxable value, an exemption for bonded debt and a reassessment upon change of ownership. A potential hurdle for this measure, however, is that its opponents are saying that it violates the Maine constitution which requires taxes to be “equalized” in proportion to value of the property. Nonetheless, voters will soon have the opportunity to have their say.

In both Texas and Maine, proponents have requested guidance from the Howard Jarvis Taxpayers Association on both political and policy issues. Their main problem? A hostile media and spending lobby which claim that these proposals are too much like Proposition 13 and, as “everyone knows,” Proposition 13 decimated California.

In other words, voters in both Texas and Maine are being subjected to the “doom and gloom” predictions of our adversaries who don’t want to loosen their grip on the taxpayers’ wallets. There’s just one problem with these predictions. They are based on the false premise that Proposition 13 hurt California. But as John Adams noted, “facts are stubborn things” and the facts are clear: California experienced unprecedented economic growth in the years following Proposition 13’s passage. Moreover, schools did not close, fire departments still put out fires and libraries stayed open. Today, California governments at all levels, even after adjusting to inflation and population growth, have more money than prior to the passage of Proposition 13.

California homeowners may wonder why they should care about what happens in Texas and Maine. After all, few people here own real estate in these other states. But these debates are important to us in California. Any time a state embraces real property tax relief, it is a victory of property owners everywhere. It adds to the competition among states. It gets homeowners comparing their tax bills with their friends and relatives in other states and has them asking “Why am I paying so much?” And, of course, tax relief and economic growth—even in other states—benefits all citizens of this unified economic entity called the United States.

Howard Jarvis and millions of Californians passed Proposition 13. Proposition 13 was a cornerstone of the Reagan Revolution. Internationally, the Reagan Revolution brought down the Berlin Wall and the Evil Empire, while here at home Proposition 13 remains an effective tool for bringing down walls and empires established by those who attempt to govern without concern for the taxpaying masses.

Let’s export Proposition 13 every chance we get.