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CALIFORNIA COMMENTARY (Column)
Sore Losers
By JON COUPAL
(The writer is an attorney and president of the Howard Jarvis Taxpayers Association.)
As children we are told to be good losers. Good sportsmanship compels us to congratulate the winner and take pride in having competed.
But some losses are harder to take than others. Four years ago, taxpayers suffered a painful defeat with the passage of Proposition 39. But unlike a sporting event where past defeats are only reflected in the record book, the passage of Proposition 39 continues to inflict injury to taxpayers. The latest information on bond passage rates and their costs bears this out.
Proposition 39 was the second attempt in 2000 to make it easier to increase property taxes to pay for school bonds. The first, Proposition 26, would have lowered the vote to pass these bonds, which only property owners are privileged to repay, from two-thirds to a simple majority. Against a $25 million campaign, under-funded taxpayers, who were outspent 20 to one, prevailed. More than 51 percent of voters rejected the slick advertising paid for by Proposition 26’s wealthy promoters.
Undeterred, and with almost an unlimited supply of money provided by a handful of multimillionaires and billionaires from the Silicon Valley, tax raisers came back with Proposition 39 which lowered the two-thirds vote to 55 percent. This initiative was filed with state officials less than three weeks after the taxpayer victory against Proposition 26. But this time, after a $34 million campaign that never once mentioned the word “taxes,” the proponents were able to convince enough voters that the measure was really about “accountability.”
The latest figures on the passage of local school bonds demonstrate dramatically how the chickens have come home to roost.
The adverse impact of Proposition 39 was clearly shown in the March 2004 elections by the large number of bond measures that passed with less than a two-thirds vote. In fact, only 25% of the bond measures on the March 2004 ballot received two-thirds vote support. The median “yes” percentage of only 61.7% was one of the lowest ever recorded.
While $7.96 Billion in local education bonds passed during the March 2004 election, only $674 million of that amount—less than 10%—cleared the two-thirds vote hurdle!
Cumulatively, about $30 billion in local education bonds have passed since the passage of Proposition 39 in November 2000. This includes some $17 billion in local education bonds that passed with less than a two-thirds vote, and thereby were directly affected by the passage of Proposition 39. Overall, 40% of the local education bond measures have been impacted by the passage of Proposition 39 (i.e., the percentage of measures that passed with less than a two-thirds vote).
Since 1996, local voters have approved a whopping $45 billion in local education bonds with $28 billion of that amount clearing the two-thirds vote hurdle. Although, massive amounts of debt would still have been incurred—and we haven’t even been considering interest, which nearly doubles the obligation—if the two-thirds vote requirement had remained in effect, the system would be fairer.
Those who recoil at the thought of the two-thirds vote, considering it to be “undemocratic,” should remember that with local bonds we single out a minority of the population to pay the entire amount. Hardest hit are single family homeowners because there is no one onto whom they can pass their increasing costs for taxes. Yet in spite of this, local voters had been generous. In the five years prior to Proposition 39, local school bonds were passing at a 63 percent rate.
As more and more new bonds are added to tax bills, the need for providing homeowners with effective tax relief grows as does the number of voters who will support it.
Although the wealthy sponsors of Proposition 39 say they are willing to spend millions to defend it, even they may not be able to contend with the rising anger among homeowners as each election cycle adds significantly to their property taxes. This is especially true as the vaunted “accountability” in education that was promised by the backers of Prop. 39 has yet to materialize.
The core taxpayer protections of Proposition 13 remain intact and remarkably effective even after 26 years. But the growing number of bonds and other “add-ons” to the property tax bill continue to chafe at homeowners. Some form of additional tax relief is inevitable.
Whether it will be a reversal of Proposition 39 or some other relief remains to be seen.
Copyright 2004, Metropolitan News Company