Commentary: Proposition 13 turns 40, may face mid-life crisis

This year is the 40^th anniversary of Proposition 13, the iconic property tax limit measure that California voters overwhelmingly endorsed in 1978.

It’s only a slight exaggeration to say that it’s also the 40^th anniversary of efforts to repeal or alter Proposition 13’s provisions, and those on the left side of the political ledger – unions, particularly – may be trying once again this year to undo it.

An initiative awaiting clearance for signature-gathering would create a so-called “split roll,” preserving Proposition 13’s property tax limits for homes and residential rental units, but removing them for other commercial and industrial properties.

The up-front proponents are such good government groups as the League of Women Voters, which contend that the state’s schools and local governments are seriously underfunded.

Standing in the shadows, however, are public employee unions which would benefit from having more money flowing to schools and local governments, especially since their budgets are being squeezed very hard by fast-rising pension costs.

How much more?

The Legislature’s budget analyst, Mac Taylor, estimates that a split-roll could generate net annual revenues in the $6-10 billion range.

Those are big stakes and while the unions could spend millions of dollars on a campaign to pass the measure, the business interests that would be paying more property taxes have even deeper pockets. After all, spending even $50 million to defeat a split-roll measure would be pocket lint in comparison to the multi-billion-dollar stakes.

So, if the split roll measure makes it to the ballot, it would likely be one of those massively expensive ballot measures for which California is famous, or infamous.

Proponents would pound on providing more money for schools, which, polling tells us, are the most popular thing that government does. That was the theme of two successful ballot measures that raised income taxes on the wealthiest Californians in 2012 and 2016, and in fact per pupil spending has increased by 66 percent in the last seven years.

Opponents will raise the spectre of undoing Proposition 13, which has consistently enjoyed high voter approval in polling over the last 40 years, arguing that if commercial property is hit with tax increases, homes will be the next target.

They also would point out that despite Proposition 13’s restrictions, property tax revenues have increased 12-fold since it was passed due to new construction and reassessment when properties change hands.

Finally, they may also contend – with a factual basis – that the extra money wouldn’t mean better schools and local government services, but rather would shore up pension funds that face huge unfunded liabilities.

So would California voters endorse a split property tax roll? Recent polling indicates that its proponents would face an uphill battle.

The Public Policy Institute of California has tested the issue periodically and once found a fairly strong level of support among likely voters, but the most recent PPIC poll found it had slipped from 60 percent in 2012 to 55 percent in 2015 and just 46 percent now.

One rule of the thumb about contentious California ballot measures is that they must begin with strong support, well over 50 percent, if they are to have a chance of prevailing against well-financed opposition, so 46 percent is a very weak starting point.

In years past, split-roll advocates have loudly announced campaigns for it, only to quietly throw in the towel when it became clear they had little chance of winning.

Ultimately, therefore, the 40^th anniversary of Proposition 13 may be a whimper, instead of a bang.