Myth of Prop. 13 busted

A fundamental myth of Proposition 13 has been laid to rest. 

The First District Court of Appeal this summer ruled that local voters can adopt a tax to fund specific programs by a simple majority, not a two-thirds supermajority. And last month, the California Supreme Court preserved the people’s right to direct democracy by upholding the appellate court’s opinion, which validated San Francisco’s Proposition C. 

Proposition C was adopted in 2018 by more than 60% of the vote to fund homeless programs. Voters mandated that funds from the Proposition C tax would be allocated to secure permanent housing for homeless people, mental health services, services for people who have recently become homeless or are at-risk of becoming homeless, and to secure short-term shelter and hygiene programs. 

The California Business Roundtable, the California Business Properties Association and the Howard Jarvis Taxpayers Association unsuccessfully attacked the validity of Proposition C in the trial and appellate courts. 

Ironically, Proposition 13 and Proposition C are both intended to fight homelessness.  Proposition 13 was intended to cap property taxes, making housing affordable.  Proposition C addresses horrific conditions of poverty and public health faced by the homeless by, among other programs, making housing available.

The appellate court decision was rooted in the 1911 amendment to the state Constitution that granted voters legislative authority over politicians who were swayed by powerful interests. It is a cornerstone of the Progressive Movement of the late 19^th and early 20^th centuries that led to, for example, women’s suffrage, the direct election of U.S. Senators and the federal income tax. 

Proposition 13 was intended to attack “spendthrift politicians and powerful special interests.”  Ironically, the Proposition C litigation demonstrates that “powerful special interests” will push the myths of Proposition 13 and Proposition 218 to absurd ends to justify a two-thirds vote requirement on voter initiatives that propose taxes to fund specific programs.  

The anti-tax groups promoting the tyranny of the minority in courts are challenging taxes passed by a majority of local voters for homeless programs, education, childcare and parks. The San Francisco City Attorney attacked their anti-democratic position even prior to Proposition C.

In reacting to the state Supreme Court’s decision, the president and CEO of the California Business Properties Association, said to Law360:  “They have unleashed the gates of tax hell.”  Far from creating “tax hell,” the Supreme Court’s rejection of the Petition for Review sustained the constitutional purpose Progressives had for the initiative power when they reserved legislative power in the people.  

The organizers of Our City Our Home are far from powerful special interests. They worked for years to secure adequate funding for homeless services despite insufficient action from elected politicians. Now, with majority approval, Proposition C will make almost $500 million available to address poverty and public health crises of homelessness that have only been exacerbated by COVID-19 and the dangerous air quality engulfing the Bay Area as a result of the recent wildfires.  

The Proposition C campaign triggered a debate about social responsibility, tax policy and progressive capitalism. Mark Benioff, the CEO of Salesforce, was attacked by the business community for his outspoken support of Proposition C.  Last year in the New York Times, Benioff argued for a “new capitalism” that “must also include a tax system that generates the resources we need and includes higher taxes on the wealthiest among us.”

In the short run, the legacy of Proposition C and the courts’ rulings will begin during the 2022 election cycle when community groups throughout the state have a clear path to ask voters to fund infrastructure and social services by majority vote to redress the consequences of income disparity and systemic racism, promote justice and equality, and address public health and environmental crises.  

_____

Related commentary: How Prop. 13 gave California’s richest corporations a multibillion-dollar tax break they didn’t want