California’s iconic property tax limit, Proposition 13, has survived attempts to repeal or change it for 44 years, but a new study claims that it’s a racist tool and calls for changes.
It’s amazing, in a way, that as California’s politics drifted leftward over the past several decades, the iconic symbol of its once-conservative mien, Proposition 13, has remained intact.
Overwhelmingly passed by voters in 1978, Proposition 13 froze property tax rates (1% plus bonds) and limited the growth of taxable values to 2% a year as long as property did not change hands. It also made it more difficult to enact new taxes of any kind, either by politicians or voters.
Like all tax policies, Proposition 13’s provisions were arbitrary. With property tax bills soaring at the time due to high inflation, anti-tax gadflies Howard Jarvis and Paul Gann, saw an opportunity and took it, overcoming fierce opposition from leaders of both political parties and those who disliked the notion of tax and spending limits.
Proposition 13’s critics widely assumed that it would be temporary because either the courts would invalidate the measure or voters would repeal it. Neither happened. Both the state Supreme Court and the U.S. Supreme Court upheld its constitutional validity and in subsequent years, voters bolstered its provisions.
The state’s leftward turn in the last quarter-century has spawned new efforts by those who detest Proposition 13 — public employee unions and other advocates of additional spending — to modify or repeal it, but so far they have been unsuccessful.
Opponents believed that the most salable change would be to remove property tax limits on commercial property, while leaving them in place for houses and other residential property. They chose 2020’s presidential election, with an anticipated heavy turnout of anti-Donald Trump Democratic voters, as the most favorable venue. However, they couldn’t make the sale for a “split roll” and Proposition 15 was defeated, albeit not by a wide margin.
So what’s next in the perpetual battle over Proposition 13?
Last month, some left-of-center academics ginned up a new study framing Proposition 13 as a racist tool because white and Asian homeowners allegedly receive disproportionately high benefits from its limits vis-à-vis Black and Latino Californians.
“Generations of Californians have been harmed by this policy – especially Black and Latino Californians, those with lower incomes, and those with less property wealth,” the study declares. “The policy has benefited older generations of Californians at the expense of those who have followed.”
The income and wealth disparities among Californians are well-known and regrettable but they they stem from multiple reasons that have nothing to do with Proposition 13, as the study, conducted for and released by the Berkeley-based Opportunity Institute, alleges. White homeowners benefitted heavily from property tax limits because they were more likely to be homeowners in the first place.
The study essentially catalogs a bunch of social ills that emerged after Proposition 13’s passage and attempts to tie them to the measure — guilt by chronological association, one could say. But the effort is undercut by one revealing paragraph:
“We find that housing-wealth disparities have widened. Although we cannot causally connect these patterns to Proposition 13, they nonetheless paint a troubling picture of disparities that undercut California’s values related to equal opportunity for all.”
So on one hand it blames Proposition 13 for disparities and on the other says it “cannot causally connect” them to Proposition 13. That qualifies as intellectual dishonesty — starting with a conclusion and then cherry-picking data to make its case.
The study concludes that “scholars, public finance experts, local leaders, and movement builders should collectively determine what it will take to overcome political and taxpayer resistance to changing Proposition 13 and other policies that constrain taxation and budgetary decision-making in California.”
That statement is also revealing. The study’s real goal is getting more tax money to spend, not righting some moral wrong that it cannot convincingly prove.