California can’t afford to keep Prop 13 loopholes open when billions of dollars are on the line

I have fond memories of growing up in the suburbs of Los Angeles in the 1970s. The weather felt perfect. Yes, there were hot days, but you could look forward to perfect summer nights. Public schools felt relatively new, which they were, and there were open spaces yet to be explored. 

Though there was a new danger every week on the news, I somehow felt safe tumbling around, untethered, in the back of my parents’ station wagon. 

The state’s transformation over the last 50 years has been mind boggling. You likely would have been laughed out of most rooms in the ‘70s for predicting that California would become the fourth-largest economy on earth, behind only the United States, China and Germany. 

Innovations forged here reshaped how the world works. And yet, state and local governments failed to keep up.

The population nearly doubled, but we did too little to house these new Californians. We made some gains in public schools after short-sighted disinvestment during the 1980s and ‘90s, but we still struggle with achievement gaps across race and class.

We set conditions for technological invention but do too little to mitigate an exploding wealth gap that would make the Gilded Age blush. And we’re nowhere near ready to manage an AI-driven economic transition, let alone the increasing severity and cadence of climate catastrophes. 

The favorite bogeyman, though, is bureaucratic intransigence, sometimes called one-party rule. But we should be clear the problem isn’t partisanship or a lack of imagination — it’s structural and goes back to the 1970s. 

Proposition 13 was sold in 1978 as a way to save grandma’s house from unpredictable property tax bills. It also became a permanent discount for wealthy, corporate property owners. 

Under the proposition, homeowners pay taxes based on market value when they bought their homes, rather than on current values. And that’s fine. But since Prop 13 passed, high-priced tax attorneys have leveraged loopholes in Prop. 13 to let commercial and industrial property owners avoid property reassessments and higher taxes when their property changes hands. 

The result: billions of dollars in lost tax revenue.

USC researchers recently estimated that as much as $25.1 billion more could be collected per year by state and local governments if California closes Prop. 13’s commercial and industrial loophole and those properties are assessed at their current fair-market values.

Think of all we could do with those resources if we told wealthy corporations, after 50 years, that the party’s over.

California is about to need every dollar it can raise. 

President Donald Trump’s signature legislation, dubbed the One Big Beautiful Bill, takes healthcare and food aid from working families and hands the money to the wealthiest Americans.

Roughly 2 million Californians will fall off Medi-Cal by 2028, and nearly half a million are now being shoved off CalFresh. The state now has to cover a deficit of more than $20 billion a year.

And again public school districts up and down the state are struggling with empty coffers and potential layoffs.

Often big wins get lost in a bureaucratic wilderness, and cynicism rises among voters who are legitimately hurting.

But when we focus, we can get it right — like when the state offered all 4-year-olds an extra year of education by adding transitional kindergarten to public schools. This is a concrete, visionary program that protects the pocketbooks of California families while increasing trust in government.  

Now the Legislature and next governor have a rare political window. They can refill the federal breach and create a version of government we all want and need. The goal is not to restore California to 1970, but to build what will get us to 2070.

Until they seize this chance, the whole state is like me as a kid in the back of that station wagon: No seat belt. No headrest. Nothing to hold on to. 

Just sliding around, bracing for whatever comes next.