The Truth About Prop 133 min read

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The 30th anniversary of Prop 13 has brought out a raft of commentary in the state media. This commentary tends to split on whether Prop 13 benefited or hurt the state – as if there is still any doubt that it was a disaster – but it rarely examines some of the underlying assumptions of Prop 13, and even more rarely does it explore the deep inequality it has enshrined into our state.

Much of this stems from a fundamental misunderstanding about what Prop 13 was and what it did. Voters convinced themselves it was a populist revolt against rising property taxes. They believe this so fervently that they act as if they willed it into existence.

In fact Prop 13 was an extremist attack on the very practice of state government by a group of far-right activists, with property taxes used as a convenient cover. Those who voted for – and who say they would vote for it again – still seem to believe its primary purpose was to protect homeowners, when its true goal was to destroy public services by starving government of revenue – otherwise why include the 2/3 rule? Why give commercial property the same protection as homeowners?

Further, there seems to be widespread misunderstanding about the level of taxation – especially property taxation – in California. California ranks 38th in property taxes. Somehow homeowners in the 37 states ahead of us haven’t been losing their homes to taxes. One consequence of Prop 13 was a shifting of taxation to sales and income taxes – sales taxes are regressive and income taxes can be volatile. Prop 13 is therefore directly responsible for California’s regressive and unstable budgeting. No Prop 13, no structural revenue shortfall.

Dan Weintraub argued that Prop 13 didn’t devastate government finances. But does he even read his own paper? Peter Schrag pointed out in the California Progress Report last week that Prop 13 did have that devastating impact:

“California’s per pupil school spending, which was among the top 10 states in the 1960s, is now among the bottom 10. Proposition 13 alone is not responsible, but along with two major court decisions that preceded it, it helped decouple school funding from the local tax base and thus undercut voter incentives to fund education generously, as it had been in the generation after World War II. Our roads, once a national model, are an embarrassment. …

“California once had a communitarian ethic. That’s been turned into a market ethic. It once did serious planning for the future. For now, that’s a nearly forgotten hope.”

Prop 13 helped create a “homeowner aristocracy” – where those who bought their homes before 1976 are given preferential treatment and tax shelters while everyone else has to pay market rates. Some argue that those on fixed incomes deserve protection from rising tax bills, but it is difficult to have sympathy for this when the method of protecting them – Prop 13 – has produced a generation of inequality that leaves most folks under 35 unable to ever own a home in California.

Why should some homeowners get government subsidies and others do not? Why is it that under Prop 13 we protect some homeowners at the expense of future generations? If we are to right the state’s finances, provide economic security for all Californians, deal with the energy price and global warming crisis, and have a competitive 21st century economy, we need to reexamine our priorities, and be willing to move past obsolete 1970s faux populism.

Robert Cruickshank is a historian, activist, and teacher living in Monterey. He is a contributing editor at Calitics.com and works for the Courage Campaign, in addition to teaching political science at Monterey Peninsula College. Currently he is completing his Ph.D. dissertation in US history, on progressive politics in San Francisco in the 1960s and 1970s. A native Californian, he was raised in Orange County and educated at UC Berkeley.

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