Debate over Prop. 13 still rages

Sac Bee ^ | 6/1/03 | John Hill

[NormsRevenge]

As Proposition 13 approaches its 25th anniversary, California's landmark anti-tax initiative continues to be blamed by public policy experts for everything from unsightly blooms of auto malls to lackluster schools.

But in a February poll by the Public Policy Institute of California, 57 percent of respondents said they thought that Proposition 13 has turned out to be "mostly a good thing for California."

[NormsRevenge]

Prop. 13 Ping

[NormsRevenge]

From the Sac Bee deputy editorial page editor.

Mark Paul: How Prop. 13 fostered sprawl, congestion

By Mark Paul -- Bee Deputy Editorial Page Editor
Published 2:15 a.m. PDT Sunday, June 1, 2003

This week, California celebrates the 25th anniversary of the big bang of the growth control movement. That's not how we commonly think about Proposition 13, the Jarvis-Gann initiative passed by the state's voters in June 1978. We remember it as a tax revolt, which, of course, it was.

But the citizen activists of the mid-1970s wanted more than just lower property taxes. Many crusaders who formed homeowner associations, stormed public meetings to protest soaring property taxes and manned card tables at shopping centers to collect signatures on petitions had achieved their political skills by way of fighting anti-growth battles in their communities, points out Clarence Lo, sociology professor at the University of Missouri and author of "Small Property Vs. Big Government," a study of the movement that led to Proposition 13.

"When the property tax hit, they were ready to galvanize into action," he says.

They wanted control over the future in a state that had more than doubled its population since 1950, adding more people than lived in all of New England. They wanted to protect their neighborhoods against the intrusion of apartment houses and condos.

They wanted the freeways to flow freely again and the hillsides to remain as golden fields dotted with green oaks. They wanted their tax dollars to bolster their neighborhoods with the same high quality of services that had originally drawn so many of them here.

And so they ignored the state's top elected leaders, both Republicans and Democrats, and the well-funded opposition campaign mounted by the California Taxpayers Association and the state's biggest businesses, which told them passage of Proposition 13 would destroy public services and endanger California's future economic growth.

They turned away from the optimistic creed of growth and investment that had made California the envy of the nation in the 1950s and 1960s. Instead of building a better future, they wanted to conserve the quality of life they had already built.

"Save the American Dream: Yes on 13," one of their slogans read.

It hasn't exactly worked out that way.

Yes, Proposition 13 brought down property taxes for homeowners who, in 1978, had gone through round after round of soaring assessments but had received no relief from local officials or state government. And it delivered certainty. Homeowners needed and deserved that protection.

But the measure has also turned out to be the poster child for unintended consequences. Far from ending growth, as many of the measure's supporters hoped, the constraints of Proposition 13 and the state's adjustment to it have made growth less manageable.

The big reduction in the property tax and the subsequent state shift of the property tax to schools has severed the old link between growth and services.

Attracting a major employer or building a new neighborhood used to provide community wealth. The revenues from growth would not just pay for the basic services needed by the newcomers, but also help fund amenities that created a better quality of life for everyone: parks, museums, concert halls.

But now, the only growth that pays for itself in taxes is retail, which throws off local sales tax. That's why citizens opposed to having affordable housing in their communities can make a plausible, and often winning, argument that the new units will hurt local finances. Cities chasing sales tax dollars have propelled retail development on the periphery of regions, accelerating sprawl. As a result, we get imbalanced communities and more driving, smog and congestion.

Proposition 13 also put the developers in control. Communities with adequate tax resources can direct growth by building infrastructure. Since Proposition 13, communities have had to shift to paying for infrastructure out of fees, exactions and financing districts that come from new projects themselves. That puts more of the power to dictate the location, timing and composition of growth in the hands of developers. Planners and elected officials are beggars, not choosers.

"The irony of Prop. 13 is that if you are really going to manage growth, you need government," says Lo. "That's the problem with Prop. 13. It kicked a hole in the side of government. There's now a whole lot less in its toolbox."

The other irony involves housing. Proposition 13 was written and passed in the name of protecting the ability of ordinary people to afford to live in their homes. Yet one unintended effect of the measure has been to make housing less affordable than ever.

As economists Steven Sheffrin of UC Davis and Terri Sexton of California State University Sacramento have shown, lower property taxes drive up the market price of housing. Sheffrin's research also demonstrated that the fees placed on new construction in the wake of Prop. 13 raise prices of both new and existing homes in many instances.

Perhaps most important, the twisted set of tax incentives makes cities reluctant to approve enough new housing, resulting in what housing experts Dowell Myers and Julie Park at the University of Southern California call "the great housing collapse." A smaller share of Californians own homes today than in 1960, and the state's homeownership rate is the third lowest in the country.

In 1978, the slogan "Save the American Dream" expressed a desire for collective action to protect shared community values. But in politics, there's often not much distance between noble goals like that and another Proposition 13 slogan: "Vote for yourself! Vote for Proposition 13!" The next generation of the growth control movement will define itself by how well it knows the difference.

Mark Paul, The Bee's deputy editorial page editor, can be reached at mpaul@sacbee.com or (916) 321-1907.

[NormsRevenge]

And then,, There is this!

	North Natomas construction work is reflected in a mirror loaded on a truck. North Natomas residents pay the highest property taxes, infrastructure fees and special assessments in the city, and developers say the fees they pay increase home prices by tens of thousands of dollars. Sacramento Bee/Brian Baer

Impacts less dire than city feared

Sacramento stayed afloat by using new revenue sources and voter-approved taxes.

By Tony Bizjak -- Bee Staff Writer
Published 2:15 a.m. PDT Sunday, June 1, 2003

A sense of doom permeated Sacramento City Hall. Proposition 13's ballot box victory in June 1978 had just cut the city's top revenue source -- property taxes -- in half.

"I made a speech or two predicting the end of the world, with potholes everywhere and no police officers on the streets," then-Mayor Phil Isenberg said.

Shellshocked, the City Council met daily for two weeks to chop the budget.

* Rookie firefighters like Julius Cherry, who had a wife, an infant and a new mortgage, were warned to look for new jobs.

* Josephine and Baldie, celebrity orangutans at the Land Park zoo, would not get their promised new enclosure with trees, and other animals would be sent packing.

* Desperate budget managers even discussed a fee on workers who commuted into the city.

Twenty-five years later, the hand-wringing appears to have been overwrought.

A Sacramento Bee analysis of the city's general fund budget -- its main operating account -- shows it is 15 percent larger today (adjusted for inflation) than the year before Proposition 13. While the city's population increased 61 percent, the budget increased 85 percent.

Cherry kept his job and is one of the Fire Department's senior managers. There are four orangutans at the zoo, including Josephine's son Urban, who frolic in a new habitat. And the fee on downtown workers never came to pass.

How did Sacramento survive?

Like other local governments around the state, the city benefited from a partial state bailout. But it also counterattacked by creating new revenue sources, some of them controversial, and by systematically bulking up old ones.

Sacramento, in particular, aggressively turned to voters over the years to ask for more money for parks, police, libraries and general maintenance.

City voters sometimes said yes. Residents agreed in 1996 to pay $25 a year for library services and kept intact a $62-per-parcel assessment for street lighting, landscaping and park maintenance. Twice, however, voters turned down tax increases for public safety.

"Sacramento is in many ways a picture of what proponents of Proposition 13 said would be the case -- that cities would adapt and go to the voters for approval for their actions," said Michael Shires of the Public Policy Institute of California, a state policy think tank.

Before Proposition 13, the Sacramento City Council annually decided how much property tax it would charge each landowner in the city. The county, the state and other governments did the same.

Proposition 13 eliminated that, basically pinning the property tax rate at 1 percent of each property's assessed value as of 1975. Properties sold after that are taxed on the basis of their value at the most recent date of sale.

The city is now more reliant on other revenue sources, such as sales and utility users taxes, that go up and down each year with the economy. In down economic years, Sacramento has had to cut services, neglect programs, lay off employees, and institute rolling "brownouts" -- or service reductions -- at fire stations.

A threat last year to Sacramento's utility users tax demonstrated the degree to which city officials are dependent on newer sources of income.

The tax is a prime money maker for the city because it taps into growth industries, such as cell phones and cable television, and pays for a wide variety of city services.

The Sacramento County Taxpayers League backed a ballot measure to reduce the tax. Mayor Heather Fargo and others campaigned against the measure, saying the reduction would devastate police and fire protection.

"What services are we providing too much of?" the mayor asked residents rhetorically. "Do the police respond too quickly? Are ambulances getting to you too fast? Are your parks too green? Are the libraries open too late?"

Voters elected to maintain the tax rate at 7.5 percent.

Jonathan Coupal, a past president of the taxpayer league, contends the city's fight for the tax shows that politicians continue to resist Proposition 13's subtext: Make government more efficient.

Indeed, the biggest change in city financing since Proposition 13 stems from a dramatic change in philosophy.

California cities have adopted a "pay your own way" mentality, making sure government recoups its expenses through fees, permits, and assessments on everyone from developers building new subdivisions to people facing citations for collecting too much junk on their property.

Between 1978 and 2002, the number of city services requiring a permit or fee jumped from 23 to 42.

The philosophy change can be seen best in North Natomas, the city's new boomtown.

When new neighborhoods were built in the past, the streets, parks and public facilities were paid for by the city's general fund, meaning that all city residents chipped in through their taxes.

The general fund can't handle that expense anymore, city officials say, so they require builders and home buyers in the new area to pay for all that area's infrastructure themselves.

As a result, residents in North Natomas pay more in property taxes, infrastructure fees, and special assessments than anyone else in the city. Developers say the fees they pay end up increasing the sales prices of Natomas houses by tens of thousands of dollars.

Some North Natomas residents -- aware they pay more than people in the rest of the city -- complain they aren't getting commensurate attention and services from City Hall.

"I don't mind the 'pay our own way' deal, but we aren't getting what we are paying for," said Scott Johnson, a homeowner association board member in the Natomas Crossing neighborhood. "We have a sign saying this is a future park site and weeds 8 feet high."

City officials say they are bringing amenities and services to Natomas as fast as they can.

They also say they are fearful the new pay-your-way financing system will cause Natomas residents -- and residents of future new-growth areas -- to feel disconnected from older city residents. That could lead to a Balkanized city that won't be able to come together to finance major projects in the future, they say.

The hunt for revenue also has rendered the city prey to another major problem generally linked to Proposition 13. Cities often approve commercial developments based on the sales tax those projects will generate instead of what's right for the neighborhood.

The Natomas Marketplace shopping center, built a few years ago, violates the North Natomas community plan and creates pollution and congestion. Yet, city officials eagerly approved it because it promised to bring new sales taxes to the city's ailing budget.

"We needed to create that economic growth," said then-City Manager Bill Edgar, who lobbied the council to approve the development. "This was a reaction to a very difficult financial situation. We were closing fire companies."

Now, in another example of how governments feel they must compete for sales tax dollars, city officials are trying to get an auto mall built across the street from Natomas Marketplace. To do so, they essentially would lure dealers who do business on Fulton Avenue in the county.

Paul Hahn, Sacramento County's economic development director, says the county will fight the city's move because it wouldn't boost the area's economy, it just would put more money in city coffers while blighting Fulton Avenue.

"Sales tax chasing is a zero-sum game; it just moves it from one place to another," Hahn says. But, he says, he understands the city's desires. "Basically, local governments have little flexibility over their revenues. This is what we are stuck with. I criticize the city, but I understand."

[Ernest_at_the_Beach]

They want our money in Sacramento, that sure is clear!

calgov2002:

calgov2002: for old calgov2002 articles. 

calgov2002: for new calgov2002 articles. 

Other Bump Lists at: Free Republic Bump List Register

[Roscoe]

"But now, the only growth that pays for itself in taxes is retail, which throws off local sales tax. That's why citizens opposed to having affordable housing in their communities can make a plausible, and often winning, argument that the new units will hurt local finances."

No evidence presented in support of the assertion.

[CounterCounterCulture]

PROP 13 caused/causes earthquakes, volcanoes, erosion, SARS, Milli Vanilli, global warming, AIDS, herpes simplex, herpes not-so-simplex, The Macarena, ring around the collar, Achy-Breaky Heart, the Coriolanus Effect, the endangerment of the spotted owl, alimony, velveeta, Dr Gene Scott, Emilio Estevez, eclipses, the summertime blues, Donkey Kong, fruitcake, mutton chops, roundworms, squareworms, triangularworms, The Village People, Starbucks, indi(burp)gestion, Pauly Shore...need I go on?

[thinktwice]

The monster is big spending government, not the retired moms and dads living on limited income.

[Nachum]

Thank God for Howard Jarvis!

[NormsRevenge]

It all becomes much clearer now, Thanks! LOL

You learned all that by reading the Murky Noise and listening to KPFA, I bet! :-o

[CounterCounterCulture]

You learned all that by reading the Murky Noise and listening to KPFA, I bet! :-o

Sure did...all that propaganda finally paid off.
KPFA - for those who think public radio is a tool of the far right and the eeeevil oil companies.

[Uncle Hal]

The only people that do not like Prop. 13 are the tax and spend liberals. There has been a rash of articles lately in the liberal rags saying how unfair prop. 13 is. This is obviously a concerted effort by the dems to soften up the voters into agreeing to amend the proposition. As an example, my in-laws bought their house in 1946 for $6000. That property today is worth a least $1 million. Their property taxes today under Prop.13 are around $1500. Everything else remainding equal without Prop. 13 their taxes would be in the $20 to $25 thousand range. Obviously they would not have been able to stay in the house since they are now in their 80's and living on a fixed income.

[Penner]

Prop 13 is the "3rd rail" of CA politics; touch it and you die.

[ASOC]

I thought all the Calif (come and live in Florida?)moms and dads moved to Las Vegas - very low taxes and a short commute back to "home".
Or was that Arizona, Utah or Colorado?
Folks have been voting with thier feet for decades. Still do.

[Lancey Howard]

The big losers were counties, which shoulder much of the responsibility of providing social services.

Providing that Democrat vote-buying machine, the socialist welfare state, the author means.

[BigBobber]

As economists Steven Sheffrin of UC Davis and Terri Sexton of California State University Sacramento have shown, lower property taxes drive up the market price of housing.

Unbelievable analysis by these "professors". Prop 13 does not lower taxes when you buy a new home or when ownership changes hands. Your tax is based on the selling price of the home, just like in every other state.

[Publius6961]

Debate over Prop. 13 still rages

Of course it still rages!

Politicians and parasites think their job is to dream up ways to take people's hard-earned money.

Working taxpayers' job is to pay and shut up.

As long as the law allows the parasites to vote, it will continue until the system collapses and there is a massive housecleaning.
Then we can start all over again.

[SierraWasp]

"It marginalized local elections," said Michael Shires, an assistant professor of public policy at Pepperdine University who has written extensively about Proposition 13. "Most people don't know who their council members are any more."

I thought Pepperdine was one of the most conservative U's in the state?

I do know that one of the unintended consequences of P-13 was the shift away from "local control in local hands," as power follows money to the centralized state government. It was further amplified by the monsterous magnitude of P-98 that forced the state to suck the counties dry just to fatten the teacher's sucky unions!!!

If anyone doesn't believe CA government is ungovernable, just pick up a copy of our CA constitution... IT'S AN ABORTION!!!

[Publius6961]

But now, the only growth that pays for itself in taxes is retail, which throws off local sales tax.

Pure unadulterated bullshit!
I have been hearing this since the late sixties when the sicko controllers devised a half dozen ways to "control" growth, which is another way of saying keep people out.
The result?

Today, in the community where I spent 35 years (I moved) the fees to build a new house is greater than what I paid for my 4-bedroom house originally.
And now they complain about sprawl and Prop 13.

Give me a break!

[Prince Caspian]

Psst... Hey politicians - CUT SPENDING!