Joe Mathews

The Conversation: To repair government, look beyond Prop. 13

Published: Sunday, Jan. 20, 2013 - 12:00 am | Page 1E
Last Modified: Sunday, Jan. 20, 2013 - 12:32 am

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Efforts to fix Proposition 13 have a problem. A pink elephant problem.

It's the old cognitive trick. Don't think of a pink elephant, you're told, and it becomes impossible to think of anything but.

For some liberal-minded Californians, when the topic turns to what's wrong with their state's governance, it's impossible to think or talk about anything but Proposition 13. This is understandable. And counterproductive.

Some who are Proposition 13- obsessed work in the Legislature and are making plans to take on the 1978 ballot initiative that limited property tax increases and established two-thirds supermajorities for raising state and local taxes. Unfortunately, their strategy seems to be a straightforward assault on specific provisions of Proposition 13.

One proposal would lower the supermajority requirement for raising parcel taxes. Another would establish a "split roll" for taxation that would remove some of the Proposition 13 protections for commercial property.

Commercial and industrial property owners live under the same Proposition 13 protections as residential homeowners, but the commercial folks have aggressively structured ownership to avoid the reassessment – and higher taxes – which hit when their properties are sold.

In essence, the politicians seeking to change Proposition 13 are picking a big political fight they're almost certain to lose as part of an effort to enact modest policy changes that leave the core of Proposition 13 in place.

The strategy should be the opposite. Downplay your political ambitions, while going for the policy jugular.

And above all, don't mention the elephant in the room.

The key to pulling that off is to recognize that Proposition 13 as a brand is far more popular than Proposition 13 in practice.

In our minds, Proposition 13 stands for limitations on taxes, particularly property taxes. But in practice, Proposition 13 is the centralizing, anti-democratic foundation of the state's thoroughly dysfunctional governing system. So as a matter of strategy, reformers should talk about that terribly dysfunctional governing system and the need to fix it; they should not speak of Proposition 13 and its popular tax-limiting provisions.

On the political side, I would go so far as to suggest a Proposition 13 version of the first rule of the Fight Club that Brad Pitt supervises in the movie of the same name. That first rule? No talking about Fight Club.

On the policy side, however, the Legislature shouldn't be so bashful about dismantling Proposition 13, even as they never say the initiative's name.

The core of that initiative wasn't really property tax rates; it was about distrust of politicians. Proposition 13 took away the discretion of today's voters and elected officials to set certain tax rates.

Instead, Proposition 13 replaced democracy with formulas that limit property taxes, and supermajorities for raising taxes in the Legislature and in local communities that frustrate democratic majorities.

Those on the left and right have built more and more rules – both spending mandates for popular programs and tax limitations – on top of the Proposition 13 foundation. This has reduced the discretion of local officials and hurt democracy; it doesn't matter all that much who you elect today if tax rates and spending mandates that determine the budget were decided years ago.

As evidence of this, think how much more attention flowed to Proposition 30 than to legislative races. This system has undermined accountability, since local elected officials can spend money without having to raise taxes to cover the costs. One result has been local overspending on police, fire and retirement benefits, and some high-profile municipal bankruptcy filings.

Californians can't have democracy and accountability until we restore the responsibility of local elected officials, and a majority of state lawmakers, to set tax rates to fund the spending decisions they make.

Unfortunately, reformers are sidestepping this reality and offering Proposition 13 fixes that, while well-intentioned, are really just more of the same Proposition 13.

The split-roll proposal doesn't end formulas or restore democracy – it just imposes a different formula for commercial property. And lowering the supermajority for certain local tax votes still keeps elected officials from having the responsibility to set the tax rates for the spending they order. If these reformers were to succeed, they would likely embed Proposition 13 and its core anti-democratic principles – supermajorities, weakened local officials with only spending authority – even more deeply in California governance.

The real way to end Proposition 13 is to restore that local democracy and the accountability that comes with the power to raise taxes. Take power away from Sacramento and the influence peddlers, whose numbers have grown fivefold under the centralized system. Let communities and their elected representatives decide for themselves not only how to spend but, more importantly, how to raise taxes for their own spending. In other words, let's scrap the current centralized governing system and build a new one.

People who know California politics will immediately dismiss the last sentence as politically naive and unrealistic. But their dismissal shows just how in thrall the state remains to Proposition 13 and the centralized system – and how trapped we are by decisions voters made in the past.

Indeed, the fact that I am writing this story right now – and you, I hope, are still reading it – is itself evidence of California's limited thinking on its governance problems, and its related Proposition 13 myopia. (And yes, I must admit I am not following my own advice in not talking about Proposition 13 – I have already mentioned it more than 20 times in this piece).

How deep is that myopia? Imagine a singer who gets a new record contract with the opportunity to create music, in any genre, that today's listeners will appreciate. But instead of creating new music, she, for some reason, can think only of disco and how to update it.

Sound weird? No weirder than us Californians.

Take a step back and think of the moment we are now in. Two-thirds supermajorities of Democrats have taken control of both houses of the Legislature. So what will they talk about? How to remake the education system for the 21st century's globalized economy? How to rebuild the safety net and infrastructure? How to produce more college graduates and skilled workers?

No. The big conversation is whether they'll use their supermajority to change aspects of a ballot initiative passed in the days of disco.

This is nuts. If we're ever going to break up with Proposition 13, we'll have to find a way to get over it. In the long run, that requires designing a governing system that will make California work better.

In the short run, it will require new habits of mind, and maybe a little acting until we've learned how to stop obsessing about Proposition 13. You can try it. When someone – whether friend or foe of Proposition 13 – suggests that various fixes to California would require changing Proposition 13, try to look puzzled, as if you'd never heard of the 1978 ballot initiative. And quickly change the subject.

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