The state's budget travails, and those of local governments, have inevitably given rise to demands that Proposition 13, the landmark property tax limit measure enacted by voters 31 years ago, be altered.
Proposition 13, those on the political left contend, is the root of all fiscal evil, leaving California's governments unable to meet the state's legitimate needs.
Recognizing that Proposition 13 remains politically popular, its critics don't demand its repeal. Rather they seek changes, such as a "split roll" that would allow taxes on commercial property to rise while leaving limits in place for residences.
Typical is a recent op-ed piece by Phil Ting, San Francisco's property tax assessor. "The abundance of corporate property tax loopholes creates a system where the middle class, our families and our seniors are buried under a mountain of property taxes," Ting wrote. "Combine this with a tax system that relies on regressive and unpredictable taxes and fees, and we find our state in a perpetual budget crisis."
Ting didn't offer any hard data to back his hyperbole because, in fact, numbers don't support him.
Over the past three decades, state general fund revenues, primarily from sales and income taxes, have increased 500 percent, from just over $15 billion a year to about $90 billion.
Proposition 13 slashed property taxes nearly in half, to $5.6 billion a year in 1978-79. Since then, property taxes have risen 800 percent to more than $50 billion, according to data from the state Board of Equalization – far faster than other revenues, thanks to new construction and transfers.
Of course, had Proposition 13 not been passed, those property taxes would have been even higher.
Were Californians' property being taxed at the same rate today as in 1978, our property taxes would have soared to at least $150 billion a year – a politically unsustainable level. In other words, a backlash against property taxes was inevitable. Had Proposition 13 not occurred, something else would have.
What about Ting's contention, widely repeated in anti-Proposition 13 circles, that commercial property is unduly benefited?
Dave Doerr, chief consultant to the California Taxpayers' Association and a leading expert on taxation, has calculated that commercial property subject to local assessment by Ting and his colleagues in other counties is actually bearing a slightly larger share of the property tax burden than it did 30 years ago – and, interestingly enough, residential property's share has also been rising.
What's happened, Doerr says, is that the share of taxes on personal property not subject to Proposition 13 has declined, as has the share borne by state-assessed railroads and utilities.
California's fiscal dilemma has many root causes, but most of them are political.
Proposition 13 has had a big effect, but it's not so much its slowing the growth of property taxes as its inadvertent concentration of decision-making in a Capitol political culture that's utterly incapable of acting responsibly.
Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters.
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.