Voting to repeal Proposition 13 will shrink racial equity gaps on property tax rates

This November, California voters will be asked to consider a ballot amendment to Proposition 13.

The initiative, first passed by voters in 1978, dramatically reduced funds for public services by setting significant limits on the property tax rate for commercial and residential properties.

Especially as Black Lives Matter protests continue across the country, now is a good time to consider the ways Prop 13 has contributed to inequality between the communities that have healthy neighborhoods, clean water, well-financed infrastructure and good schools, and the communities that don’t. After all, it is precisely that inequality, which maps along racial lines, that is the crux of structural racism.

California, for all its progressive values and best intentions, has among the worst racial disparities in the nation, including the highest levels of poverty and homelessness. For example, a count of homeless people in Oakland and Alameda County found a 47% increase in homelessness from 2017 to 2019, with nearly half of that population Black despite the fact that Alameda is only 11% Black.

In fact, the economic boom in California over the past three decades has exacerbated those disparities, not reduced them. It has made housing more expensive and out of reach, displaced long-time Black residents from their homes and communities and widened the gap between the affluent and everyone else.

Although broad economic trends such as the decline of private sector unionization and increasing automation contribute, policy choices made in this state have played an outsized role, few more so than Prop 13. Prop 13 caps property tax assessment increases to 2% per year, no matter the increase in the underlying value, and requires super-majorities in many cases to raise much-needed revenue.

The effect of Prop 13 is to stunt the growth of public resources, including education and safety services, even as the economy grows. Before Prop 13, California averaged around $1,000 above the national average in per pupil spending. As of 2016, the state ranked 41st.

“The most important thing in this country is not the school system, nor the police department nor the fire department,” said Howard Jarvis, one of Prop 13’s leading proponents. “The right to have property in this country, the right to have a home in this country, that’s important.”

This is why, despite featuring one of the fastest growing economies in the country, cities like Oakland and San Francisco have endemic budget deficits, and their school systems face routine cuts, even before the pandemic. Today, the Oakland Unified School District faces a $35 million budget deficit, which is only marginally worse than the $21 million deficit it projected in early March.

The ultimate effect of Prop 13 was to transfer wealth from public services to private hands and developers, and resources from predominantly communities of color to largely white homeowners. Prop 13 contributed to the “fiscalization” of land use, making it more valuable for cities to build office space than housing, contributing to our housing shortage.

Prop 13 also deepens the incentives that existing residents have to maintain exclusionary neighborhood policies. More affluent communities with whiter populations were able to make up the losses in public spending with their own private resources.

Prop 13 made and continues to make racial and economic inequalities much worse. Prop 13 reform will be on the ballot this November, the first step to rolling back this pernicious law. How you vote will depend not just on your pocketbook, but whether you believe this state should commit to a racial equity agenda that is more than words and symbolic gestures. It is our opportunity to get our government working again and rebuild the communities that have suffered from decades of disinvestment.

This story was originally published July 23, 2020 at 5:00 AM.