California's Troubles Not the Fault of Prop 13

This article from City Journal suggests that California's much-reviled Proposition 13 limits on increases in property tax is not at fault for the state's crippling fiscal situation.

"According to liberals in politics, journalism, and academia, Proposition 13 is the reason for California's worsening fiscal nightmare and the declining quality of the state's public services, and the motives behind it were deplorable. And because Prop. 13 ignited a national tax revolt that remains potent, the Left also blames the measure for much of what it thinks has gone wrong in American political life generally over the past three decades.

Yet no matter how often their moral and intellectual "superiors" denounce them, California taxpayers continue to insist that the problem isn't their purported stinginess but their government, which makes lousy use of the considerable funds that it continues to receive. On this point, the voters aren't being stubborn, greedy, or stupid. The voters are right."

Author William Voegeli argues that the state's spending policies are really what put it in the situation it's currently facing.

Full Story: Don’t Blame Proposition 13

Comments

Comments

Poorly presented

Mr. Voegeli presents the standard right wing "blame the liberals" rant while presenting half-truths and poorly-researched and simplistic arguments. Proposition 13, while not ideal, clearly has presented Californians with a few benefits but also a list of challenges. This issue is too complex to be used as fodder for another partisan argument. The lack of scholarly research and citation in this article erodes its verity, and reflects badly on qualifications of the author and his comprehension of the subject.
rob bregoff

The author is right about a

The author is right about a great many parts. The rise in the costs of personnel (with overly gracious benefits), out of control growth, and a one size fits all mentality about how to deliver services at a local level has indeed crippled California. The imbalance between costs and revenues is also reflective of the attitude that the electorate has come to expect, not only in California but elsewhere, that the volume of growth will overcome any need to raise the rate on taxes or to add other more senisible revenue schemes to the mix. The part most anti-tax advocates seem to forget is that the only difference between republican and democratic is what they spend it on. They have all been lulled into the false sense that growth is normal and that expenses are simply a matter of whose side your on. Dealing with any imbalance is a future policitician and electorates problem. Local taxation is rarely supply side, is generallly regressive, and someone else is always paying more or less than you.

California income and governance.

I'm shocked, shocked that the right wing paradigmer is harrumphing about folks decrying revenue reduction to the government.

It is certainly true that on a good day the lege seemingly cannot govern their way out of a paper bag, but Prop 13 surely takes a good chunk of the blame for helping push the state downhill way back when. Much of the current FUBAR arose from the intended and unintended consequences of the outcomes of Prop 13 and many of the proposals that popped up in its wake.

Best,

D

highly flawed

The author's argument is highly flawed for at least one reason: a dollar in CA is not the same as a dollar in TX. According to top50states.com (I am on my phone, so this is the best source I have found to work. It claims its . stats come from.the bureau of labor statistics) the cost of living in CA is rated at 135.1 compared to a base average of 100. The cost of living for the other top ten largest states are, TX at 90.5, NY at 125.2, FL at 101.1, IL at 96.2, PA at 102.4, OH at 92.8, MI at 96.0, GA at 90.9, and NC at 96.4.
"All told, California’s governments received $4,731 per resident from all taxes, 14 percent more than the $4,160 average outside California." That 14% higher tax revenue falls short of the 35% higher cost of living. If cost of living is accounted for, CA received 15% less in taxes than average (1-114/135).
". Consider public education: California spent $8,909 per pupil in 2007–08, according to the U.S. Department of Education. Twenty-eight states and the District of Columbia spent more; 21 spent less, including Florida and Texas, which are also large Sunbelt states with enormous metropolitan areas and significant immigrant populations" Without taking cost of living into account, CA spends an average amount of money per pupil. if cost of living was accounted for, CA would be on the low end of education spending.
Voegeli complains that teachers in CA are paid 24% higher than the national average. Adjusted for cost of living, they are actually paid 8% below average.
Though I do not know enough to say what the real problem is in CA, I can say with.confidence that Voegeli''s argument is flawed. Since some places such as CA are more expensive than other places such as TX, any analysis of tax revenues and gov spending must account for differences in purchasing power.

Yes and No on Prop 13

There are definitely a lot of issues around Prop 13 that are not black and white. I think the author's central argument is correct that the property tax limits have definitely not caused a revenue shortage in Sacramento, as adjusted for inflation, property tax revenue is higher today than it was in 1978. It is an easy foil for those that think CA needs more money to fund "the services the people want" (i.e. politicians funneling taxpayer money to the special interest groups as the quid pro quo for funding their campaign and office expenses). However, there are many other problems with Prop 13 that don't get discussed in depth. For starters, it centralizes what should be local government dollars in Sacramento for redistribution as Sacramento sees fit. This is an especially large problem in education as it allows for a centralization of lobbying efforts by those that benefit from education spending (the CTA and the varying/competing education bueracracies in the capital). Prop 13 basically eviscerated local education control to the detriment of taxpayers and families with school age children (I guess we can all argue as to whether this a good/bad thing, but it happened as a result of Prop 13). One can also argue that Prop 13 actually pushes home prices higher than they otherwise would be (home prices are based primarily on the affordability of debt, the amount of debt allowed based is primarily on income, therefore fixed property taxes allow one to borrow more and bid up housing prices), which is the reason why property tax revenues are higher today than in 1978 (an interesting unintended consequence of a measure designed to limit property tax increases and government revenue). Those are just two issues, but there's definitely a lot of grey area and unintended consequences of Prop 13 that are not even related to property tax revenue (I believe that the 2/3rds requirement for budgets/tax increases is also part of Prop 13). All in all, I'm for repealing Prop 13, which will likely never happen as too many folks are in on the gravy train (grand comprimise to get it done, repeal prop 13 and make public employees unions illegal?).

As to the idea presented below that it is hard to compare dollar figures across state lines due to cost of living... this is true, but you also have to figure in that a large part of the high cost of living in CA is directly related to the cost of our predatory state and local governments (as aside from Prop 13, CA's taxes are always tops on the list, and that doesn't even include the regulatory shenanigans that increase the cost of doing business).

Typical Reactionary response

The author only deals with theories, from a reactionary viewpoint, about 1 aspect of Prop 13. The impact of Prop 13 had its greatest impact at the City and County levels in regards tax income. State spending policies have little to do with the money that was supposed to flow to local government.

Further, this was not a "voter" initiative, but largely a front for a commercial real estate welfare program and for uber-conservative reactionaries from Texas who have been waging a secret war on CA for decades. However, more importantly, are the other areas not having to do with 'property taxes', which are causing the most havoc with the State government - conveniently ignored.

Plus, many of the State's spending policies have been foisted off on the State by out-of-State 'special interest' groups (mostly 'reactionary' or 'conservative') or the Federal government's unfunded mandates or un-fulfilled duties.

The dead giveaway that the author's point of view was not merely academic, but political was in the first paragraph where the author immediately began throwing the 'L' word around trying to make light of the correct aspersion of 'Republican "Neanderthals"' heaped upon the CA GOP minority. Prop 13 has turned them into a de facto majority, just as the 'funny rules' have done in the US Senate.

After a brief review of the author's article and the website of the Manhattan Institute, that this was a polemic written to stir up the Masses is obvious. The 'liberal' baiting and attempted mis-direction of the criticism of Prop 13 by serious writers and scholars by the author becomes his only argument. Acceptable only to other uber-conservative Reactionaries and those looking for a good living environment on the cheap, but not "willing to pay for it". (Public welfare for the rich?)

I'm sorry that I don't have more time to argue the author's thesis point-by-point, but it is such typical Reactionary anti-tax drivel that spending further time is pointless. I wonder if the author treats his BMW / Mercedes with as much contempt as he treats California commonweal? The Manhattan Institute is, afterall, in NYC. Why would he care, he's not on the Best Coast?

If the author would prefer an alternative to the fees necessary to run a 21st Century government, I am sure that there is a cave for him in the Mojave Desert, which wouldn't be subject to all those onerous 'fees', or an island in the Pacific, which is still above sea-level - for a few months.

Book cover of the Guide to Graduate Planning Programs 4th Edition

Thinking about Grad School?

New! 4th Edition of the Planetizen Guide to Graduate Urban Planning Programs just released.
Starting at $24.95

Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $209
Woman wearing city map tote bag

City Shoulder Totes - New Cities Added!

Durable CityFabric© shoulder tote bags available from 7 different cities.
$22.00
poster

A Short History of America

From comic book artist Robert Crumb, poster shows how the built environment has changed throughout the decades.
$14.95