In California, the high cost of Proposition 13

Peter Schrag

June 03, 1993|By Peter Schrag

EVEN if Sunday had not marked the 15th anniversary of Proposition 13's passage, yet another question about it wouldn't have been surprising: In national politics, Proposition 13 has been a California landmark since the day it was passed. The question came from a researcher for a national newspaper columnist who wanted to know what the major effects of the measure had been and how they bore on the state's current troubles. He wanted to read the clips; he wanted to know to whom he should speak.

To such a question, the first response is: How much time do you have?

The second, an expansion of the first, is that there is almost nothing in this state that hasn't been affected, mostly for the worse. The measure capped property taxes, which was a godsend for people of modest income who couldn't afford the huge inflation-driven run-up in residential tax bills in the late 1970s.

But it did so at an enormous cost in public services, government accountability and public alienation.

The third is that in the name of protecting those people of modest income, most of them said to be retirees on pensions, it automatically increased the price of all property. That was a windfall for the haves, but made it correspondingly harder for young families to buy homes and for new businesses to establish themselves.

In effect, Proposition 13 shifted a proportion of each new property owner's monthly payment from the support of schools, parks and libraries to higher mortgage interest payments (meaning payments to banks) for the newly inflated prices of that property. Thus a chunk of the money that was "saved" in property taxes is now being paid by other people in higher mortgage payments, fees and federal taxes.

More important still, Proposition 13 and the succeeding initiatives and legislative cleanup bills so tangled governmental powers and fiscal responsibilities that no citizen -- and often not even the political pros -- can understand how the system works or who's accountable for its failures. Most immediately, by requiring supermajorities for virtually all local tax increases -- those that it still permits -- it further institutionalized the governmental gridlock that was already afflicting the public budget process.

Now consider Proposition 98, which has probably been Proposition 13's biggest offspring. It was pushed by the school establishment, and passed by the voters in 1988, as a way of guaranteeing a chunk of the state budget for education after Proposition 13 shifted virtually all fiscal power from local boards to the state government. But Proposition 98 is so complicated and distorting -- and not only in beggaring all other public services -- that it's virtually incomprehensible, even for the pros under the dome.

That, in turn, makes disputes over the budget -- how much the schools get, and how much they're entitled to -- doctrinal debates among cults speaking a language no one else can understand.

And since school boards no longer have the power to raise taxes, no voter can be certain whether it's the local district's overspending that's responsible for budgetary failures -- in some districts, like Los Angeles, now verging on bankruptcy -- or whether the responsibility lies with the state's failure to appropriate enough money.

In the meantime (and for the same reason), the business people and taxpayer groups that would once have taken a vital interest in the schools (and run candidates for school board jobs) have all but with drawn, leaving the field to teacher unions and other public employee organizations, which still have a vital interest. They now put up the lion's share of the campaign money and, in many of the state's largest cities, control the boards.

For some years, the real impact of Proposition 13 was concealed because the state, which was still enjoying a substantial run-up in sales and income taxes, was able to bail out local government (in part, at least, by rolling over and concealing its own shortfall). But as the governor seeks to shift tax money from the counties to the schools (and thus reduces the state's bailout to schools from its own revenues), the full impact of Proposition 13 begins to hit. The screams now coming from county officials, cops, firefighters and librarians, are, for the most part, the 15-year-deferred anguish of Proposition 13.

It's not certain, however, whether even this pain will be attributed to anything but abstractions about the recession, or legislative incompetence or just plain "politicians." Proposition 13 conceals its most devastating effects behind the fiscal and political mishmash it's helped make of state and local government.

Thus it preserves its own myth and hides the shifts in power and wealth it helped encourage. The principal winners of Proposition 13 are the haves; the losers are the young, the have-nots and the promises that a good society makes to its citizens. A whole era has been marked by such shifts in America, but California did it with a thoroughness, and at a cost, that even we don't yet understand.

Peter Schrag is a columnist for McClatchy News Service.

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