In the mid-1970s, California property taxes were soaring, along with real estate values, and incomes couldn’t keep pace. The result was a campaign, financed by L.A.-area apartment landlords, that culminated in the now-infamous Proposition 13 ballot initiative in 1978.
Prop. 13 rolled back and capped both residential and commercial property tax rates at 1975 levels. And it virtually guaranteed that only a revolution would reverse the measure. Proposition 13 imposed a two-thirds majority requirement for all tax bills and required local voters to approve all municipal tax increases.
“California put itself in a straitjacket that it hasn’t been able to get out of,” Occidental College’s Prof. Dreier explained.
In the years since Prop. 13, California has come to the rescue of local governments, taking on ever-greater responsibility for schools, low-income health care and welfare. And it has paid for all that with volatile sales and income tax revenue, making it tough to balance its budget when the economy stalls.
“A lot of people predicted doom and gloom in 1978. It just took a long time,” said John Tanner, executive director of Local 721 of the Service Employees International Union, which represents 85,000 government workers in Los Angeles and throughout Southern California.
Prop. 13, according to Mr. Tanner, has put schools, courts, parks and a raft of other government services in a downward spiral. “We are at an unacceptable place right now,” he said.
Perhaps no group of workers feels more targeted in the crisis than teachers. U.S. Education Secretary Arne Duncan has warned that without money from Congress as many as 300,000 teachers nationwide could lose their jobs to state budget cuts, including several thousand in California.
“It’s not easy being me these days,” said A.J. Duffy, president of the United Teachers of Los Angeles. “I have 45,000 members looking to me to save their jobs.”
His union represents teachers and other employees at 700-plus L.A. schools, where as many as 1,200 jobs are threatened.
“We’re destroying education as we know it,” Mr. Duffy lamented. “My teachers will do a great job no matter what. But it’s harder and harder to deliver the quality of education we’ve had.”
California public schools were once a beacon for the country. Now, the state ranks dead-last in student-teacher ratios, 45th in per-student spending and 36th in high school graduation.
The tax structure may be badly flawed. But even union activists acknowledge that repealing Prop. 13 outright is probably a non-starter. Recent polls show support for keeping a lid on property taxes remains strong, in spite of the budget crisis.
Experts say tax reform is the only option for California, short of a massive and unprecedented shrinking of government. And that requires an “open conversation” between voters and their elected leaders, and almost certainly higher taxes, according to Ms. Ross, the economist.
If you want good schools, you have to pay for them,” she said. “Cutting taxes doesn’t raise revenue.”
That kind of talk angers Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, named after the L.A. homeowner who led the Prop. 13 campaign and dedicated to ensuring it’s never overturned. He said California is a high-tax state with generously paid government workers, and recession-weary taxpayers have no money to pay more.
“The bank is empty,” Mr. Vosburgh complained.
“We have tried to be all things to all people and we can’t afford to do that any more.”
But in California, and elsewhere, the price will be steep – in lost jobs and vanishing services.
Carliose Lane, 37, an animal licensing official for the City of Los Angeles, knows the city, and the state, are in a budget bind. But he can’t understand why he and the city’s entire team of animal fee collectors must pay the price with their jobs. Who, he wondered, will collect the money that pays for the city’s shelters and pet control operations after he’s laid off on July 1.
“Laying me off isn’t going to solve the city’s budget problems,” said Mr. Lane, whose $32,300-a-year salary helps support a wife and three children. “It will make them worse.”
