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June 6 will mark 40 years since California voters passed the People’s Initiative to Limit Property Taxation, more commonly known as Proposition 13. As its primary backers recall, “property taxes were out of control. People were losing their homes because they could not pay their property taxes, yet government did nothing to help them.” Proposition 13 rolled back property values to the 1976 assessed level, limited increases to no more than 2 percent per year if the property was not sold, and reassessed sold property at one percent of the sale price. The measure, approved by 65 percent of voters, did not create any new state agencies, mandated no new state spending and required no new state hires. Governor Jerry Brown called it a fraud and a rip-off, but after it passed he proclaimed himself a “born-again tax cutter.” That was never true and on his second go-round he made California’s income and sales taxes the highest in the nation, as Proposition 13 came under relentless attack.
As we noted in 2016, big-government apologists claim Prop 13 is inherently unfair because owners of similar properties pay different amounts of property taxes. With property tax pegged to the purchase price of a home, that differential is inevitable. In Common Claims About Proposition 13, the state’s legislative analyst claimed that higher-income Californians “own more homes and own homes of higher value and, therefore, receive the majority of the total dollars of tax relief provided to homeowners by Proposition 13.” Actually, these homeowners do not “receive” anything. They pay less of their own money to the government because of a measure voters approved. Contrary to statist superstition, to allow anyone to keep more of what they earn is not to give them something.
As the anniversary approaches, Governor Brown is touting a budget surplus of some $6 billion and tax collections are up $3.8 billion from what the governor anticipated in January. So Proposition 13 has not prevented a budget surplus, yet big-government types are touting a “split-roll” that would tax industrial and commercial properties at market value. Instead of cutting useless state agencies, trimming wasteful spending, or lowering taxes, statist types would rather remove one of the few checks on government greed. Forty years after Proposition 13, that greed remains insatiable.