Prop 13

Sasha Abramsky makes the argument that maybe California voters have finally had enough of the impact of Proposition 13, the 1978 ballot measures that decimated the state budget and set in motion the anti-property tax movement nationwide that has contributed to a variety of problems, including spiraling tuition rates for college as states reduce their contributions to higher education in response to lower tax revenues. Not surprisingly, Prop 13 has served the interests of the extremely wealthy, as they have developed fictions to get around its limitations while allowing it to retain its electoral magic. Tax reformers are pushing for what’s call a split-roll approach to property taxes. An explanation:

 Coupal and his allies have recently come out in favor of a legislative fix to tackle the sorts of “abuses” embodied in the Dell case. They support a law that defines “ownership change” as having occurred whenever at least 90 percent of a property shifts hands, regardless of whether any one owner ends up with more than 50 percent. But they have drawn a line in the sand against the idea of a “split-roll tax,” which would impose a higher burden on corporations. Coupal accepts that such a tax would easily boost state revenues in the short term by several billion dollars annually. But his organization, the California Chamber of Commerce, and other opponents of change argue that the cost in lost jobs and leakage from businesses relocating out of state would more than cancel out the benefits in the long run. “Our position has always been that if you’re going to have a tax increase, it should be broad-based and universally applicable,” says California Chamber of Commerce policy advocate Jennifer Barrera. “A split-roll tax treats residential property differently from commercial property, so it’s discriminatory.”

 Reform advocates, however, believe that a split-roll tax is exactly the way to go, and their polling research suggests that, for the first time in a generation, they have a decent chance of persuading a majority of the electorate to support them. Over the last few years, they have been calling for a reform that would protect homeowners and renters while taxing corporations at closer to the market value of their properties. Far from being discriminatory, they argue, it is simply a matter of equity: In an era of growing inequality and wealth concentration, this reform would generate desperately needed funds to maintain and expand vital public services.

Economists at the University of Southern California’s Program for Environmental and Regional Equity were recently hired by Make It Fair, a statewide coalition of reform groups seeking to put a split-roll-tax initiative on the ballot. When the PERE team crunched the numbers on more than 1 million properties across the state, they reached an astonishing conclusion: If a reform were enacted that maintained lower tax rates for residential homes but raised them to market rates for commercial and industrial properties, the state would generate $8.2 billion to $10.2 billion in additional annual revenues. It’s a figure large enough to restore the state’s education system, improve its mental-health infrastructure, and reform many of the other areas that have been left to lag in the decades following the 1978 tax revolt.

You can color me skeptical that this passes, but I’d love to be wrong. Abramsky cites California’s changing demographics, and that’s certainly true. But mobilizing young voters of color for criminal justice reform is a different beast than mobilizing them for property tax reform because the former is more obviously a justice issue, even as the latter is in reality as well. And the money pouring into California from corporations to defeat this is going to be amazing. But I am at least glad to see this issue on the table and maybe something positive will happen.