June 9, 2008
An interestingly bad argument for Prop 13
On my drive in this morning, I was listening to a discussion about the 30th anniversary for Prop 13. For those of you who aren’t in California, Prop 13 was a ballot initiative passed in 1978 that fixed property taxes at 1% of assessment at purchase, with a maximum of 2% growth year over year.
In practical terms, that means that when you buy a house in California, you might be paying $8000 in property tax (.01 * $800,000 – a typical 3br/2ba), but your neighbor Jimbo, who is 22, lives alone, but whose grandparents paid $80,000 for an equivalent house before 1978 pays just $1449 year.
Fortunately, the increase is fixed at 2%, so in 2108, when the houses in your neighborhood are worth $105 million (5% year over year appreciation), your children will be paying just $57,957 in property tax, but the suckers next door will be paying $1,052,010 a year. Oh, your neighbor Jimbo’s children will be paying $10,498 a year in property taxes.
I wonder how we will pay for roads and teachers in 2108. 99% sales and income taxes?
Which brings me back to why I started writing this – the interview had this classic exchange (paraphrased):
Interviewer: “Some say that Prop 13 has led to the decline of schools, crumbling roads, and growth in box stores and automalls everywhere. What do you say to that?”
Prop 13 supporter: “We as we just heard, recent polling indicates that an overwhelming number of Californians (70%+) support it, so clearly they value it.”
Let’s switch out Prop 13 and its related terms, with “smoking” and its related terms:
Interviewer: “Some say that smoking has led to the decline of air quality, health in children, and growth in lung cancer incidences. What do you say to that?”
Prop 13 supporter: “We as we just heard, recent polling indicates that an overwhelming number of smokers (70%+) support it, so clearly they value it.”
Talk about dodging the issue.
Another great argument I heard went something like this:
Prop 13 supporter: Those who claim that Prop 13 have impacted our schools should note that per student spending has increased 30%, adjusted for inflation.
That sounds really impressive until you realize that:
- It’s over 30 years
- It comes out to be less than .9% year over year above officially published inflation.
Is it any wonder a documentary film about this topic was called “First to Worst“?
In the 1950’s and 60’s, California’s schools were the national model. “There was a commitment to excellence,” author Peter Schrag says in the film. “California was the land of new opportunity; there was wonderful historical tradition in that.” Today, California’s schools rank near the bottom. Since tying with Mississippi and Guam in the mid 1990’s, state test scores have barely nudged upward. “We basically turned our back on schools,” John Mockler, an education policy expert, relates in the film.
FIRST TO WORST pays special attention to Proposition 13, the 1978 anti-tax law (still in effect) that froze property taxes on businesses and homes and, critics say, cut funding for public schools off at the knees. “We’re always on a survival level,” Harriet McLean, a principal in Contra Costa, explains in FIRST TO WORST. “We’re understaffed, we’re over-crowded, and our roof leaks.” McLean takes viewers on a tour of her school, which is typical of appalling conditions found in many schools throughout the state.
