From: dbailey@wk49.nas.nasa.gov (David H. Bailey)
Subject: Prop. 13 and California's fiscal crisis
Organization: NAS, NASA Ames Research Center, Moffett Field, CA
Date: Mon, 31 Aug 92 03:57:46 GMT
Distribution: ca

The following article appeared in the Perspective section of the
San Jose Mercury News, Sunday August 30:

"Blame Howard Jarvis and Paul Gann, not Wilson and Brown", by
Lawrence E. Stone

If Howard Jarvis and Paul Gann were alive, they could experience, with
the rest of us, the results of Proposition 13: the destruction of
public services in California.  The Jarvis-Gann initiative of 1978 has
finally crippled the ability of California citizens to receive the
quality of public services they once enjoyed, and continue to demand,
from governments at all levels throughout the state.

The State of California is bankrupt.  The two-month budget deadlock in
Sacramento is only one vivid and critical symptom of Proposition 13.

Proposition 13 drastically restructured the property tax system in
California in two ways.  First, it immediately cut property tax
receipts severely by limiting, statewide, the tax rate to 1 percent
of a property's 1975 assessed value.  This provision was not fatal to
most local governments, as the assessed value of real property had
been increasing at an extraordinary rate in the years immediately
prior to 13's passage.

The most insidious and damaging aspect of the initiative was the
provision that limits the increase in assessed value of all properties
to 2 percent annually.  This limit guaranteed the delayed budget
catastrophe we are now experiencing.  The market value of property has
increased nearly 10 percent per year since 1978.  But the costs of
providing property related services must be funded by the 2 percent
annual increases.

The costs of paving streets, keeping libraries open, maintaining
parks, teaching kids, and protecting public safety are not limited by
a 2 percent cap, however.  In fact, over the past 15 years, the
Consumer Price Index, which reflects the costs of these services, has
increased by up to 8 percent each year.  Jarvis and Gann guaranteed
that California eventually would have to choose between disaster and
debacle, between misery and pain.

Proposition 13 is also perniciously unfair -- those who bought homes
before the approval of the initiative pay low taxes, and those who
bought after get soaked.  It has created gaping divisions among
Californians, between generations, between those who own property and
those who never will.

When I moved to California, 25 years ago, our state could boast the
best public schools.  California had the best state university and
community college system.  Our highway system was superb.  Our
criminal justice and penal systems were renowned.  Our public parks
were considered the best in the nation.  Now that Jarvis-Gann has
taken full effect, the Golden State can no longer boast even top 20
status in any meaningful category that measures the quality of life.

So, before you blame Pete Wilson, Willie Brown, or the rest of the
California Legislature, place the blame squarely where it belongs:
Howard Jarvis and Paul Gann.

----------------------------

P.S.  I might counter that we shouldn't blame Howard Jarvis and Paul
Gann.  If we are looking for someone to blame, we need only look in
the mirror.  After all it was California voters who voted for Prop.
13, and it is California voters who even now, in the face of
unprecedented fiscal catastrophe, continue to resist reforming this
crazy system.

David H. Bailey
Xref: sparky ca.politics:7454 alt.politics.correct:5230