June 6 marks the 40th anniversary of voters’ overwhelming approval of Proposition 13, which has been protecting all California taxpayers ever since.
Some people mistakenly think Prop. 13 protects only homeowners, because it cut the property tax rate statewide to 1 percent and put a stop to uncontrolled increases in assessed value. But it did something else, too. It required voter approval of local tax increases and set the threshold for approval of special taxes at a two-thirds vote.
For 40 years, big-spending politicians have been looking for loopholes.
Take parcel taxes, for example. A parcel tax sounds like a tax on UPS deliveries, but it isn’t. It’s a tax on real estate parcels. Under Prop. 13, politicians can’t raise property taxes that are based on the value of property, but they figured out that they could add a flat tax to property tax bills if it wasn’t based on value.
Under Prop. 13, two-thirds of voters have to be convinced to approve parcel taxes.
Politicians figured out that the two-thirds threshold would be easier to reach if they exempted a lot of people from having to pay the tax. Certainly people who won’t have to pay a tax are more likely to vote for it. And politicians who vote for the exemptions can say they voted for a tax break, even though they were raising taxes at the time.
An example of this was the Legislature’s action in 2008 to exempt people on Social Security Disability from paying education parcel taxes. HJTA opposed this bill because it undermined the two-thirds vote requirement for parcel taxes established under Prop. 13. The more classes of people who are exempted, the more the two-thirds vote will be watered down, and the easier it is to raise taxes.
Taxpayers are hit twice by the exemption trick. Taxes are raised more often, but the exemptions mean the government receives less revenue. So the likelihood of other taxes being raised to make up the difference in the future is that much greater.
But when something is working for the politicians, it tends to stick around.
Politicians love picking winners and losers. It means power over the lives of others and provides a great source of campaign contributions.
The “progressive” legislators who control California’s government favor government employee union organizations — the most powerful force in Sacramento. Every favor granted to public sector unions is a transfer of wealth from taxpayers and the private sector to government employees and the public sector.
Right now, the Legislature is considering a bill that would exempt teachers and education support staff from paying education parcel taxes. Senate Bill 958, which has passed the Senate and is now in the Assembly, was initially a statewide proposal but has been narrowed to target only the Davis Joint Unified School District in Yolo County.
For now.
If the politicians are able to pull this off, they’ll be able to do special favors for targeted groups of supporters while raising everybody else’s taxes and setting the stage for even more tax increases in the future.
Not surprisingly, SB958’s supporters include the California Teachers Association. For them, this bill is a win-win. Not only do they get to give their union members a free gift, but they also make it easier to pass taxes with a two-thirds vote.
This is a dangerous path. It’s divisive to award tax breaks based on political affiliation, and there will be no end to it. If the teachers get a tax break, what about the nurses? What about the police and firefighters? Where do the exemptions stop? If public employee unions can effectively raise their own salaries by lobbying for new taxes that their own members won’t have to pay, then our government has been converted into a slot machine. There will be more losers than winners.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.