The Attempt to Reverse California’s Tax Revolt Past
As mentioned in my previous writing about California’s ballot initiative system, Prop 13 has been an iron pillar in California politics and policy making. By massively lowering property tax revenue in California, it has imposed decades of austerity in California and a confounding revenue structure as well as contributed to massive income and wealth inequality. Years there have been talks of changing this and making it so that property taxes are properly being paid. Prop 15 is the first real proposal that has significant support capable of contesting the expected backlash opposition from the rich and powerful.
Prop 15 would institute something called a “Split Roll Reform”. Prop 15 would make it so commercial and industrial properties (except commercial agriculture and commercial properties below 3 million in value), would be taxed based on their market value rather than their purchase price. People’s houses would be left untouched by the proposition. With this you have substantially increased revenue as well, as companies like Disney will have to pay property taxes based on Disneyland’s current worth, rather than the value it was purchased at in 1975(no more than 2% adjustments in subsequent years). But those looking to buy homes now at their purchase price don’t get any sort of real relief from the Prop 13 of decades ago.
The estimated increased funding of 12 billion dollars would go to K-12 education and local government services which have been the most starved of revenue because of Prop 13. This is also why local governments have relied so much on regressive sales taxes in order to fund services. With California ranking 39th in per pupil spending among states in the country, it’s clear the money is desperately needed there as well.
The entire array of Democrat and liberal interests are backing this proposition. Unions, Sierra Club, Equality California, and local, state, and federal officials of the Democratic party have all gotten behind it when it was not that long ago then Governor Jerry Brown said Prop 13 was set in stone. But as California has had to deal with various escalating crises, this type of modest reform of an archaic and deeply conservative tax structure was finally seen as palpable to the Democratic apparatus in the state.
Since the election of Jerry Brown, Democrats have slow rolled nearly every progressive priority possible. For his term, Brown constantly was reluctant to go with big spending priorities instead always looking to shore up a “rainy day fund” while also not willing to make any changes to Prop 13. Newsome ran on pushing single payer in California and immediately abandoned it in his first year. It must be asked where this unified support from the party and their allies on other issues and priorities? If this does succeed, then what is stopping Democrats from instituting single payer or a much more needed climate plan.
The opposition is predictable with the Jarvis Taxpayers Association and Chamber of Commerce being the notable opponents here. As always, even the slightest attempt to increase taxes on the rich and businesses will be met with hostile opposition by their lackeys. And the ads that have been flooding TV have been outright lying about the extent of change Prop 15 would be. There is no real argument against this proposition which is already going out of its way to protect homeowners and small businesses.
Polling has mostly looked good for Prop 15, mostly because in such a heavy Democrat state, seeing the entire Democratic Party and its various interest groups all uniting behind this issue means it’s going to start at a very strong base of support. As discussed in my Bernie 2020 retrospective, Democratic voters have a big follow the leader dynamic. They like and trust their party leaders and seeing this universal amount of support means there is a strong guaranteed floor for this proposition as opposed to some less supported progressive initiatives of the past.
The fundraising has also been very impressive behind the pro side, with 42 million total in cash contributions being hauled in compared to the 29 million of the opposition. Expenditures are more even at 26 million to 21, but this combined with strong Democratic support means at worst we are going to see a very close contest at the ballot. Fundamentally here we see a battle between teachers unions and corporations for education funding through commercial and industrial property tax. As hyped as Prop 13 has been as a pillar of California politics, this type of change fits the Goldilocks measure for a Democratic Party always hesitant to impact their own donor class or step outside of political consensus. I would expect this to pass, but if it doesn’t it means that prospects for greatly changing the tax structure in California looks grim. If it passes, there should be questions about why the Democratic Party in California has slow rolled progress here as much as possible, especially as multiple existential threats are cascading before us.
