After Prop 30, What’s Next? Reform Prop 13.

Pub date November 19, 2013


By Matt Haney

Proposition 30 was a big deal: It raised over $6 billion a year by increasing taxes on the wealthy, balanced the state budget, and allowed our K-12 and higher education systems to put an end to mass layoffs, exploding class sizes, and ballooning tuition.

But one year later, it’s about time we ask ourselves: What’s next?

Even after Prop 30, the under funding of education and essential services remains, with California still near the bottom nationally in K-12 per pupil funding. Prop 30 was a step forward, but we all knew that we ultimately would have to take on the “Godzilla” of California tax policy: Proposition 13.

Since its passage in 1978, Prop 13 has decimated public education and essential services in our state. Per pupil support in California plummeted from top 10 in the nation to bottom 10, and the tax burden shifted away from businesses and onto individuals. As state investments in services and education went down, poverty went up.

California voters originally passed Prop 13 mainly to protect homeowners. But due to loopholes in the law that prevent regular reassessment of commercial property, large commercial property owners are getting a multi-billion dollar public subsidy. Many commercial property owners are paying taxes at rates that are nearly unchanged from decades ago. Chevron alone is under-taxed by a billion dollars!

Reforming the commercial property tax loophole in Prop 13 could bring in over $7 billion dollars annually, most of which would go directly to education. Despite new funding from Prop 30, our schools desperately need greater investments if we are going to provide a 21st century education for all of our children.

Prop 13 has long been viewed as the “third rail” of California politics. Talk about reforming it, and risk your political career. Yet recent polls show an openness from Californians to reform Prop 13 to ensure more regular value reassessment of commercial property. Demographic change, voter education and registration, and the victory of Prop 30, have shifted the political landscape.

The San Francisco School Board recently joined dozens of School Boards, City Councils, and Board of Supervisors across the state in calling for the reform of Prop 13 through a statewide ballot initiative in 2016 or sooner. The strategy, led by organizations like Evolve California and California Calls, is to ramp up the pressure from the ground up. Cities, schools, and communities are the canaries in the mine. We have experienced Prop 13’s carnage firsthand, and we cannot be silent.

Just as we did with Prop 30, Californians deserve a choice: fully fund education and essential services, or maintain a broken and inequitable tax system. We can’t have both. Next time the stakes will be even higher, so it’s critical that we start preparing for this fight now. Let’s get to work.