Saturday, April 2, 2011

Was Steve Lopez's Editorial on Prop 13 an April Fool's Joke?

We may have been taken in by the stupidity of this editorial yesterday in the LA Times. If so, good work, Steve Lopez. You got us. If not, well, this is one of the dumbest things we've ever read about Prop 13.

Dumb critiques of Prop 13 generally follow the same script: the law places too severe a cap on property tax revenues, leading to things like budget deficits, crappy public schools, and higher income and sales taxes. And Lopez's editorial is no different. This argument is, at best, misleading. This line of thinking sidesteps the inconvenient fact that Prop 13 passed in 1978, and a government committed to spending within its means would've had plenty of time to take it into account. In other words, the more serious problem is Sacramento's reckless spending, not a 33-year-old law that limits its revenue. And it gives short shrift to more legitimate criticisms of the law, most prominently its emasculation of local governments to Sacramento's benefit and its regressive tendency to favor older, wealthier homeowners at the expense of the young. These issues are sometimes raised in discussions of reforming the law, but they're generally framed as political impediments to be worked around, rather than important problems in need of resolution.

Lopez's piece proposes chipping away at the law in a way that draws more property tax revenue to Sacramento without offending older voters. He suggests gradually phasing in sharper property tax increases while giving homeowners over a vaguely-defined "certain age" a pass on the hikes. And he suggests immediately removing all limits on increases for commercial property owners, who currently contribute about 30% of all property tax revenue in the state. The sheer stupidity of these proposals is, sadly, not addressed in the editorial. We're not sure how Lopez believes that giving older homeowners a pass on tax increases corrects the favorable treatment they receive under Prop 13. And we're not sure how a state with 12% unemployment and an anemic private sector could view a massive tax hike on commercial property ownership as a good idea.

But none of that is a surprise. Politicians and journalists alike tend to view Prop 13 largely in terms of the state's ability to extract money from the public, and this guides their approaches to reform. Maintaining the law's preference for older homeowners is simply a way of solving a political problem for any legislator proposing this, and it's not important to Lopez that his proposal would actually exacerbate the law's inequities. Similarly, the negative economic impact of taxing commercial property in a recession is of no concern if your goal is taking money away from people who have it. And that's what this is really about: getting as much of private citizens' money into Sacramento as possible.


Post a Comment