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July 22, 2012

Another View: State's problem is overspending, not Prop. 13

Despite its title, Dowell Myers' commentary on Proposition 13 repackages the same tired arguments against Proposition 13.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, is responding to the July 15 Forum article "Is Prop. 13 behind the times?" The commentary said that homeowners no longer need to be worried about rapidly rising property values and that in searching for "a reliable revenue source for freeways, schools and other public services, we should consider how Proposition 13 should serve us in the future."

Despite its title, Dowell Myers' commentary on Proposition 13 repackages the same tired arguments against Proposition 13. While giving lengthy lip service to the problem of runaway taxation that Proposition 13 was designed to cure – perhaps in an attempt to appear balanced – the author then launches a critical assault eight paragraphs in. The "genius of Proposition 13," according the Myers, "was that it allowed residents to outvote the people who weren't here yet." So now we know the professor believes that Proposition 13 was a scheme to allow those who owned homes in 1978 to avoid "paying their fair share" and shift the cost to newcomers.

Of course, the actual goal of Proposition 13 was to provide certainty in taxation so that those buying a home – usually a 30-year commitment – would have predictability in taxation and the reasonable expectation that they could budget for their taxes and not lose their homes to the tax collector. Indeed, when the U.S. Supreme Court upheld Proposition 13 in 1992, the justices acknowledged that the measure had the impact of stabilizing neighborhoods.

Professor Myers claims that "the old-timers have reaped tremendous gains in housing wealth." So he believes the elderly are wealthy because their homes have appreciated in value? This ignores the fact that these are "paper profits" from which homeowners derive no benefit unless they sell.

Finally, Myers' agenda is revealed when he talks about spending more on early-childhood programs and higher education. He wants more money from homeowners and Proposition 13 is in the way. What he overlooks is that California already ranks 10th in taxes per home. Perhaps he wants to push California into having the heaviest property tax burden in America just like our sales tax burden.

As a USC professor, Myers would do well to go back and consult with one of his former colleagues, professor John J. Krilin who, while holding the Olsen Chair in the USC School of Public Administration, wrote that government has more money, after adjusting for inflation and population growth, than prior to the passage of Proposition 13. He said the quest for more money has come about because, since the passage of Proposition 13, government has made a conscious decision to shift spending to social-welfare programs.

So, for the hundredth time, the problem is not Proposition 13, but rather California's addiction to profligate spending.

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