Perspective: Under ACA 1 & 13, property owners would shoulder “burden” of unrestricted tax hikes
Claude Mellan: Hercules Assisting Atlas. Image by Wikimedia Commons
Pepperdine economics prof Gary Galles explains how two proposed '24 amendments would squash California's existing Prop 13 protections (which ensure property owners aren't taxed excessively to fund special projects). Despite County voters' clear support for Prop 13, SJ's City Council has greenlighted ACA 1 & 13, while shaking their fists at the pro-Prop 13 measure called the Taxpayer Protection Act. From the OC Register.
The more easily citizens can leave a jurisdiction, the smaller the burdens its government can impose before driving citizens away. For instance, if the state imposed overly burdensome sales and/or income taxes, relative to the goods and services provided to citizens, a person could avoid them simply by leaving the jurisdiction.
Unlike other state and local government burdens, however, voting with one’s feet cannot avoid the burdens of jurisdictions imposing “abusive” property taxation so easily. The owner of a property bears those burdens (as well as whatever benefits they finance) as long as they maintain ownership, even if they leave. Even if they sell the property, the present value of the difference between expected future taxes and benefits will be capitalized into their property’s sales price, and they still bear the burden, just in a different form.
Because there are greater hobbles on citizen self-protection against property tax-funded bad deals from government, the property tax becomes state and local governments’ go-to source to fund spending initiatives citizens do not support. That is why special property tax protections against such government abuse stay near the top of any honest reformers’ to-do list. That is why Proposition 13’s passage in 1978 was so crucial. But that is also why undermining its protections stays near the top of the to-do list of everyone who wants to pass unjustified and inefficient policies. And that explains why Democrats put both ACA 1 and ACA 13 on the November 2024 state ballot.
ACA 1 would sharply lower Proposition 13’s two-thirds voter threshold to 55% for local special taxes to fund “infrastructure” so vaguely defined that virtually anything could qualify. It would open the door to massive new tax hikes to give Sacramento politicians what they want from property tax-payers without giving them their money’s worth in return.
ACA 13 is more disingenuous. It was put on the ballot to prevent another ballot initiative already set for November 2024 from being able to pass. The Taxpayer Protection and Government Accountability Act would restore Proposition 13 protections that courts have eroded. ACA 13 would undermine the possibility of such a restoration by raising the voting threshold for constitutional amendments to pass from a majority, as it stands now, to two-thirds. That is, it would sharply raise the standard for a Constitutional amendment to two-thirds in order to keep TPA from limiting politicians’ ability to abuse California’s property tax payers by lowering the standard they must meet from two-thirds to 55 percent.
This article originally appeared in the Orange County Register. Read the whole thing here.
Related:
LA Taxpayers Association: It's time we safeguard CA'ns from tax hikes many oppose
Why the City must “prune away” superfluous services and regulations
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