Time magazine’s Kevin O’Leary places the blame of the California budget crises squarely at the feet of… the overtaxed citizens of 1978 and their evil Republican overlords!
They begin with the 1978 property tax assessments skyrocketed. Especially vulnerable were seniors on fixed incomes. When then Gov. Jerry Brown and the legislature dithered, conservative activists led by Howard Jarvis put a seductively simple sounding proposition on the ballot. Under Proposition 13, the annual real estate tax on a parcel of property would be limited to 1% of its assessed value and this assessed value would only increase by a maximum of 2% per year, until a change in ownership. Voters responded and Proposition 13 scored a dramatic victory with 65% of the vote. Property tax rates dropped an average of 57%.and the victory of Proposition 13. As California experienced a dramatic escalation in home values,
Seriously, no blame goes to a government that has been wasting money and failing to balance budgets, and instead blames the people who foolishly limited the rate at which property taxes could increase. The proposition O’Leary blames, Prop 13, was the last big act of fiscal conservatism seen by the state of California, limiting the increase in property taxes to 1% a year, unless the property is sold.
More from O’Leary:
“In the first years after Proposition 13 passed, the state was able to get by because it had a surplus,” says David Menefee-Libey, a political scientist at. “But because the state is now responsible for funding local government and school districts the demands on state resources became too great. The second strategy followed by [Governors Gray] Davis and [Arnold] Schwarzenegger has been to finesse the fiscal crisis by using budget gimmicks and by borrowing to bridge the yearly . Now both options are exhausted.”
California has been pretty much controlled by the legislature for years. The governors have fought as best as they could, but the spending has been out of control. (Remember the shut down threatened by Schwartzenegger when he first took office? He was vilified by the press.) The state has had budget surpluses, and the increase in demands for left-leaning special projects has been increasing faster than the GDP increase in the state.
Proposition 13 further altered California politics by requiring a two-thirds majority for tax increases either at the state or local level. This requirement along with a constitutional provision requiring a two-thirds majority to pass a budget – the result of a proposition passed in 1933 – means it is far more difficult to raise taxes or pass a budget in California than in other states. For more than 30 years California has been living with a system of minority rule in which 34% of the legislature or a local community can stonewall the majority. Facing this post-Proposition 13 system, California’s various interest groups have increasingly used the ballot box to protect themselves – but by so doing have mandated budgetary havoc.
But O’Leary carries water for the Left, blaming the state’s troubles on the unwillingness of the people to be taxed more. With the state income tax of California is 9.3%, the sales taxes are 8.25% (often above 10% when including local taxes) combined with a cost of living that puts any earners above the $50,000 Federal/State Tax threshold, it’s absolutely ludicrous to blame Prop 13 on the state’s budget woes. So the heroes are the 60% majority Democrats who want to increase the tax burden on the people and business, not those who are fighting the overtaxing, a state that already hoists a 19.3% tax burden upon people who already pay 30% income tax to the Feds.
Of course, the problem is the property tax and the fact that taxes are just so gosh-darn hard to raise in California, and the evil conservatives who have an objection to handing over more than 50% of their paycheck to the government.