|By Jon Coupal – January 8, 2024
Can meaningful tax reform advance, or even survive, in progressive blue states? In California, this is not just an academic question. Proposition 13 has been under constant assault since its passage in 1978. But the core of Proposition 13 – the one percent tax rate cap on real property and the two percent limit on annual increases in taxable value – remains unscathed.
Prop 13’s popularity over four decades has remained constant even as the California of Ronald Reagan and Pete Wilson has morphed into one of America’s most liberal states. Now, two-thirds of both houses of the California Legislature are held by Democrats, as well as all statewide elected offices. And yet polling suggests that if Prop 13 were on the ballot today, it would still pass by more than 60% just as it did in 1978. (Prop 13 even survived an effort to strip its protections from “evil” corporations when voters rejected the “split roll” initiative in 2020).
In assessing Prop 13’s continued survival in 2024, it is helpful to consider what has happened to established tax reform measures in other states that have drifted from red to blue. In Colorado, the Taxpayers Bill of Rights (TABOR) limits state government revenue growth and it requires taxpayer refunds of any surplus. In 2022, the TABOR surplus refund was $750 per taxpayer. Like Prop 13, TABOR has achieved iconic status with Centennial State voters.
This past November, Colorado’s political leadership thought they had a shot at weakening TABOR because Democrats (and their union allies) were dominant. Politically, Colorado bears a striking resemblance to California, with Democrats holding all constitutional offices and a supermajority of legislative seats (69%). Another similarity is that the political elites in Colorado hate TABOR just as much as the political elites in California hate Prop 13.
That dislike of TABOR drove the Governor and the state’s legislative leader to put Measure HH on last November’s ballot, which would have raised the caps on what the statehouse can tax and spend. Gov. Polis and Democratic legislators were salivating over the additional $42 billion that HH would generate by 2040.
But Colorado voters would have none of this and crushed Measure HH by over 60%. This despite a misleading ballot label (sound familiar?) that Democrats slapped on it in an attempt to fool voters that HH was something that it was not.
What does the Colorado experience with Measure HH portend for California? If anything, it shows that citizens even in deep blue states remain distrustful that politicians will voluntarily control how much they tax and spend. This has direct relevance to California voters who will have an opportunity to advance taxpayer rights with the Taxpayer Protection and Government Accountability Act (TPA) slated for this coming November’s election.
TPA will restore key provisions of a series of voter-approved ballot measures, including Prop 13, that gave taxpayers, not politicians, more say over when and how new tax revenue is raised. Over the past decade, the California courts have created loopholes in long-established tax law and policy. TPA closes those loopholes and provides new safeguards to increase accountability and transparency over how politicians spend our tax dollars.
The reaction to TPA by California’s progressive leadership has been nothing short of unrestrained hysteria. First, their allies in the municipal associations, especially the League of California Cities, began a coordinated campaign of disinformation claiming that the measure somehow restricts the right to vote on tax measures when the opposite was true.
Next, the California Legislature jammed through Assembly Constitutional Amendment 13, a cynical attempt to derail TPA by changing the rules for passing certain kinds of constitutional amendments — specifically, initiatives that protect taxpayers by requiring a two-thirds vote to raise taxes.
Finally, in full realization of both public and private polling revealing that TPA will likely be approved by the voters, Gov. Gavin Newsom and the Legislature filed a lawsuit to knock TPA off the ballot before voters have a chance to weigh in. (So much for Democrats “protecting democracy.”) Serious legal scholars have noted the abject lack of legal merit to this extraordinary ploy but, this being California, nothing can be taken for granted.
Assuming, as we must, that the legal challenge to TPA will fail, California taxpayers will have a golden opportunity to put California back on track toward fiscal sanity next November. And just like the voters of Colorado, they will be unlikely to fall for the tactics and dissembling of the tax-and-spend forces controlling Sacramento.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.