Beware of the Taxpayer Deception Act: It Will Defund Our Future
Despite the vilification of California by the national right and their allies in the media as an un-American hotbed of the left, in many ways our problems stem not from too much but too little redistribution of wealth.
With another budget crisis looming on the horizon along with potential cuts to state and local government services, many cities, San Diego included, will be left to ask voters to raise sales taxes and fees to fund better, storm resistant infrastructure, basic services, transportation and much more.
Much of this is the result of a historic pattern began when a suburban revolt of aggrieved homeowners brought us Proposition 13, which, as I pointed out in this space back in June, ended up, “enshrining a stark generational inequity with regard to housing and even more severe economic and racial inequality in our now deep blue, liberal state.”
And now that San Diego is transitioning from its historically Republican past to Democratic dominance, this legacy still haunts us. As Michael Hiltzik recently wrote in the LA Times
It’s indisputable that the decline of state fiscal management in California began with the passage of Proposition 13 in 1978.
The tax-cutting initiative upended the tax structure that provided most of the revenues needed by localities and school districts, undermining the locals’ control of their own spending.
It was sold to voters as relief for beleaguered middle-class homeowners, but that was largely a scam: The chief beneficiaries have been the richest homeowners and commercial and industrial property owners, who have received billions of dollars in property tax breaks at the expense of residential owners.
In the wake of the pandemic, labor and community activists tried to address this issue by passing Proposition 15, which would have ended this historic inequity, but it was narrowly defeated by a campaign largely comprised of a deluge of lies brought to you by the very corporate interests who have benefited the most from business as usual.
Now, many of the same folks who funded the effort to stop the reform of Proposition 13 are behind a new initiative to permanently hamstring California from raising the revenue necessary to address the multitude of challenges we face with regard to homelessness, housing, education, infrastructure, catastrophic climate change, and more—none of which come ready with cheap solutions.
As Hiltzik again points out:
Their tool, pushed chiefly by the California Business Roundtable, apartment developers and others of that ilk, is the so-called Taxpayer Protection and Government Accountability Act.
The Business Roundtable spent $6.375 million in 2022 pushing the initiative and an additional $770,000 last year; about $310,000 came in 2022 from the Howard Jarvis Taxpayers Assn., named after the chief promoter of Proposition 13, and about $400,000 last year from R.W. Selby & Co., a big apartment developer . . . Fundamentally, [their initiative] would change the rule for the enactment of a tax increase from current law, which requires a two-thirds vote of each legislative chamber or passage by a majority of voters, to two-thirds of each chamber and a majority of voters. Obviously this raises the bar significantly.
The initiative also would redefine numerous governmental fees as taxes subject to the new rule. Perhaps most damaging, it would retroactively invalidate any revenue measures passed since Jan. 1, 2022, unless they’re re-ratified in 2025.
Taken together, “these provisions discourage new government efforts no matter how urgent the problem to be addressed, ... hang like a shadow over budgets to be adopted in summer 2025, ... and impair California governments’ ability to borrow,” a coalition of government advocacy organizations led by the League of California Cities told the state Supreme Court in a friend-of-the-court letter. The prospect of passage is “already undermining certainty and impairing planning in government finance,” they wrote.
Hiltzik points out that opponents of this measure are going to court to try to stop it from appearing on the ballot this November for technical reasons, but, barring success there, they want to underline the deceptive nature of this effort to continue to line the pockets of the rich while gutting our government’s ability to adequately deal with any of the problems we face from social inequities to the climate crisis.
As the Legislative Analyst’s Office explains, if passed, this proposition would lead to “lower annual state and local revenues, potentially substantially lower.”
Thus, in the coming months, it will be incumbent on progressive activists and every Democratic elected worth keeping in office to make the argument that we need a permanent, stable revenue stream to fund the big ideas that would make the California Dream real for most of us.
Failure to do so will result in the inability of the California and local governments to deliver on much of anything as well as an increasingly angry electorate far less inclined to support regressive sales tax measures which disproportionately impact working people. It might even pave the way for an unlikely Republican comeback as voters become disillusioned with perpetually ineffective Democratic rule.
Don’t think it can’t happen here. Thus, some real talk about the essential value of progressive taxes for funding a livable, just future is necessary unless we want to take a huge step backward.