It seems thirty years or so too late, but a former UCLA chancellor and director of the MOCA in Los Angeles named Charles Young filed suit against the provision in Proposition 13, passed in 1978, that requires a two-thirds vote in the Legislature to raise taxes. The legal theory behind the case mirrors the theory behind the attempted repeal of Prop. 8 this year, which was ultimately unsuccessful.
The legal theory of the suit, which names the Legislature’s chief clerks as the technical defendants, is that when voters passed Proposition 13 in 1978, cutting property taxes and requiring a two-thirds vote for tax increases, it was a “revision” of the state constitution rather than an “amendment.”
The constitution allows amendments to be made by initiative petition but allows revisions – generally a more fundamental change – to be made only through a constitutional revision commission or a constitutional convention.
It’s essentially the same argument that opponents of Proposition 8, the 2008 measure that outlawed same-sex marriages, made in attempting to persuade the state Supreme Court to void that measure. But the court, which had earlier sanctioned same-sex marriages, ruled that Proposition 8 was valid.
I’m a bit surprised that Young didn’t include the single-subject rule in his charges, as the property tax rules and the two-thirds requirement for taxes don’t seem to bear much relationship to one another. Of course, that has already been argued before the state Supreme Court, along with the revision argument, equal protection concerns and about a half-dozen other charges, four months after passage, in Amador Valley, and the Supreme Court upheld the initiative. Here’s the way the revision argument played out back then.
The California Supreme Court held that although Proposition 13 would result in various substantial changes to the constitution, it was only an amendment because the changes were narrowly tailored to the objective of changing the taxation system. Id. at 228. According to the Court, a change in the voting requirement did not amount to a revision of the constitution. The Court further stated it was not uncommon to have similar voting requirements for financial matters, and that the Proposition would not effect home rule. Id. The Court cited Article XIII, Section 20 of the State Constitution that authorizes the legislature to set maximum property tax rates. Id. at 228. The Court concluded this new article, implemented by Proposition 13, would be no more threatening to home rule than Article XIII, § 20. Id. The Court, while not endorsing the Proposition, did state the initiative process was a direct form of government from the people. Id. Finally, the court held that it would not limit the ability of people, through the initiative process, to achieve such a limited purpose of a new system of taxation. Id.
The Court upheld every aspect of Prop. 13 at that time, and the law has withstood multiple legal challenges over the years. Like with Proposition 8, the Court seems loath to overturn a vote of the people, and now we’re 31 years down the road. Of course, this forms the core of Charles Young’s argument, that the effects of Prop. 13 are powerful evidence that it is not merely an amendment, but a major revision affecting the lives of all California’s citizens.
I’m skeptical that this can get off the ground, but I see little harm in it. And maybe putting Prop. 13 on trial, and laying out the effects in sharp detail, could lead to closing the loophole and building a sustainable revenue base.
I suspect this suit may have been aimed for the headlines it created rather than the ruling it desired.
With all the flak aimed at Prop 13 on this and other sites(some deserved, some not) the fact is that it has served as a safety net for many homeowners, small businesses and family farms. I think this sites criticism is that it has served as a safety net for corporations as well.
Since cutting safety nets seems to be the clarion call for some in Sacramento, this one may be shredded as well, but not for the homeowner, small business owner or family farmer. What will be shredded is the safety net for large businesses, corporations, apartment owners, etc. who have come to depend on the benefits that Prop. 13 has provided them since 1978.
A “split roll” that simply distinguishes between homeowners on one side and everything else on the other, won’t pass. But a well designed measure that reduces homeowners property taxes, keeps small business owners and family farmers the same and puts large businesses and corporate property on a non-Prop. 13 track, has a good chance to pass by a public who understands the need for more revenue and a willingness to provide for it as long as it doesn’t directly increase their taxes.
The irony of this Dance to the Death going on in the Capitol is that the GOP’s failure to reach some agreement on increased revenue through suspending certain exemptions or other mechanisms(in exchange for Dems agreeing to suspend certain regulations and provide for a rainy day fund)means that large businesses may be thanking the GOP for increased property tax bills after the November 2010 election.
Intended or not, the passage of Proposition 13 moved the locus of fiscal power away from cities, counties and school districts to Sacramento. However, let’s not forget that one of the main, if not the decisive political argument used by Howard Jarvis for its passage was the then unheard-of $7 Billion SURPLUS in State revenues.
It is also useful to remember that at that time in some counties taxpayers were struggling with double-digit increases in local property taxes in one-year due to their being no cap whatsoever on the amount local government could raise property tax levies during any one year period.
Unfortunately, Jerry Brown didn’t have the sense to either invest that $7 Billion State unallocated surplus in job-creating, green-energy future infrastructure, or absent that, return it to the State’s property taxpayers. As they say on the street, “..What goes around, comes around..”
If he had, perhaps he would have demonstrated that rare combination of fiscal prudence and political visioning which might have spared us all thirty-years of gut-wrenching roller-coaster rides regarding public finance. And we might have avoided the unintended shift of fiscal power from local communities to Sacramento, which has been so-much the cause of our current fiscal hell.
Worse, during the last nineteen of those thirty years, we’ve also had to endure the legacy of the ill-conceived term-limits measures passed by an angry electorate over what was then perceived as Sacramento excess.
Now, some thirty-years later, we’re all facing the hellish combination of the fiscal effects of Prop 13, Prop 140, as well as other strait-jacket fiscal initiatives passed by the electorate. And worse, our Girly-Man Governator and the Sacramento Gang-of-Four, have absolutely abdicated any semblance of fiscal statesmanship and political stewardship which is leading us all to the brink of fiscal insolvency.
As Willie Sutton, the Depression-era bank-robber once said in response to the question why he robbed banks, “..Well, that’s where the money is..”
Well, until the recent mortgage melt-down, global recession, and ongoing State budget travesty, Sacramento was where the State’s money used to be, cause we all, willingly or unwillingly, sent more and more of our hard-earned paychecks up their through the State’s Rube-Goldberg collection of taxes and fees..
That is except all those rich, corporate, politically well-connected, contributors who got $1 Billion in tax-breaks from their Democratic and Republican legislative friends while the average working family of four in California was hit with $1,000 to $1,200 in new State income and sales taxes and fees as a result of so-called Fiscal Year 2008-09 balanced budget bill. What a fiscal, political and moral travesty!
Jhanna’s post is right on the money. We need a fiscally-sound, socially-just fix to the way all State taxes, including Property Taxes are levied, apportioned and collected throughout this State if we are ever to end this state of fiscal madness in Sacramento. Clearly, the Legislative Lunatics are in charge of both the Assembly and Senate Asylums, and our Girl-Man Governator is a poor excuse for Nurse Cratchett..
NostraDemus
I’m not a lawyer, and the whole distinction between an “amendment” and a “revision” sounds would sound like angels doing the pin dance, if we didn’t already know that you can sell civil rights of a class of people at a discount, and it still not being whatever-you-are-not-allowed-to-do-by-initiative.
Now, a 2/3 rule totally deranges the whole concept of majority rule and balance of powers, but somehow, I doubt the courts will find this illegal either.
Dickens was right. The law’s an ass.