The Good, the Bad, and the Ugly of Proposition 13

By: Karin Attia & Doreen Tivon

What is Proposition 13? -a ballot initiative (a petition signed by a min. number of registered voters which can force a public vote on a proposed statute, constitutional amendment, or ordinance) to amend California’s constitution Enacted by voters On June 6, 1978

What did it do? -The max. amount of any property tax cannot exceed 1% of the full cash value of the property -Also states that a 2/3 majority in both legislature houses is required for future increases in state tax rates ONE PERCENT???

What were they thinking??? - Rationale 1: Voters did not want the old people of California to lose their homes because of high taxes

Consequences This caused the state legislature to cap the rate of local revenue that a school district could receive and to distribute excess amounts among the poorer districts BASICALLY – this is why we no longer offer 1000 history classes

Consequences… This caused an increase in demand for housing, which resulted in higher property values and, consequently, higher taxes…IRONIC?

Consequences… As a result, a large number of California homeowners experienced an immediate and drastic rise in value of their homes, and a rise in tax rates only to be told that their taxes would be redistributed to distant communities GRRRRRRR! Let me unleash my mad Jackie Chan skills on you!

"Jarvis-Gann Amendment" Howard Jarvis and Paul Gann were the most vocal and visible backers of Proposition 13

Aftermath Local governments have also become more dependent on sales taxes for funds (because cities are not earning enough from property taxes) Hence, the burden is on the poor!

Some Interesting Facts… California public schools, which in the 1960s had been ranked #1 nationally in student achievement, have fallen to 48th in many surveys of student achievement At this rate, even the infamous Paris will be smarter than us!

Some Interesting Facts… Because of the reduction of tax intake from Proposition 13, fuding for the following govt. utilities were cut: -Public libraries -Fire department -Police Department Cities also cut water, gas and electricity expenses

Who is affected? Young people, immigrants, and new property owners – they end up bearing the weight of the tax $$$

Recent News… In the 2003 Califonria recall election, Arnold Schwarzenegger’s advisor, Warren Buffett, suggested that Prop. 13 be repealed or changed in order to balance the state’s budget…

Schwarzenegger, believing that taking such a step would be to touch a political third rail that could end his career, said: “If he mentions Proposition 13 again he has to do 500 sit-ups."

Opinion We believe that Proposition 13 should be eliminated because while reducing property tax, it increases our sales tax to a whopping 8.25%!!!! In addition, the government is not able to raise enough money for education, the fire department, the police force, etc… After all, would you prefer to spend a little more money on property tax, or have your kids be complete idiots? The solution seems quite obvious to us.

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