Reforming Proposition 13

I voted for Proposition 13, the ballot measure in 1978 that completely restructured California's tax laws.  In the decade + leading up to 1978 property values had been shooting up, so property taxes had also been rising rapidly threatening some peoples ability to continue to own their home, and the legislature had been frozen in partisan gridlock.  Conservative Republicans alarmed over the growth of government had evolved toward a philosophy summarized in the phrase "starve the beast" and Prop 13 seems to have been developed with that philosophy.

Prop 13 was sold as saving peoples homes, but the people that drafted it had a much larger agenda.  They inserted a little noticed clause that required a 2/3 vote to authorize almost any new tax, or increase an existing tax.  That clause has crippled California's ability to finance needed infrastructure.  The University system that was at that time widely considered the model for the world, the system that provided top quality, inexpensive education to the State residents, has morphed into a system that leaves students without well to do parents so indebted upon graduation they risk being financially crippled for life.  Our roads, bridges and freeways have deteriorated to the point we lose billions of dollars a year in lost productivity, and damage to our vehicles.

Some are fighting to get the pendulum swinging back the other direction.  To return to pre-Prop 13 days where governments have great freedom to tax as they see fit..

What if  instead we stop the pendulum swing and develop a law that provides long term stability?

Prop 13 has two main impacts:

1.  It limits the authority of taxing entities to increase the value of the property, so rather than being taxed at the actual current value, you are taxed at the value at which you bought the house, plus a maximum of 2% per year.    This protects homeowners from increases in the expenses they build into their budgeting, but the corollary effect is if inflation exceeds 2% governments revenue is cut.

2:  It requires a 2/3 vote to impose additional taxes.

These two limitations decimated local governments finances when they took effect, and so the State stepped in and started creating the horribly complex and disfunctional revenue system the state now endures.

How do we fix it without going back to the old system that undermined peoples ability to own a house?

1.  We should keep the 2% per year limitation in place, but give government a lien on the house that entitles them to a piece of the sales pie to the extent housing market inflation has exceeded 2% per year.

2.  We should repeal the 2/3 vote requirement and replace it with a limitation that the maximum vote that can be required to enact a tax cannot exceed the percentage of the vote that enacted the vote requirement.