The Case Against California: Prop 13 Declared Innocent

You hear it all the time: California’s in such a mess “because of Proposition 13.”

You probably wonder how that initiative, passed way back in the ‘70s, could be so key.

Well, it was the first of a long line of voter-instigated tax limitation measures, and it made politicians ache with frustration. Politicians LIKE spending money; Proposition 13 limited, somewhat, their greedy quest for ever more money to spend.

But did it really unbalance California fiscal policy?

Chris Reed, writing in the San Diego Union-Tribune, explains how nutty this charge really is:

[S]ince shortly after Prop. 13’s adoption, property tax revenue increased by 579 percent. That is not a typo. It went up 579 percent.

During the same span, population went from 24 million to 38 million — an increase of 58 percent.

Reed checked his numbers against the inflation rate, and found that “property tax revenue has increased by more than triple the combined rate of inflation and population growth.”

He did a little more checking and learned that property tax revenues went up faster than any other major revenue source!

So Prop 13 simply cannot be the reason for California’s impending bankruptcy. Though the measure limited tax rate growth, and helped homeowners, it did not unbalance the budgets.

Humungous increases in spending did. Politicians need look no further than their own projects.

This is Common Sense. I’m Paul Jacob.

This is cross posted from Paul Jacob’s daily commentary at ThisIsCommonSense.com