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Prop. 13 History

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JOANNE FARYON: In 1978 disco was king, Jerry Brown was governor and the people ruled. It was the year California voters protested against increasing property taxes. They voted two to one in favor of Prop 13 - the proposition that rolled back property taxes and forever limited increases. KPBS is working on a special series about the legacy of Prop 13 - and we begin our coverage tonight with a look back. Here is KPBS Producer Andy Trimlett with the history of Prop 13. ANDY TRIMLETT (Narrator): In 1978, everything was going up. Fashion was at a peak and it was a high point for music. MUSIC: You can tell by the way I use my walk, I'm a woman's man. No time to talk. TRIMLETT: But just as Saturday Night Fever was skyrocketing to dangerous levels, so were property taxes in California. Some people saw their property taxes double or even triple from one year to the next. Proposition 13 promised to be the Alka Seltzer of property tax, and people supported it in droves. PROP 13 SUPPORTER: It's kind of like a Boston Tea Party that we're saying "We've had it." PROP 13 SUPPORTER: I voted for Proposition 13 because I believe the taxpayers have just got to tell the government a message that we're mad as Hell and we're not going to take it any more. TRIMLETT: So how did this wildly popular initiative come about in the first place? MUSIC: "(I Can't Get No) Satisfaction" guitar riff TRIMLETT: Around this time, California tax assessors seemed to have a fondness for bribery. In response to mounting scandals, the state legislature passed a bill requiring that all property - homes, businesses, bribes or no bribes - all of it must be assessed at the same rate. This did a lot to clean up corruption. Unfortunately, it also had the unintended consequence of moving the tax burden from businesses to homeowners. Bribes aside, it turns out that businesses had been typically paying higher property taxes than homeowners. MUSIC: I want to rock and roll all night. TRIMLETT: In the 70s, the rest of America began descending on California. This population influx joined forces with soaring inflation rates to dramatically increase the value of homes in the state. Some homes that cost $50,000 in 1974 would go for more than $100,000 in 1978. And as housing values doubled and tripled in some neighborhoods, property taxes doubled or tripled as well. To add insult to injury, California Governor Jerry Brown was sitting on a massive $5 billion budget surplus at the time and did not seem terribly interested in doing anything with it. The state legislature tried to pass a property tax relief bill, but failed by two votes. Brown recommended that "Senators should go home and meditate." But while political shenanigans went on in Sacramento, disgruntled taxpayers were signing petitions. MUSIC: Buddy you're a boy make a big noise. Playin' in the street gonna be a big man some day. TRIMLET: In 1977, two anti-tax crusaders, Howard Jarvis and Paul Gann got together to write what would be called the People's Initiative to Limit Property Taxation, or Proposition 13. Jarvis, widely considered the leader of the Prop 13 movement, was a retired industrialist with a penchant for using words like "hogwash." HOWARD JARVIS: We have a new revolution against the arrogant politicians and insensitive bureaucrats whose philosophy of tax, tax, tax, spend, spend, spend, elect and elect and elect is bankrupting we the American people and the time has to put a stop. TRIMLETT: This was the fourth attempt at a tax-limiting ballot initiative for Jarvis. Just a year earlier, his attempt at a property tax initiative became a footnote next to a Bullock's ad when it failed to gather the 557,000 required signatures to be put on the ballot. But in 1978, everything came together and signatures poured in for Prop 13 - over 1.2 million of them. Prop 13 called for limiting property taxes to 1% of market value, which would mean a 60% reduction in property taxes. This translated to a $7 billion drop in the government's budget. Plus, it would nearly freeze tax assessments at 1975 levels unless property was sold. Furthermore, as Jarvis so eloquently put it, Prop 13 would "make it tough as hell to raise taxes in California," requiring a 2/3 voter approval for any new state or local taxes. Finally, the state legislature caught on. and they panicked. Property taxes were used to pay for schools, fire, police, and libraries. One senator drafted a "Doomsday Bill" in case Prop 13 passed. Another bill, which the legislature raced to pass, was touted as the more sensible option that would avoid catastrophic cuts to government services. This bill went on the ballot as Proposition 8. Interest groups of all stripes arrayed themselves against Prop 13 - the AFL-CIO, Common Cause, the Sierra Club, the PTA. Surprisingly, even though they would receive 63% of the benefit of Prop 13, big business largely jumped in the No corner of the ring. Powerhouse companies like Bank of American, Southern California Edison, and Carter Hawley Hale feared higher corporate taxes and sales taxes that would inevitably come in the wake of property tax reductions. In addition to increases in taxes and cuts to government services, the No on 13 campaign warned that the proposition would take local control away from schools and would leave renters without a dime of tax benefits. But the Yes on 13 campaign was far more focused on the benefits it offered: major tax relief combined with the satisfaction of sticking it to The Man. On June 6, 1978, supporters of Prop 13 dominated the polls in an election with a record-breaking turnout. California voters supported the proposition by a 2-1 margin. MUSIC: We are the champions, my friend. JARVIS: We, the taxpayers, have spoken. We have made clear our goals. Now, we are watching you. It is your responsibility to make Proposition 13 work by cutting the barrels of lard out of the government budget.