Willie – The Man, the Myth and the Era
California’s Initiatives
by
Marcus McGee
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Willie – The Man, the Myth and the Era
California’s Initiatives
Copyright © 1995, 2011 by Marcus McGee
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INTRODUCTION
This book attempts to explain the history and the significance of the Initiative Process in the State of California.
In the constitution of the State of California, enacted in 1849, under Article IV, Section 1 provided that the Legislative power of this State shall be vested in a Senate and Assembly, which shall be designated The Legislature of the State of California. To that end, we currently pay our 120 state legislators roughly $100,000 each per year, plus a $146 per diem and provide other perks so that these members can focus on making laws to the benefit of constituents and California.
However, the Legislature has not always proved itself responsible and responsive to the will of the people it was meant to represent, yielding instead to the designs of special interests, which have used money and other enticements to elect and influence legislators to prioritize their issues of concern above those of represented voters.
The initiative process was established in California on October 10, 1911, as a result of voter frustration with the influence of the Southern Pacific Railroad on the Legislature. Then Governor Hiram Johnson led a populist movement, which offered the initiative and the referendum, giving the people a mechanism to propose constitutional amendments and statutory revisions, and to adopt or reject those proposed.
The direct initiative was a method for the voters to bypass the legislature and have an issue of concern put directly on the ballot for voter approval or rejection.
The indirect initiative, on the other hand, was a method by which the voters could propose desired legislation to the Legislature. Upon adoption, the petition was transmitted from the Secretary of State to the Legislature, which had 40 days to enact or reject without change or to amend the proposed law. If the Legislature failed to enact without change or amendment, or if it rejected the proposed law, the Secretary of State had to submit it to voters for approval or rejection in the next general election. In the event that the indirect initiative was accepted without change or amendment by the Legislature, it then became law.
Unfortunately, the indirect initiative was repealed in the 1966 November 8 election, in a time which ironically marked the beginning of the proliferation and abuse of the direct initiative process in California. Instead of being proposed to the Legislature, as provided with the indirect initiative, many current adopted proposals end up before the California Supreme Court. The problems with “legislation by initiative” are twofold.
The first issue involves fiscal viability. In the Legislature, laws requiring funding must pass though the Assembly Ways and Means Committee and the Senate Finance Committee to make sure they are fiscally sound. These same laws must pass though Assembly and Senate committees to test for legal soundness, to make sure the proposals are in fact legal and do not create whole new sets of problems and issues worse than those meant to be corrected.
Thus “legislation by initiative” is an ineffective method for proposing laws in California. It was meant as a safeguard to the people in extraordinary times, when the Legislature behaved irresponsibly and was unresponsive, until the voters could elect more responsive representatives. Instead, it has become a tool for special interests to subvert and bypass the legislative process. And it has provided the means for our paid legislators to hedge and hide. It has given them political cover on the most important issues facing Californians.
Rather than taking up risky issues involving taxation, education, spending, crime and punishment, immigration, affirmative action, gaming and gay marriage, our well paid legislators sit safely on the sidelines to watch special interests manipulate and influence voters into passing poor laws, sometimes illegal and sometimes against their own stated objectives and goals.
Creating legislation is appropriately the job of our paid legislators, and so the focus of voters should be electing responsible and responsive legislators to represent them. That being done, voters should monitor, but they should not “mettle” in the legislative process, which is to their own detriment.
California, once touted as “the fifth largest economy in the world,” has been in decline for years, going from huge budget surpluses and taxpayer refunds to record deficits, in the billions of dollars, with no end in sight. And though Californians apparently love their initiatives, many if not most of these proposals are introduced, sponsored and funded by special interests, and some of these initiatives have led to the decline and ruin of the state.
The following is an examination of some of the most significant direct initiatives enacted during “The Willie Brown Era,” and the motivations and debates that accompanied their passage or rejection. At the end, I will propose my own solution, which not surprising, is unoriginal, but sensible.
Note: These chapters were completed in 1994-1995
Willie – The Man, the Myth and the Era
PROPOSITION 13
AND OTHER MAJOR INITIATIVES
THE WILLIE BROWN ERA
In December 1964, young San Francisco lawyer Willie Brown came to Sacramento to begin the first swearing-in ceremony of the more than fifteen bi-annual oaths of office that would involve his participation. The ceremony, three decades later in December 1994, would be his last as an Assembly Member.
His thirty-one years in the California Assembly coincided with a separate and unique period for politics in the state, which can aptly be called “The Willie Brown Era.” When he entered the Assembly, then Speaker Jesse Unruh was an undisputable “boss” in state politics. In fact, Willie’s election marked the beginning of a contemporary Legislature, as Unruh modernized and strengthened it by reducing committee sizes and assignments, hiring full-time staff to aid committees, hiring staff for the Assembly itself and raising legislative salaries. Unruh’s bold measures caused many to credit him with California converting to a full-time Legislature. Jesse Unruh also consolidated and strengthened the powers of the Assembly Speaker and party caucus.
Willie eventually was heir to that awesome power and used it in ways even “Big Daddy” Unruh could not have imagined. Yet during that thirty year period, California politics have evolved more radically than at any other period in state history.
The use of the statewide initiative was merely one element of that evolution, but it was perhaps one of the most significant and potentially insidious developments. An examination of state records related to laws and government will provide various other elements of revolutionary change in the era.
Notwithstanding, Willie Brown was the one man who played important roles in nearly all the components of California’s evolution during the period. It is impossible to consider the evolution of the direct initiative in California without also considering Willie Brown and the influence he has asserted on the process. Likewise, it is impossible to consider an inquiry into the life of Willie Brown without also considering the political background and various elements in the evolution of the initiative as they have come to influence his political and personal life.
I can demonstrate how inter-related Willie has been to the initiative process by referring to the many measures in the late 1980s purposed to limit his power as Speaker and various other policy measures he went out and defeated, but that is not necessary. I need only refer my audience to Proposition 140 of 1990, the term-limits initiative, a statewide measure purposed to achieve what no man had been able to accomplish: Get Willie Brown.
Willie had said that he wanted to be Speaker “perpetually,” but in June 1995 he was forced [indirectly by term-limits] to relinquish his speakership to Doris Allen, a Republican. Thus, as it was the consequences of a passed initiative that precipitated an end to “The Willie Brown Era,” the significance of a chapter on the subject cannot be underestimated.
The legislative power of this State is vested in the California Legislature which consists of the Senate and the Assembly, but the people reserve to themselves the powers of initiative and referendum.
circa 1912, Article IV, Section One
Constitution of the State of California
By definition, as contained in the California Constitution, “the initiative is the power of the people to propose statutes and amendments to the Constitution and to adopt or reject them.”1 This makes reasonable sense, as the drafters of this addition to the original Constitution certainly realized that there would be extraordinary times when the California Legislature was out of touch with the will and concerns of the people.
The inherent remedy for inadequate representation lies in the power of the vote: the ability of the people to reject unresponsive legislators and elect true citizen representatives. With that in mind, State Senators are required to face voters every four years and State Assembly members are accountable to constituents every other year. Clearly then, the initiative was proposed to be an extraordinary measure, meant to allow the people to “initiate” action in the absence of responsive leadership in the legislature.
The people, then, would reasonably elect more compliant representatives in following elections, so that the initiative could be preserved as it was meant to be, as an extra ordinary measure. It was not, by any interpretation however, purposed of undermine or obviate in some way the finely-tuned and necessary legislative process.
Since the early 1970s, Californians have seen literally hundreds of peoples’ initiatives on remedies ranging from tax reform to regulation of insurance companies to term limits [see Chapter 35], various litigious issues, illegal immigration, welfare, and affirmative action. As a result, since the early 1970s, these same Californians have, over the course of twenty years, come to discount the legislative process and the goodwill and ability of the very officials they have elected to enact laws.
Since the early 1970s, Californians have unwisely “meddled” with the process of lawmaking and have reaped many unfortunate consequences (some yet unrealized) related to this self-destructive “meddling.” It does not seem sensible or proper for the people of the State of California to spend millions of dollars to elect 120 men and women to office, pay each in excess of $100,000 per year in salaries, per diems, and benefits, entrusting them with the legislative process, and then allow special interests, employing professional marketing firms, to confuse and ultimately undermine the State’s appropriate method for making laws by employing this “direct legislation.”
After all, the state’s citizen representatives are elected to voice the concerns and to address the needs of the people. Quite properly, groups seeking action or redress can go to their elected representatives to express desire for the creation and enactment of some rule or law. Those representatives then, are bound by an “explicit trust” to introduce their propositions to the legislative body, and these groups seeking to initiate new laws may be called to speak before various committees relating to the propositions as written.
If any representative disregards the “explicit trust” of the voters within the district and does not address their concerns, then it is the obligation of the constituency not to elect him or her to another term. Just as responsible legislators are elected by responsible voters, negligent and unresponsive legislators are given their place by careless and improperly-motivated voters.
Considering such, just what is it these representatives are elected to do? To enact laws for the benefit of the people of California? Or to blindly oppose the other party or any given leader and his policies? To represent the opinions and concerns in a given district within a body, representative of the entire state? or to elect an Assembly Speaker who is supported by the will of the people?
Pursuant to the record of California voters, it is not clear that the state’s voters understand the scope of their legislators’ responsibility to the district, the State, and the individual parties. For example, it is interesting to note that in 1990, when through an initiative [Proposition 140] the people voted in term-limits, they uniformly re-elected their own incumbent representatives in all but three of 80 Assembly districts.
Clearly, this seeming contradiction suggests that in 1990 the people weren’t simply fed up with incumbent legislators, but they were insinuating something else. It seemed that within most districts, voters believed they were electing good representatives, but that the seeming useless or corrupt politicians were being elected in other districts by ignorant, easily-manipulated voters.
In the end, it seems that this unprecedented use of the people’s power of initiative came about not because the people do not believe good legislators can be elected, but rather, Californians have little faith in the sensibility and goodwill of “other” Californians to vote responsibly.
Ironically, if Californians truly do not trust fellow citizens to elect trustworthy and competent legislators, then they should be duly concerned with the proliferation of the initiative process in the state. If the voting populace in California is truly incompetent, then voters will be and have been exploited by a process which allows any proposition on the ballot regardless of its merit, viability, legal implication, or fiscal soundness, provided the allotted number of signatures have been submitted to and verified by the Secretary of State.
If voters cannot elect good and decent officials, then how can they possibly analyze and sort through all the often misleading propaganda surrounding these initiatives in order to enact good laws? Nevertheless, even if it is assumed that citizen groups draft these direct legislation propositions with the best of intentions, then the initiative inherently is clearly not an instrument purposed to bring about reform. Proposition 13 of June 1978 is an effective example of the problematic nature of reform through peoples’ initiatives.
Before considering the specifics of Proposition 13 however, it is incumbent upon Californians to contemplate the spirit and motive of the drafters of Article IV, Section One in the California Constitution. The language was added as a result of the Progressive Movement, a nationwide reform effort that occurred between 1906 and 1916 involving opposition to Southern Pacific Railroad’s political machine.
Prior to this time the SPR, this single entity absolutely dominated the selection of national and state officials by poisoning the election process with vast sums of money, SPR groomed candidates, and misleading propaganda. The resulting elected officials, quite improperly, were beholden to the Southern Pacific Railroad rather than the citizens in the districts that they claimed to represent.
As a result, the California legislature was truly “out of touch” with the people of the state. According to the record, the people of the state appropriately realized circa 1912 that an effective remedy for the lack of proper and responsive representation was that the people should reserve a portion of legislative power for themselves. That being so, the people reserved the right to enact essential legislation through an initiative process when the “out of touch” State Legislature was reluctant or unwilling to address the State’s major concerns.
Eventually the Railroad’s political machine lost influence and fell from the forefront of California politics, but the power of the initiative properly remained. The record suggests that Californians seemed to trust their elected representatives and the legislative process for the next six decades, employing their power to enact law only rarely. In fact, in between 1916 and 1972, there were exactly thirty-two approved initiatives.
Proposition 1, dealing with Alien Land Law, came in 1920, and some twenty-eight others were approved sporadically through a fifty-six year period. From 1972 through 1995 [a twenty-three year period] however, voters have seen over one hundred seventy initiatives and approved thirty-seven.2 What is perhaps more telling however, is not the number of initiatives seen and approved, but the recent explosion in the number attempted and the identity of many of those who back these measures.
In 1990 alone, although many of the proposed initiatives did not qualify for the ballot, it is noteworthy that an unprecedented 75 individual measures were attempted. Proposition 13 is significant because it marked the beginning of the proliferation of direct legislation in California and the approach taken by its drafters, Howard Jarvis and Paul Gann, would serve as a model for the ultimately destructive era which was to follow.
PROPOSITION 13 – THE JARVIS-GANN INITIATIVE 1978
What situation or event, it seems proper to ask, necessitated the need for an initiative which professed to bring about beneficial property tax reform in 1978? During the late 1960s and most of the 1970s, property values in California rose at an unprecedented rate. This was especially true in southern California, where it was not uncommon for a home purchased at one price to appreciate by one thousand percent in five to ten years.
By design, the counties in California had the power to assess and collect needed taxes based on property values. These taxes would be used for school, fire, and police districts, for libraries, and for other county concerns. As described in an interview with California Superior Court Judge Irving Perluss, who had written opinions on the subject, generally the county assessor would determine individual property values relative to the overall value of the county and fix taxes accordingly.3
Property taxes rose proportionately to property values, which were skyrocketing. There is no question that inequities existed in the manner these taxes were assessed, so that it was not difficult to cite horror stories of individuals who were paying annual taxes in excess of ten percent the purchase price. Many retired Californians were understandably concerned that they would lose homes because, on fixed incomes, they would eventually be unable to pay ever-rising property taxes.
Others were outraged at the inequity in assessments and believed they were bearing a disproportionate and unfair share of the tax burden. To make matters worse, counties typically ended years with a surplus and seemed unwilling to adjust taxes downwardly to relieve any unnecessary burden to the people.
It was those fears and concerns that Mr. Jarvis, Mr. Gann and other so-called tax crusaders used in order to create an environment of anti-tax hysteria over the course of ten years. Harnessing the burgeoning anti-tax rhetoric and propaganda, Mr. Jarvis and Mr. Gann rather effectively were among the first to use mass media to exploit the very public hysteria and resentment they had worked to create over a decade, disguising the true beneficiary of the initiative, their own special interest.
Certainly the passage of the direct legislation amendment brought relief to some Californians who were being taxed unfairly, but the greatest beneficiaries of Proposition 13 were the major property owners – the individuals and groups who owned large apartment complexes, business parks, and real estate development companies – these groups were the special interests for whom property tax reform was proposed.
Clearly, the incentive was there. Whatever benefit the average California property owner received was then for them multiplied one hundredfold, one thousandfold, and in some cases, even more, and endures until this day. After years of selling tax reform initiatives to the people, money which had formerly been paid in taxes became profit to these special interests, but not without a profound cost to the State, its counties, and by relation, its citizenry.
Yet the greatest disadvantage with bringing about reform through initiatives is that, while they can be effective at solving a specific inequity within a specific time frame, they often bring about an entirely new set of problems in the end, and some of these much more formidable than the dilemma posed at the beginning. So the question is put: What is the legacy of California’s Tax Limitation Constitutional Amendment? In other words, what inequities did Proposition 13 solve, and what new set of problems did it create?
SOLUTIONS AND ENSUING PROBLEMS:
1) Amendment imposed limits on amount of property taxes that could be collected by local governments.
This limit was set at one percent of the property’s full cash value, from the owner of county assessed real property. Immediately prior to the passage of the proposition [fiscal year 1977-78], cities, counties, schools, and special districts collected about $10.3 billion in property taxes.4 In addition, the State gave about $1.2 billion to local governments to compensate for business inventories and property exempt from taxation so that the total local property tax revenues totaled about $11.5 billion, roughly 2.7 percent of the full cash value of all taxable property in California.
Thus it follows that the amendment reduced property tax revenues by 1.7 percent and local government coffers by about $7.6 billion. For local governments, special districts, and schools, this significant reduction and resulting shortfall was a major cause for alarm. After all, cities received 27 percent of their income from property tax revenues, counties got 40 percent, schools counted on 47 percent, and special districts needed even more [fire districts received about 90 percent5]. Over time, one might expect that the State of California to become insolvent, or that the state would have major difficulties at balancing its annual budgets.
2) Amendment restricted growth in the assessed value of property subject to taxation.
These restrictions were accomplished by rolling back 1978 assessed values to the values reflected in 1975-76, and then limiting any increase to no more than two percent per year as long as the same taxpayer continued to own the property. The restrictions served to mitigate the concerns of retirees and others who believed they would eventually be taxed right off their properties.
This portion of the amendment did not in itself create ensuing problems, as is evident in other areas. However, it should be noted that business property owners have benefited from this provision far more than homeowners, as business property is typically held longer than residential property.
3) Amendment required a two-thirds vote of the Legislature to increase state tax revenues.
Prior to 1978, the Legislature could increase taxes by a majority vote in both houses and approval by the Governor. The amendment made it virtually impossible for the Legislature to increase state tax revenues, except in extreme circumstances, as the Legislature and Governor did approve a special tax increase for a limited period in 1989 after the San Francisco earthquake.
Notwithstanding, the amendment virtually eliminated any tax increases proposed and approved by the Legislature, even in cases that would serve the best interests of the state. Thus inundated by complaints and pleas from cities and counties for needed funds, concerned legislators were powerless to lend assistance.
4) Amendment authorized local governments to impose certain non-property taxes if two-thirds of the voters gave their approval in a local election.
Once again, property owners were protected by the makers of the amendment, as voters are not easily convinced or disposed to impose higher taxes on themselves for any reason, as indicated by the record since June 1978.
SCOPE OF THE ARGUMENT
The affirmative side was held by Howard Jarvis, Chairman of the United Organization of Taxpayers and Paul Gann, President of Peoples Advocates, who were joined by various legislative leaders in the effort to pass the initiative.
Within the first paragraph of the argument in the June 1978 Voters’ Pamphlet, Mr. Jarvis and Mr. Gann quoted then President Jimmy Carter, who allegedly said, “Our tax system is a National disgrace.” As the argument for the amendment followed from there, Assembly leader Paul Priolo and noted UCLA tax expert Dr. Neil Jacoby suggested that Proposition 13 was a tough but legitimate solution for the tax problem, and that the people would save [$7 billion] “seven thousand million dollars every year for themselves.”
Mr. Jarvis and Mr. Gann also suggested the “amendment would make rent reductions probable.” To allay the concerns of voters worried about the effect the amendment would have on the State’s public education system, Mr. Jarvis and Mr. Gann wrote “The amendment… DOES NOT prohibit the use of property tax money for schools.”
The written argument was followed by an invective against the legislature and government by Republican State Senator John Briggs, who promised, “Your Yes vote will NOT require a reduction of vital services like police or fire, nor any tax increase.”
The rebuttal to the argument was written by Houston Flournoy, former legislator, former State Controller and USC Dean, Center for Public Affairs, by Los Angeles Mayor Tom Bradley, and by California Common Cause State Chairman Gary Sirbu.
The rebuttal cited that Proposition 13 “GIVES nearly two-thirds of the tax relief to BUSINESS, INDUSTRIAL property owners and apartment house LANDLORDS… PROVIDES absolutely NO TAX RELIEF for RENTERS… REDUCES drastically police patrol services and fire protection… REQUIRES new taxes to preserve CRITICAL SERVICES… SLASHES current local funding for PARKS, BEACHES, MUSEUMS, LIBRARIES and PARAMEDIC PROGRAMS… PENALIZES our school CHILDREN by CUTTING operating school budgets by nearly $4 billion, further lowering the quality of education; PLACES a disproportionate and unfair tax burden on anyone purchasing a home after July 1, 1978… INCREASES your state and federal INCOME TAXES and HANDS the IRS nearly $2 BILLION of your tax dollars.” The rebuttal was supported by the LEAGUE OF WOMEN VOTERS, CALIFORNIA TAXPAYERS ASSOCIATION, LOS ANGELES CHAMBER OF COMMERCE, LEAGUE OF CITIES, COUNTY SUPERVISORS ASSOCIATION, and the CALIFORNIA RETAILERS ASSOCIATION.
In an argument against the initiative, the same three wrote, “Proposition 13 invites economic and governmental chaos in California. It will drastically cut police and fire protection and bankrupt schools unless massive new tax burdens are imposed on California taxpayers.”
They labeled the initiative as “a vague, poorly drafted and incomplete proposal, which will seriously damage the economic stability of state and local governments.” They argued that the initiative would increase federal taxes, would slash $7 billion from school and local governmental budgets, so that maintenance of present services would require additional taxes, and would give two-thirds of the property tax decrease to commercial and industrial property owners.
They predicted that Proposition 13, if passed, would “seriously cripple local government services, including police and fire protection. Proposition 13 will force default on many redevelopment and revenue bond issues and prohibit future general obligation bond issues to pay for needed schools, hospitals, and water facilities. Businesses will not locate or expand in California if the local services necessary for economic development and new jobs are slashed.” Calling the proposed amendment an inadequate and irresponsible solution, the writers asked for a “no” vote on June 6.
The rebuttal to the argument against the initiative was written by Mr. Jarvis, Mr. Gann, and State Senator Briggs, who called on voters to resist being frightened by “political horror stories.” They asserted that “Proposition 13 will NOT cut fire protection, police protection, sewers, streets, and lighting or garbage collection… will NOT give business a NEW WINDFALL… [will] not change the tax ratio between residences and business property in effect for 75 years… will stop business from leaving California and bring new companies to California, creating thousands of new jobs… will NOT prohibit the use of property taxes to finance schools… will make lower rents certain… means thousands of extra dollars for you and your family each and every year.”
Legislators on record for supporting the rebuttal and initiative were Assemblymen Robert Cline (R), William Dannemeyer (R), Mike Antonovich (R), and Senator Bob Wilson (D). Once again, they called for a “yes” vote on June 6.
Between 1974 and 1978, Californians saw, at storefronts, at little league baseball fields and at shopping malls, twenty separate initiatives relating to reform of property taxes. Of the twenty, however, nineteen failed to qualify for the actual ballot. When enough signatures were received for a single proposal in early 1978, the Secretary of State designated it Proposition 13 and the movement in California by those who dubbed themselves “Tax Crusaders” was on.
In the initiative, they finally had a forum for public debate over tax reform. Immediately, they criticized the legislature for being slow or unwilling to address the issue of tax reform and proclaimed Proposition 13 to be the all-encompassing solution.
Then there was the issue of the state surplus. Prior to 1978, in each year, the state collected in taxes more money than was actually needed, so that there was typically a surplus, which was held for emergencies. The “Tax Crusaders” declared that the very existence of a surplus was a clear indication that the people were being overtaxed.
Their spirited voices were joined by state officials and legislators, who intensified the debate so that it began to take on a national significance. Jesse Unruh, then State Treasurer, staged a press conference in which he, the state’s chief financial officer, called the surplus “obscene.”
A group of assemblypersons and state senators even actively campaigned for the measure. Governor Jerry Brown, who had linked himself to another initiative in order to first gain office [the Political Reform Act of 1974 – Proposition 9], waffled at first, but he finally tied himself to Proposition 13 in his second gubernatorial election, and once again he was campaigning against the legislature.
Thus in an effort to mitigate criticism and diffuse the debate, attempts were made at the state capitol to bring about legislative tax reform under Assembly Speaker Leo McCarthy and Senate President Jim Mills, but with little effect, as leaders could not muster needed support on specific reforms. The debate at the capitol was heated and fraught with problems that one former assembly member described as “personal politics.”
Finally convinced that the legislature was unable and too steeped in political gamesmanship to bring about solutions for legitimate problems in the state, California voters approved Proposition 13 by a 65% to 35% margin on June 6, 1978. That fateful day, in the opinion of many, marked the beginning of decline for California, “the greatest State in the Union.”
LEGACY
The impact on taxpayers was immediate and substantial. True to promises made in the campaign for the initiative, property owners saved literally thousands of dollars on their taxes as some even received rebates. Southern Californians generally fared better than their northern counterparts, but overall, commercial property owners were the greatest beneficiaries.
This windfall to many Californians was no surprise. After all, the constitutional amendment allowed property owners to pocket seven billion dollars which had formerly gone to pay for schools and services in cities, counties, and special districts.
The negative impact to the State was significant and enduring. During the hotly-debated campaign to pass the initiative, Howard Jarvis and Paul Gann made several specific assurances to California voters relating to inherent benefits and possible pursuant problems:
1) “… This amendment will make rent reductions probable.”
There is no indication that rents were ever reduced as a result of the initiative, though a California Department of Finance specialist suggested to me that rents rose slightly less than home values in the ten years pursuant to the passage of the amendment.
2) “… The amendment… DOES NOT prohibit the use of property tax money for schools.”
How generous of Proposition 13’s authors, to “not” exempt schools from getting funding from property taxes. Especially since, as indicated earlier, schools received approximately 47% of their monies from property taxes.
This supposed assurance was misleading, as “not prohibiting the use of property tax money for schools” is not the same as a guarantee that schools and the state’s education system would not suffer as a result of the initiative.
But when the authors, through tax benefits mainly to commercial property owners, reduced available funds by 7 thousand million dollars every year, the negative impact on schools was inescapable. For the first few years, shortfalls were generally covered by monies left over from previous surpluses, and still schools were forced to be more efficient with the reduced money they received.
In many cases, retiring teachers were not replaced as class sizes gradually increased. But as the years went by, even the surpluses dried up. Worse, California began to see early signs of yearly deficits as a recession rolled in. Still, schools were forced to fight with cities, counties, and special districts for what money they got with no entitlements or mandated guarantees.
During that period, California’s ranking in annual spending per student fell from 23rd in the nation during 1978-79 to 30th during 1988-89 to 42nd in 1995. Fundamentally, Proposition 13 shifted funding control for schools from property tax funding to state funding.
Further, by requiring a two-thirds approval from voters for any local “special” tax, the measure effectively took away the ability of school districts to raise money independently. Without a doubt, California schools and California schoolchildren have been the victims of this initiative’s legacy. Big business and long term property holders have managed to hang on to tens of billions of dollars at the expense of the state’s children. In the meantime, the savings to the average Californian has been meager, and even less for those who purchased homes after 1978.
In an attempt to make up for the disparity created by this shift from property tax funding to state funding, in 1988 voters passed Proposition 98, sponsored by the California Teachers Association and education lobbies, which required that a minimum amount of the annual budget would be spent on K-14 education. Specifically, it required that 39% of the state budget would be spent on education, with minimum guarantees and increases, and it stipulated that the provision could not be suspended without a two-thirds vote of the California Legislature. Labeled the “Classroom Instructional Improvement and Accountability Act,” it also guaranteed that the state would fund 66% of the school budget.
The measure only slowed the inevitable. Since the passage of Proposition 13, California schools have suffered. Teachers have suffered from layoffs, larger classroom sizes and diminished resources, which compromise instruction. Parents have had to participate more financially, and worst of all, California high school graduates have become much less competitive on the college admission level and in the global employment market. And yet, school districts continue to struggle, with some even becoming insolvent.
The actions and decisions of adults often have unintended consequences for children. Clearly, the state of K-14 education in the state of California underscores problem with utilizing broad initiatives, which may or may not be legally or fiscally sound, to solve the complex and hotly-debated problems of the state.
3) The amendment… “will NOT require a reduction of vital services like police or fire, nor any tax increase.”
According to the legislative analyst, local governments were to lose $7 billion in fiscal year 1978-79 and the same amount annually, as local property tax revenues were reduced by 57%. It was appropriately indicated that part of the state surplus could be used to cover part of local revenue losses initially, but the analyst continued,
If the $7 billion in local property tax revenue losses were not substantially replaced, there would be major reductions in services now provided by governments and in local government employment. We cannot predict which particular local services (such as schools, law enforcement, fire protection, health and welfare) would be affected because we do not know how the remaining property tax revenues would be distributed.6
During the debate, when opponents labeled the initiative “vague” and “incomplete,” they were undoubtedly referring to selected holes in the general plan and unclear references from its authors. For example, in Section 1a of the proposal, relating to the maximum amount of any ad valorem tax on real property, it was written: “The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.”7
However, during June 1978 there was no law that would provide for the distribution of those tax revenues. Further, the money was to be apportioned to “districts” within the counties. But cities, technically, were not districts. Did this mean that cities would get no revenue from property taxes? This area was unclear and would eventually be addressed by the courts, along with other specific areas of the amendment. Once again, my object here is not re-arguing the proposal, but to illustrate how inherently, the initiative process is not appropriate as an instrument to bring about major reform.
SACRED COW
With Proposition 13, finally and at last, the so-called “Tax Crusaders” had achieved major property tax reform in precedent-setting California, the most powerful state in the union, and similar property tax reforms followed in many other states across the nation. However, the proposition, as written, was vague and general in several areas as noted previously.
As a result, the approved amendment went through an initial judicial interpretation and adjustment and prolonged criticism from many impacted interests over the years. Notwithstanding, the fundamental precepts of Proposition 13 have remained basically unaltered by voters or the legislature since 1978. Over the years, legislators have been loath, at pain of political death, to propose any measure which in some way opposes this extraordinary action by the people.
Thus Proposition 13 has transcended the bounds of the mere initiative and has taken on a major symbolic status, indicative of a new era in which the people began “to take charge of legislative reform in California.” In its wake lies a legacy of proposed reforms through peoples’ initiatives in the ensuing years.
CAMPAIGN REFORM
Until June 1974, campaign reform through the initiative process was non-existent, but 1974 was the year after Watergate. Impeachment proceedings against U.S. President Richard Nixon were underway, Vice-President Spiro Agnew had resigned in exchange for immunity from criminal prosecution, and closer to home, California Republican Lieutenant Governor Ed Reinecke faced charges of perjury relating to an illegal donation from International Telephone and Telegraph.
As public distrust increased, then Secretary of State and the son of a popular California governor, namely Edmund G. Brown, Jr., used the Political Reform Act of 1974 as a vehicle in order to attain the State’s chief executive office. Along with the People’s Lobby and California Common Cause, he developed and promulgated Proposition 9 which appeared on the June ballot.
According to aspirant Brown and adherents, the measure sought to do away with political corruption through campaign spending limits, restrictions on lobbyists, new rules regarding disclosure of contributions, and the creation of a Fair Political Practices Commission. Suffice it to say that within that political climate, the measure passed overwhelmingly by a 69 to 31 percent margin.8 Interestingly enough, many lobbyists and Capitol insiders have suggested to me that the passage of Proposition 9 played a major role in making the legislature more partisan and less effective.
By imposing such low spending limits for lobbyists [no more than ten dollars a month on any state official or legislator], it has been submitted that the measure actually discouraged if not prohibited communication between legislators and citizens’ groups. Rather than having the ability to sit down with groups to hear concerns and construct reforms, legislators have been more inclined since that time to vote with party leadership on general issues.
Still it was 1974, four years before the age of Proposition 13, and reform through the initiative process was still the exception rather than the rule. It would be a full ten years before voters would see further attempts at campaign reform on the peoples’ ballot.
In 1984, an attempt at limiting campaign contributions, Proposition 40, was rejected by voters, so it was June 1988 before we saw a successful attempt at reform by the people. This proposed reform was embodied in two separate measures, Proposition 68 and Proposition 73. The former sought reform through limiting campaign spending and individual contribution limits and the latter through abolishing the transfer of funds from one candidate to another.
Interestingly enough, both measures were purposed in order to diminish the power of California Assembly Speaker Willie Brown, though without success, as the former was rendered ineffective through skillful political maneuvering and the latter remained tied up in the courts as late as January 1995.9