“Hijacking the political process”? A “circus atmosphere”? Commentators sniping at the use of the Howard Beal line from Paddy Chayefsky’s movie Network, “I’m mad as hell, and I’m not going to take it any more”? We’ve heard all this before. Before the Internet. Before cable TV.
We’ve heard it about Proposition 13, the 1978 California voter initiative that limited property tax increases, championed by tax protesters Howard Jarvis and Paul Gann. Jarvis even “wrote” one of those campaign quickie books, titled with the famous quote from Network. Establishment pols loathed Prop 13. Anti-initiative types pointed to it as an object lesson in how awful voter-created laws were. The press predicted doom.
But just like Bob Dylan’s Mr. Jones, the establishment didn’t even know what it was. Prop 13, which cut state property taxes by 30 percent, then capped further tax increase rates in the future, inspired similar campaigns elsewhere. Twelve states, including Florida, Massachusetts (we have Prop 2) , Oregon, and Colorado fielded and passed property tax cut initiatives still in effect today. Proposition 13 reduced California property taxes on the spot by $6.1 billion, according to a June 6 AP story by Jim Wasserman, one of many marking the 25th anniversary of the measure. It launched a national tax-cutting movement that climaxed in Ronald Reagan’s election and the Tax Reform Act of 1984, which slashed the top income tax rate from 70 to 28 percent.
It created the quarter-century economic boom that still — despite a three-year downturn exacerbated by the 9/11 attacks — holds sway as the major force in American life.
How did Proposition 13 get started? With an outrage. People were being taxed out of their homes. In the 1970s, California real estate values blasted off on a rocket’s trajectory. Property tax rates, doing what government programs always do, rose even faster. People who had owned homes for a long time found themselves saddled with tax bills so high, they were forced to sell. But where could they go? All around them, home prices and rents shot up so fast, they could find no new place to live. It hit the elderly on fixed incomes especially hard. And remember, in those days of double-digit interest rates, you couldn’t simply take out a home equity loan and live on the cash. Those payments could crack your back, too.
Ah, the Carter era. Nobody on the national scene today remembers how wild it was. Pre-cable, pre-Internet, the controversy boiled over, with Jarvis, a marvelously irritating character, delivering raucous speeches everywhere, and the politicians having a caterwauling cow.
Former California Gov. Edmund G. (Pat) Brown: “If I were a communist, I would vote for Proposition 13.”
Los Angeles Mayor Thomas Bradley: Proposition 13 will “hit the city like a neutron bomb, leaving some city facilities standing virtually empty and human services devastated.”
Howard Allen, president of the Los Angeles Chamber of Commerce: Proposition 13 is “a fraud on the taxpayer that will cause fiscal chaos, massive unemployment and disruption of the economy.”
Wail as they might, the establishment pols couldn’t hold back the public at the polls. More than 60 percent of Californians who voted said yes to Prop 13, and the political landscape changed forever.
There were, of course, unintended consequences. Government spending, like steam in a boiler, springs out in new spots once the old outlets get capped. Federal spending, notably on education, grew exponentially in the next two and a half decades to fill the gap in state coffers. Federal control grew, too. In California, house prices inflated even faster, since reduced tax rates added to the pool of qualified buyers. The state grew in prosperity and attractiveness until, some time in the mid-nineties, the Democratic city and coast dwellers overwhelmed the Republican suburbs and the farms of the inland counties.
In a way, Prop 13 led directly to the financial idiocies of Gray Davis. Without it, he wouldn’t have had nearly as much money to squander.
So, if you remember, sit back and laugh as the recall circus comes to Left Coast. Sooner or later, voters will rise up and cut politicians off at the knees. The results might not be pretty. Only richly deserved.