Read Their Lips: No New TaxesCommentary by Pete du Pont
December 14, 1995
While most of the attention in California was focused on affirmative action and stockholder lawsuits in the November 5th election, voters in the Golden State were sending their local governments another message:
Don't raise taxes without our permission.
Meanwhile, voters in California, Florida, Nevada, South Dakota, and Oregon were either making future tax increases more difficult, reducing current taxes, or both. These states join three others which already have super-majority requirements. One-fifth of the nation's total population now lives in states with tax limitations.
Florida amended its constitution (with a 67% plurality) to require that voters approve any tax increase or new tax by a two-thirds majority. Nevada voted to require a two-thirds vote in each house of the legislature for any measure creating or increasing public revenue. South Dakota passed a requirement that either two-thirds of each house or a majority of voters must approve any tax increase or new taxes. And Oregon voted to reduce property taxes and limit their future growth.
Perhaps it is also significant that California, the state where the tax limitation movement got its start almost two decades ago, voted in its new limitations almost unnoticed by the national news media, and with only a minimum of notice even in California.
That certainly wasn't the case in 1978, when a storm of controversy surrounded the approval of Proposition 13, limiting the power of local governments to raise taxes. And ever since its passage, it has been blamed for almost everything bad that has happened in California except mud slides and earthquakes. The most strenuous objections have come, as might be expected, from those who believe government must do more and more, and raise more and more money to do it.
But the only thing that California taxpayers didn't like was that Proposition 13 left some big loopholes. Proposition 218, passed this month, aims to close them.
Local officials in California have been getting around the 1978 limitation measure by creating fees and assessment districts, which have been ruled as not covered by the law. The new legislation covers both, and requires a simple majority vote for general tax increases and a two-thirds majority for special taxes such as the fees and assessments.
The Oregon measure, which applies only to property taxes, requires that, for the next fiscal year, they be reduced to either the amount paid in fiscal year 1995 or the amount paid last year minus 10 percent. What that adds up to is something like an average 20 percent cut in property taxes statewide, and an estimated reduction of $1 billion in property tax revenue over the next two years. And future property tax increases can't exceed 3 percent in a year.
In California, opponents of Proposition 218 echoed the San Jose Mercury News' plaint that it "would make it nearly impossible for cities and counties to raise money for services people want and need."
The opponents said the measure would cut police, fire, library, park, senior citizen, and disabled services and divert funds needed to reduce classroom sizes. They also claimed it could eliminate the Lifeline utility rates for old and disabled citizens - even though the measure specifically exempted utilities.
But limitation advocates had a better formulation: "Do you believe taxpayers should have the right to vote on taxes?"
The voters answered yes, indeed. Maybe the blatant disregard of Proposition 13 had something to do with it. For example, a special district in Northern California assessed taxpayers for a park 27 miles away because their property was alleged to benefit from the park. The Los Angeles Community College District used a lighting and landscape assessment district to construct new buildings, including an equestrian center. And homeowners in one Central California area were assessed to refurbish a college football field.
One lawyer wrote that assessments "are now limited only by the limits of the human imagination."
The California legislative analyst estimated that local governments would lose more than $100 million annually in the short term and potentially lose hundreds of millions of dollars annually in the long term, with comparable reductions in spending for local public services.
But California voters apparently thought they decided 16 years ago that they would get the final say over any tax increases and that governments would have to live within their means. Proposition 218 seems to say that they like the trend they started in 1978 - except that they want more.
It appears to be clear that voters in California and the other states that passed the restrictions agree with President Clinton that "the era of big government is over" - and they intend to see to it.