By Joel Fox | The campaign to change Proposition 13 by the self-styled “Make it Fair” coalition is not about fairness, it is all about more tax money.
The coalition claims business gets tax breaks under the current property tax system. Their favorite example to point to was a deal over a Santa Monica hotel purchase that was engineered in such a way that a property tax increase was avoided when the property was sold. But when a fix to the problem supported by the business community was introduced in the legislature the plan was spiked by pressure from the influential public employee unions because they didn’t want a fix, they wanted a campaign issue to undo Prop 13.
The reason is because it is not about fairness, it’s about the money.
You can bet that fairness in the minds of Prop 13 change promoters doesn’t include either dealing with the pension issue or re-thinking cheaper, more effective ways to deliver services to the citizenry. (Remember Gov. Mario Cuomo’s admonition: It is not government’s role to deliver services but to see that they are delivered.)
If the conversation were truly about fairness there would be talk of reimagining government for the 21st century not financing a 19th century governmental structure with the expensive additions of items like unfettered pensions for government workers paid for by beleaguered taxpayers who don’t enjoy the same privileges.
The Make It Fair coalition is looking for the $9 billion in additional revenue a new USC study says a split roll would bring in — a study commissioned by a member of the coalition. While the report discussed the approximate $9 billion take from a split roll there was no discussion of how that huge tax increase would affect the collection of other taxes. There will be consequences to the job market as businesses compensate for the new taxes including cutting jobs that would affect both income and sales tax collections in the state.
Economic consequences and negative effects on the business climate are an important part of this Prop 13 makeover debate but the USC authors noted their sole purpose was to discover how much a split roll would produce. However, they went out of their way to suggest at the end of both the Introduction and Conclusion of their report that the state needed additional money for certain budget items echoing their sponsors’ political agenda and going beyond the stated academic purpose of the paper.
Not a surprise since it’s not about fairness, it’s about the money.
Is the discontent promoted by a small group of left leaning organizations and public employee unions widespread? How real is the threat presented to Proposition 13 by a coalition made up mostly of old faces who have wanted to dismantle Prop 13 for the longest time?
The question is will big money players like SEIU and teachers unions step up to engage in the multi million dollar battle over a split roll? SEIU is already providing seed money for the so-called grass roots efforts. The teachers unions are weighing their options with an eye on the possibility of extending the Proposition 30 tax increases that may face less opposition than attempting to change Prop 13.
Don’t kid your self — the “make it fair” argument will ultimately cast a wider net. Notice the advocates of the change are talking about corporations AND wealthy landowners. Wealthy landowners as individuals, perhaps? In case no one has noticed, the wealthy in California pay the highest income tax rates in the country. But clearly that is not enough for the tax increase advocates.
Will expensive residential properties be next in line for a property tax increase if a split roll succeeds? Where is the line drawn on who is a wealthy landowner in a state with high housing costs? The word to voters watching this emerging debate on fairness is: Beware.
Because it’s not about fairness, it’s about the money.
Joel Fox is editor of the Fox & Hounds political blog and president of the Small Business Action Committee. He is a past president of the Howard Jarvis Taxpayers Association.