February 18, 2009
SO GOES CALIFORNIA.... It's only the financial stability of the nation's most populous state. That's hardly a reason for state Republican lawmakers to act responsibly.
A delicate budget fix crafted by Gov. Arnold Schwarzenegger and legislative leaders was on the brink of collapse early Wednesday after Republicans in the Senate ousted their leader. The late-night coup could derail already strained budget talks by requiring them to renegotiate with a new Republican leader.
The current package containing billions in tax hikes, spending cuts and borrowing took leaders more than three months to put together as the state tries to pass a midyear budget fix and avoid fiscal calamity.
Lawmakers viewed the leadership change as a major setback after they fell short by just one GOP vote, but Democratic leader Darrell Steinberg said he didn't want to speculate what it would mean for the package.
''We're after one reasonable person who puts California first,'' Steinberg said as Republicans voted to remove Sen. Dave Cogdill.
Republicans replaced Cogdill with Sen. Dennis Hollingsworth, R-Murietta, whom they saw as more capable of resisting tax increases.
Got that? The leader of the Republican caucus in the state Senate backed a compromise measure that would have resolved the budget crisis. So, naturally, the Republican caucus in the state Senate voted to kick their leader out of his post, and rally behind someone less reasonable.
Keep in mind, policymakers have worked for months to pull this package together. California needs just one more Republican in the state Senate to endorse the budget, but there isn't one.
Paul Krugman noted, "Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster -- and with all reasonable responses blocked by a fanatical, irrational minority. This could be America next."
That's true, but as Scott Lemieux explained, it's not just unhinged Republicans acting irresponsibly, it's also a super-majority mandate for tax increases that gives irresponsible Republicans the power to shut down the process in the first place.
Kevin Drum concluded, "So it's back to square one with the flat earthers determined to wreck the state. A friend of mine emailed to say that my post the other day comparing California Republicans to lemmings and neanderthals was unfair to both lemmings and neanderthals, and I guess he had a point."
—Steve Benen 12:35 PM
Permalink
| Trackbacks
| Comments (61)
Schwarzenegger is a RINO. Why else would democrats be siding with him and Republicans not? California is fortunate to have legislators who are willing to put principle ahead of expediency.
Posted by: Al on February 18, 2009 at 12:37 PM | PERMALINK
Here in California the Republicans in our legislature have left us both mortified and speechless. They have destroyed government as an instrument of the people! They need to be asked, who will do the people's business now? -Kevo
Posted by: kevo on February 18, 2009 at 12:38 PM | PERMALINK
Comparing Republicans to anything else is an insult to whatever it is.
The California Republicans are mad at the rest of the state for turning ignorant white boys into a minority in their own land of the (tax) free.
Now we see what 40 years of studied ignorance can create. I used to think these idiots were impossible 30 years ago, but the 1970s Republicans were paragons of bipartisanship in comparison with what we have today.
Posted by: TCinLA on February 18, 2009 at 12:45 PM | PERMALINK
I don't know what people expect when one party is committed to the idea that government doesn't work and is the root of all our problems.
It boggles the mind that anyone would put such people in a position to self-fulfill their own prophecy.
Posted by: doubtful on February 18, 2009 at 12:45 PM | PERMALINK
If nothing else, this should herald in the final death-throes of the GOP as a viable political entity on the national stage. But as for California, the only way they'll ever return to fiscal sanity is to stop voting these promise-the-world rotpublicans into office.
Posted by: Steve W. on February 18, 2009 at 12:51 PM | PERMALINK
From its celebrity governor with no roots in, and no leverage over his own party, to the term-limited legislators who can blithely torch the place when they leave, to the buy-an-amendment initiative & referendum process, California's quite a triumph for immaculately-conceived politics-without-politicians.
Posted by: Davis X. Machina on February 18, 2009 at 12:52 PM | PERMALINK
It takes a 50% majority in California to amend the constitution to remove people's rights, but 66% of the legislature to pass a budget. This is unworkable! Maybe we could have a couple of Ballot initiatives to reverse those two numbers.
Posted by: joyncassie on February 18, 2009 at 12:55 PM | PERMALINK
I'm reminded of Grover Norquist's infamous quote about wanting to shrink government to the size that it could be drowned in the bathtub. California is Norquist's vision come to life. If there's any good that can come from this, it's that we now know what happens when we turn our collective welfare over to the irrational whims of ideologues.
Posted by: Django48 on February 18, 2009 at 12:55 PM | PERMALINK
Is There Anything That Can Be Done for Those Poor People?
Seriously. California painted itself into a corner 30 years ago by requiring a 2/3rds supermajority for tax increases and freezing property taxes. The consequences of this have been growing clearer and more ominous ever since. Now, the state is in a catastrophic situation.
Moreover, the people suffering TODAY and for the future are mostly not the ones who passed this legislation - so "punishing" Californians as a whole is an ethical non-starter.
What would it take to un-do Prop 13? Can the legislature act (do they need a supermajority there, too?) or must this be done by initiative?
Is there, at long last, any will within California to permit A SIMPLE MAJORITY to raise taxes? Or is this another trap of democracy, like voting in a dictator?
Posted by: Zandru on February 18, 2009 at 12:57 PM | PERMALINK
I've actually seen people online saying that California shouldn't be giving people free college tuition if we're in such a budget crunch. Uh, California hasn't had free college tuition for 40 YEARS NOW. Reagan ended that while he was governor.
People have a very strange idea of what's actually in our budget in California and how much we actually pay in taxes, but that's not keeping them from running around claiming that programs that ended 40 years ago are the reason we have a budget problem.
Posted by: Mnemosyne on February 18, 2009 at 12:59 PM | PERMALINK
It's common knowledge here in CA that the Republicans here want the state to fail. They've said as much on local talk radio and local public radio. They've turned nihilistic, and it's sickening.
Yes, the super majority rule is flawed, and mirrors the current rules in the congressional Senate -- which explains the Stimulus bill.
Posted by: JWK on February 18, 2009 at 1:02 PM | PERMALINK
In fairness to Californians, who could have guessed 30 years ago that people like today's Republicans could have made up 34+% of their legislature? It's understandable that they would want it to be difficult to raise taxes. That people would elect representatives who hate them? Not so much.
Posted by: Danp on February 18, 2009 at 1:04 PM | PERMALINK
As repubs struggle with the wreckage of their party, I would like to suggest a simple motto to them. They could even put it on an official Party Seal, if they so chose:
Party Over Country.
Dogma Over Reason.
Posted by: JoeW on February 18, 2009 at 1:04 PM | PERMALINK
blah blah blah blah blah... These republicans are only doing what they think their constituents want. Hard to blame them. So just cut more spending without increasing taxes. I know the state-worshipers here view that as unthinkable, but it's really not that hard.
Posted by: Brad on February 18, 2009 at 1:05 PM | PERMALINK
I'm with those who think it's time to change the 2/3 supermajority requirement to raise taxes. I'm all for that ballot initiative. I'm going to start it myself if someone else hadn't already.
Posted by: Stephen Stralka on February 18, 2009 at 1:07 PM | PERMALINK
I can't wait to live large in Arizona. It's going to be the land of milk and honey.
Posted by: Myke K on February 18, 2009 at 1:08 PM | PERMALINK
"Tax wars in a country that considers public payment to be an infringement on private liberty guarantee that all costs remain hidden, shunted off on revolving credit until the unpayable lump sum comes due."
Richard Powers
Operation Wandering Soul 1993
Posted by: pacato on February 18, 2009 at 1:11 PM | PERMALINK
Brad, there just isn't $41 billion worth of spending we can cut. In fact, we're seeing what the spending cuts would look like right now--the money isn't there, so the state isn't spending it, and the results aren't pretty. You're going to start having to cut things that even Republicans think government should be doing, like fighting crime and putting out fires.
Posted by: Stephen Stralka on February 18, 2009 at 1:11 PM | PERMALINK
"It's only the financial stability of the nation's most populous state."
Sort of understates the situation. I would have gone with "It's only the world's fifth largest economy" or something like that.
Posted by: bubba on February 18, 2009 at 1:12 PM | PERMALINK
So just cut more spending without increasing taxes. I know the state-worshipers here view that as unthinkable, but it's really not that hard.
It's much harder than you think. A huge chunk of that spending is mandated as a result of initiatives (another bad California idea) and CAN'T be cut.
Posted by: Steve LaBonne on February 18, 2009 at 1:13 PM | PERMALINK
Brad, try a little harder to smell the coffee brewing right now.
Posted by: in vino veritas on February 18, 2009 at 1:13 PM | PERMALINK
So just cut more spending without increasing taxes. -Brad
OMG! That's...brilliant! I am so happy I was here to witness that. Everyone, everyone, look! Brad here figured it all out. We've been making this so complicated, but all we have to do is cut spending! Then we don't have to increase taxes. I simply can't believe how easy that was. Well, I guess we can just dust off our hands and go read up on Brittney and Paris now, Brad solved government.
Thanks Brad, we owe you.
Posted by: doubtful on February 18, 2009 at 1:15 PM | PERMALINK
Brad,
Taxes pay for things like schools, prisons, and police--not to mention bridge repair. How many people really want to cut those things? California is already under court order to release prisoners from overcrowded prisons. Do you want to release even more?
Posted by: Kevin Mulcahy on February 18, 2009 at 1:22 PM | PERMALINK
Step #1: Given all the layoffs and cuts in services that will have to come in the absence of the budget agreement, if those Repugs are that allergic to responsible government, ALL the cuts should be targeted to those districts. Have the citizens drive (or walk) to the DMV office 100 miles away. Let them check out books from a library in another zip code. Have the CHP stop patrolling or enforcing the law within those boundaries. Stop every instructure improvement. Make the citizens in those districts who continually elect this idiots that if they insist on electing people to whom the concept "social contract" doesn't apply, then they deserve to live in the Hobbesian "nasty and brutal" world.
Posted by: artsmith on February 18, 2009 at 1:22 PM | PERMALINK
Yes, California DOES pay college tuition for in State residents, to Public schools. My family member did such just a few years ago. You think Regan did away with that 40 years ago? You should be better informed instead of just bashing your hated opposition so much, blinding you to the real problem in economics. Basic 101, spend less than you take in.
Posted by: birddog on February 18, 2009 at 1:24 PM | PERMALINK
Californians vote for government to do things through referendum and ballot initiative. Then, the repubs sit back and refuse to fund any of it, hoping to squeeze the state with enough debt to fit into Grover Norquist's bathtub.
Sure Brad, that's what their constituents want - Their government and it's services swirling down Grover's drain.
Posted by: JoeW on February 18, 2009 at 1:26 PM | PERMALINK
Oops, that's "infrastructure," not whatever I typed.
Oh, and I forgot about shutting off the spigot for any State Water Project water, especially during this drought period. And when the wildfires come, let them fight it with water from the goldfish pond.
And Al, I've seen your posts for some time now. Based on your comment above, I don't know if you're attempting supreme irony, or whether you are so dumb that you have to rely on someone else to type your messages.
Posted by: artsmith on February 18, 2009 at 1:26 PM | PERMALINK
Kevin Drum concluded, "So it's back to square one with the flat earthers determined to wreck the state. A friend of mine emailed to say that my post the other day comparing California Republicans to lemmings and neanderthals was unfair to both lemmings and neanderthals, and I guess he had a point."
At least lemmings don't force the other animals over the cliff with them when they go.
Oh, and what TCinLA said: "Comparing Republicans to anything else is an insult to whatever it is."
Posted by: low-tech cyclist on February 18, 2009 at 1:27 PM | PERMALINK
From UC-Berkley's website.
UC systemwide fees are $6,780, and campus fees range from about $250 to $1,250. The health care allowance/fee averages $670 and may be waived if a student has equivalent coverage. Given the recent increases in student fees due to the state budget crisis, you should expect the total costs for 2006-2007 to be higher.
No tuition -- just 'fees'.
Makes all the difference...
Posted by: Davis X. Machina on February 18, 2009 at 1:29 PM | PERMALINK
The Banana Republicans will not be happy until the California and the rest of the states enjoy a third-world standard of living. Low taxes and cheap labor, non-existent or incompetent government services. Did I mention government corruption? It's a feature, not a bug.
Posted by: AK Liberal on February 18, 2009 at 1:33 PM | PERMALINK
''We're after one reasonable person who puts California first,'' Steinberg said as Republicans voted to remove Sen. Dave Cogdill. -- NYTimes
Long time ago... in early/mid 18th c... Poland's Sejm (Parliament) had a rule that every decision had to be unanimous -- a bit like a jury verdict here. The rule was called "liberum veto" and, on the basis of it, a single representative could stop *years* of negotiations. And so it went, with some sessions of the Sejm never really ending, just being suspended for vacations.
When they woke up, in 1795, there was no Poland left; it had been partitioned between Russia, Prussia and Austro-Hungary, because the assholes (some of whom were bought off by the partitioning countries) couldn't even agree on things like raising/paying for an army. Sejm was dissolved, Polish was no longer taught in schools (till 1918), Poles weren't allowed in the government of any of its three parts...
But individual's freedom to object to objectionable legislation had been protected, which is, of course, all that matters, no?
Posted by: exlibra on February 18, 2009 at 1:34 PM | PERMALINK
We need to recall every single Republican in the Senate. Each and every one. Not all of them will actually be removed, but we only need one or two. Cost of special elections be damned.
BTW, I put this on the heads of the Democrats who controlled redistricting last time and left the ReThugs in safe districts just to protect their own.
They should have learned from Tom Delay and Texas, but they were too timid. A problem perhaps stemming from term limits, another really bad idea that leaves us with amateur legislators.
There is no hope, really.
The public will not vote to overturn the 2/3 supermajority to raise taxes, as Prop. 13 is SACRED out here.
Posted by: Cal Gal on February 18, 2009 at 1:35 PM | PERMALINK
Brad wrote: "I know the state-worshipers here view that as unthinkable ..."
I know that the so-called "libertarianism" of people like yourself has no actual content except a monomaniacal hatred of paying taxes and that you have nothing to contribute to the discussion but rote regurgitation of vapid bromides.
Posted by: SecularAnimist on February 18, 2009 at 1:39 PM | PERMALINK
Well, it's pretty clear that birddog didn't attend one of California's fine state univeristies. No one that galactically stupid could get admitted.
If California's giving away free educations to residents who attend state schools, it's a shock to everyone who attended UC Riverside with me about 15 years ago.
Posted by: Seitz on February 18, 2009 at 1:39 PM | PERMALINK
That's true, but as Scott Lemieux explained, it's not just unhinged Republicans acting irresponsibly, it's also a super-majority mandate for tax increases that give irresponsible Republicans the power to shut down the process in the first place.
Yeah, good thing that the federal legislature doesn't require a super-majority in either house to pass legislation, because then we might, as Krugman says, see the same problem nationally.
Oh, wait...
Posted by: cmdicely on February 18, 2009 at 1:41 PM | PERMALINK
"California is already under court order to release prisoners from overcrowded prisons. Do you want to release even more?"
I do. It would help.
Prop 13, however, is the most direct root of the problem. We might manage to get rid of the 2/3 majority thing soon. A large majority of reliable voters, however, are absolutely sure they benefit from the property tax limitation so that will last for the foreseeable future.
The long term problem is the state constitution. I think the chances of that being fixed are far better than the chances of the property tax being fixed.
Posted by: JeffF on February 18, 2009 at 1:44 PM | PERMALINK
Oh, another good possibility would be to divide the state up into a few pieces. Three would probably be good.
Say Northern California, Southern California and Eastern California.
Posted by: JeffF on February 18, 2009 at 1:48 PM | PERMALINK
I don't know what people expect when one party is committed to the idea that government doesn't work and is the root of all our problems.
Government doesn't work when republicans are running it.
This is heartless to say, but in a way I hope they take CA over the brink. I don't think the rest of us will ever see rational actors on the right until it become so obvious how ruthless and incompetent they are that voter start telling them NO!No more you're history - you're gone and don't come back until you care for your country. It's called patriotism.
Posted by: CDW on February 18, 2009 at 1:49 PM | PERMALINK
What would it take to un-do Prop 13? Can the legislature act (do they need a supermajority there, too?) or must this be done by initiative?
Changing any of the relevant provisions of Articles XIII, XIIIA, XIIIC, and XIIID of the State Constitution would require a public vote, though the legislature could submit such a measure to the voters without a citizen initiative.
Posted by: cmdicely on February 18, 2009 at 1:50 PM | PERMALINK
Looks like it's the conservatives who are in their "last throes".
Posted by: James G on February 18, 2009 at 1:52 PM | PERMALINK
And people wonder why I chose to retire out of California, my home state.
This has been brewing for years now, with the chickens now coming home to roost. A lot of Dems (and I'm one, too) kneejerk blame Prop 13, but if one looks at the inflated cost of housing in California, one wonders just how there could be a viable housing market without the Prop 13 protections. Do the math: a 3/2 POS house in a desirable (coastal) area in California can easily cost more than $600K. After purchase, that house will yield $6K to the state, plus whatever add-ons have been placed on it over the years by local governments for schools, etc. Figure $7K-plus. A similar house in other Sunbelt states might cost less than half, with the property taxes also being much less. And that's just housing. Factor in the higher cost of goods and services in California, and it seems pretty clear that removal of Prop 13 protections would devastate state citizens, the majority of whom are already house-poor.
So I'd say leave Prop 13 alone if you care about home ownership in California. But then there are all of the other amendments to the state consitution, all of which have caused an enormous money drain; they've also made it impossible for elected representatives to do their job. It's clear that the Hiram Johnson-era populist reforms have grievously wounded California, leading to a situation where anybody with a feel-good idea seems able to muster the support of more than 50% of what's almost always a very low voter turnout.
Yeah, the Republicans are a bunch of scum, but California's problems are far deeper. Most of the residents seemingly don't understand that providing the services they demand of such a large state don't come cheaply. It's also remarkable that education consumes such a large part of the state budget, thanks to feel-good measures, but still turns out poorly educated kids.
Too many sacred cows in California, starting with public education and health care. Also too many people who think nothing of giving away other peoples' money to favorite causes.
As I see it, the only way out for Californians is to demand a constitutional convention. What you've got now is totally unworkable and you need to fix it. All this chronic money soap opera is doing is driving productive citizens and those who can afford to pay taxes but want something in return out of the state.
Posted by: Nixon Did It on February 18, 2009 at 2:01 PM | PERMALINK
Someone above mentioned that taxes pay for things like schools, roads, prisons, etc. This is true. I'd like to focus on prisons for a second. Ever wonder WHY we need so many prisons? WHY they are so overcrowded? Truth is, the more laws we write that make things illegal, the more criminals we create. I'm not saying we should eliminate all laws that define certain activities as crimes, but seriously, we have thousands of people serving muli-year sentences for things like posessing small amounts of pot. Prohibition doesn't work and it is COSTING us BILLIONS of dollars. Marijuana is no more harmful than Alcohol or cigarettes. If we legalized it, we could regulate it, TAX the shit out of it (like alcohol and cigarettes)...and relieve our prisons all at once.
Posted by: independent thinker on February 18, 2009 at 2:09 PM | PERMALINK
I do. It would help. -JeffF
Yeah, nothing keeps the recidivism rate down like skyrocketing unemployment.
But go ahead, spend 10 times as much releasing these convicts, policing and catching many of them again, retrying them, and then putting them back in prison for even longer.
Posted by: doubtful on February 18, 2009 at 2:16 PM | PERMALINK
One Republican suggested cutting those commissions where people get paid $100k per year for attending meetings once a month.
That wouldn't save enough to make any real difference, but it is one Republican position I could get behind.
The only one, so far, but those sinecures are where term-limited legislators bide their time before they can find another office to run for.
(I have to confess, too, that I probably could not afford to stay in my home of 23 years if my property taxes had increased along with my home's value.)
Posted by: Cal Gal on February 18, 2009 at 2:29 PM | PERMALINK
It's not just the 2/3 rule that's the problem.
Bipartisan gerrymandering and a ridiculous term limits law means that people who don't know how to compromise keep getting elected, never learn, and have no reason to act beholden to the people, since they're only beholden to their party apparatus, and when termed out, not even that.
Posted by: Ben on February 18, 2009 at 2:39 PM | PERMALINK
Nixon did it, one of the reasons that property values are so high is that Proposition 13 drives up. By giving a significant tax advantage to anyone that has owned their home more than a few years, it encourages them not to sell, thus reducing the size of the real estate market and contribute to overinflated prices.
Posted by: tanstaafl on February 18, 2009 at 3:19 PM | PERMALINK
Stephen Stralka: '...I'm with those who think it's time to change the 2/3 supermajority requirement to raise taxes. I'm all for that ballot initiative. I'm going to start it myself if someone else hadn't already...'
Thanks, Stephen
Hopefully, this will push the Governor and the Democrats to amend the 2/3rds rule for taxes AND the Budget
We've been held up byu the lunatic fringe for too long
California, in the 70's and 80's embraced the concept of the 'free lunch'
After years of Prop 13 and Reagan's 'VooDoo' economics, we're starting to hit the crunch
Sorry, the California and American voter is to blame !
WHO voted for Reagan and Prop 13 ??
Posted by: MSierra, SF on February 18, 2009 at 3:23 PM | PERMALINK
These knucklehead Republican representatives are elected by blinkered, know-nothing White, Christian voters in either southern California exurbs or the rural Central Valley who imagine they're a bunch of rugged individualists living off the fat o' the land and that state government spends most of its money on wigs for transexuals in San Francisco or something. Thus if you just slash spending to the bone, who gets hurt except a bunch of dirty fucking homosexual hippies, right? I say let them have their way: nobody in Republican districts has to pay any state income or property taxes, but you get no highway patrol, public schools, public hospitals, firefighters, health and safety inspections in buildings, environmental protection and road maintenance. And you have to put up inmates from your district currently in state prisons. Y'all can go to hell in a fucking handbasket; the rest of us here are trying to have a civilization.
Posted by: jonas on February 18, 2009 at 3:35 PM | PERMALINK
WHO voted for Reagan and Prop 13 ??
Well, my father, for one. But his ashes have been floating around the Pacific since 1992. If you want to go down to the beach and bitch at him, I suggest buying a six-pack and making a day of it.
FWIW, he and I (a high school sophomore at the time) had many vigorous arguments on-topic. Saddens me to see I was right.
Posted by: Michael Miller on February 18, 2009 at 3:36 PM | PERMALINK
So just cut more spending without increasing taxes. I know the state-worshipers here view that as unthinkable, but it's really not that hard.
What part of "constitutionally mandated" is confusing you?
Of course, you supported the guys who decided that the Fourth Amendment was just a suggestion, so I guess you do think that the legislature can just ignore big chunks of the California constitution and do whatever they want.
Posted by: Mnemosyne on February 18, 2009 at 3:45 PM | PERMALINK
WHO voted for Reagan and Prop 13 ??
To be fair, Prop 13 came along after Reagan's stint as governor -- Jerry Brown was in charge at the time, and long may he be cursed for letting this idiocy go through. Reagan picked up the anti-tax sentiment and ran with it after the fact, but he wasn't responsible for Prop 13 passing.
Posted by: Mnemosyne on February 18, 2009 at 3:48 PM | PERMALINK
Heh. Not the best time to be released from prison. However I don't think that having the highest incarceration rate in the world is a winning strategy. The drug war is a failure. Eventually we will have to admit it.
"one wonders just how there could be a viable housing market without the Prop 13 "
California isn't known for its affordable housing.
It is really amazing how provincial people are. Go to Washington state and talk to people about a state income tax and they will assert that if one is enacted total taxes will double overnight exactly like they didn't do in all the other states that have instituted one and the economy will be ruined. Go to Oregon and they will say the same about the sales tax. Go to California and they will say it about the property tax.
Housing costs in areas where land is expensive are set mainly by what people can afford to pay. So whatever people can afford to pay is what housing will cost. It is a supply constrained bidding war. If people can afford to pay $4000 a month houses will cost $4000 a month. It doesn't matter if it is $3499 for the mortgage, $500 for maintenance, and $1 for property taxes, or $3000 for the mortgage, $500 for maintenance, and $500 for the taxes.
Prop 13 actually ought to be making the housing market significantly more difficult for people now that the adaptation period is surely is over. It front loads costs, increasing the risk people have to bear. You have to get a bigger mortgage to buy the same house, and unlike property taxes if there is a bust your mortgage won't go down.
Prop 13 is also surely increasing price volatility. In California people have an additional reason to fear being "priced out of the market" in housing because buying early locks in lower property taxes.
Prop 13 is also massively inequitable in several ways. It greatly favors people who buy and sell less often. The "people" who sell least often are corporations. Most commercial and larger residential rental property is owned by shell corporations (even outside CA) and the way the law works that property will never be sold only the shell company will be sold so the property taxes will never reset. Middle class people are likely to move around for jobs, to increase and decrease the size of their homes as they raise families, etc. A rich San Francisco family, can easily hold onto a home there for generations, even if just to rent it out. It was also a massive windfall for people who bought before it existed. They paid prices which assumed property taxes would exist, captured the price appreciation due to the invalidation of that assumption, and don't have to pay the property taxes.
Prop 13 also discourages changes in the building mix. If you own a house in SF which has two rental units you might consider replacing it with a four unit building, but that would reset your property tax tipping the economic calculation toward fewer housing units.
Prop 13 is increasing commute distances and limiting labor mobility. Moving closer to work in California can cost a person thousands of dollars a year in property taxes.
It is extremely bad policy.
One of the most pernicious things about it is how it is so popular with likely voters, and sure to remain so. It is so easy for people to see the benefits to them personally, but so difficult for them to see the costs to them personally. Even worse removing it would reverse the one time windfall that the pre-13 owners benefited from. Home prices would drop as people were unable to pay so much for land when they have to pay property taxes.
Posted by: JeffF on February 18, 2009 at 4:01 PM | PERMALINK
Are they Republicans? Then they're the Taliban.
Posted by: Cazart on February 18, 2009 at 4:10 PM | PERMALINK
JeffF: Yeah, I'm in WA and a state income tax is a political non-starter, even though it's fairly clear that we need one.
Posted by: Mike on February 18, 2009 at 4:23 PM | PERMALINK
Heh. Not the best time to be released from prison. However I don't think that having the highest incarceration rate in the world is a winning strategy. The drug war is a failure. Eventually we will have to admit it. -JeffF
Actually, I don't disagree with that sentiment. I just don't think a massive release program without any rehabilitative eduction or career training and especially without reforming the law that put most of them in prison in the first place will just result in a greater expense incurred by rounding them all up and incarcerating them again.
Posted by: doubtful on February 18, 2009 at 4:29 PM | PERMALINK
I can hear Howard Jarvis laughing in his grave.
Posted by: Django48 on February 18, 2009 at 4:56 PM | PERMALINK
…but as Scott Lemieux explained, it's not just unhinged Republicans acting irresponsibly, it's also a super-majority mandate for tax increases that gives irresponsible Republicans the power to shut down the process in the first place.
Uhhhh, excuse me, but don’t look now, but it just took a super majority to pass Obama’s stimulus bill, and that bill was 1/3 tax CUTS!!! You think the Senate in its current form has any chance in hell of ever passing ANY tax increases? And not for nothing, Congressional pay-go rules (not sure which chamber) are NOW that it requires a super-majority to pass any spending increases that are not off-set with an equal amount of spending cuts.
California, the US Congress is one with your insanity led by the psychotic republicans.
Posted by: pluege on February 18, 2009 at 6:47 PM | PERMALINK
New advertising slogan: "Geico.com -- so easy, a California Republican legislator can do it."
Posted by: Vincent on February 18, 2009 at 7:04 PM | PERMALINK
Al posted: "Schwarzenegger is a RINO. Why else would democrats be siding with him and Republicans not? California is fortunate to have legislators who are willing to put principle ahead of expediency."
Based on the history of the Republican Party, just about all of today's Republicans are RINOs. There is nothing about the Party, as it stands today, that bears even a passing resemblance to the Party of Eisenhower - who remains, in my opinion, the last true Republican to hold the presidency. This more recent batch is better qualified for a loony-bin than our seat of government.
Posted by: purplehawk on February 18, 2009 at 8:04 PM | PERMALINK
Maybe somebody could challenge the Constitutionality of the California Initiatives which are screwing things up. The U.S. Constitution guarantees a republican form of government (not the political party, a republic) for each state. Incidentally this prevents any given state from instituting Communism or anything else.
If the Initiative process isn't seen as Constitutional, then you could nullify those Initiatives.
However, be careful what you wish for. As the above conversation explains, it might not be Proposition 13 which is the problem so much as the 2/3 rule for taxing and budgeting.
Throwing out the baby with the bath water isn't so good.
Posted by: MarkH on February 18, 2009 at 10:53 PM | PERMALINK
Maybe somebody could challenge the Constitutionality of the California Initiatives which are screwing things up. The U.S. Constitution guarantees a republican form of government (not the political party, a republic) for each state.
California's form of government is a Constitutionally constrained democratic republic, so there is nothing unconstitutional about it.
Incidentally this prevents any given state from instituting Communism or anything else.
No, it doesn't, because a Communism and republicanism aren't exclusive. (Neither, sadly, is de facto plutocracy.)
It does prevent, say, monarchy, which is exclusive with republicanism.
As the above conversation explains, it might not be Proposition 13 which is the problem so much as the 2/3 rule for taxing and budgeting.
The 2/3 rule is part of Prop 13. But other parts are also clearly part of the problem, particularly, the limit on ad valorem taxes is a major motivator for unsustainable residential sprawl, since local governments are often dependent on development fees from new development to pay for basic services.
The limitation on assessment increases annually except when ownership changes also makes local governments heavily dependent on property turnover for revenue, and because commercial and residential rental property is often held for very long terms and leased to different occupants, it makes local governments very dependent on home ownership with a rapid turnover.
Increasing slightly the overall cap on ad valorem taxes on property and restricting the limitation on assessment increases to residential properties used as the owner's primary residence would retain the primary beneficial effect of prop 13 (preventing homeowners, particularly those on a fixed income like retirees, from being priced out of their home by taxes during a boom) while going a great way to undo some of the damage Prop 13 does, outside of the 2/3 rule, which also needs to go.
Posted by: cmdicely on February 19, 2009 at 10:55 AM | PERMALINK