Print this page

Prop. 218: Closing the Assessment Loophole in Prop. 13

Proposition 13 could be rendered meaningless if Proposition 218 fails at the polls.

Consider: Proposition 13 is a law designed chiefly to protect property taxpayers. It put limits on how high and how fast property taxes can climb and requires a vote of the people on new local taxes. After Prop 13’s success, bureaucrats looked for ways to raise revenues while avoiding Prop 13’s restrictions. They hit upon assessment districts, which were historically used to fund capital improvements that directly benefited property.

Over time, bureaucrats molded assessments into property taxes that avoid Proposition 13’s restrictions. The courts supported this artistry by ignoring the historical precedent demanding a link between assessments and a direct benefit to property. They held that assessments could be used for operational budgets and maintenance costs and were not covered by Proposition 13’s limits and vote requirements.

Assessments have become unrestricted property taxes. They appear on your property tax bill. There are no limits on how high assessments can go. There are no limits to how many assessments can be placed on your property. Indeed, one Northern California county redesigned its property tax bill to accommodate its growing list of assessments.

Because assessments can be imposed without a vote, they are attractive to local governments. Remember the debacle last spring when the Los Angeles Community College District tried to rush through landscaping improvements and construction of facilities such as an equestrian center with an assessment against property? Only after a massive outcry, including 30,000 protests, did district trustees agree to put the proposal on the Nov. 5 ballot. The current assessment system is stacked against taxpayers because an absolute majority of all properties within the assessment district is required to kill an assessment. In other words, those who do not protest are counted as “yes” votes. In the case of the community college district assessment, it would have taken 500,000 protests.

Proposition 218 would remedy this grossly unfair situation by giving the voters a more evenhanded say in the taxes levied upon them and their property.

Prop. 218 will continue Prop 13’s legacy of protecting property owners from being the cash cow forced to fund most local services. As an example, recall the last two votes taken in the city of Los Angeles to raise taxes for police. Because these special taxes were to be paid exclusively by property owners, a two-thirds vote was required under Proposition 13. Both failed to achieve the two-thirds mark.

Proposition 218 once again limits the use of assessments to services which specifically benefit property. Police services are a general benefit to the community and should be funded by taxes, not assessments.

However, if Proposition 218 fails at the polls, look for city officials to try to impose a police assessment on property. Already, the City Council has asked city bureaucrats to look into the possibility of using assessments to fund police operations. If, as the old saying goes, the courts follow the election returns, its possible assessments for police will be upheld. The end result is that those same Los Angeles property taxpayers who were protected by Proposition 13’s two-thirds vote requirement could assessments placed against their property with no vote at all.

Property taxes with no limits and no vote — just like before Proposition 13 passed.

Opponents of Prop. 218 are falling back on the failed strategy of exaggerated predictions that we witnessed in the Proposition 13 campaign. They claim 218 would give new powers to foreign and big landowners, and fewer rights for renters. To the contrary, Proposition 218 follows the current law, which allows property owners to protest assessments, and creates no new powers expect for renters, who may vote on assessments for which they are liable.

The impartial legislative analyst says that potential revenue loss from Proposition 218 is minuscule — a mere $100 million spread across the entire state or one-tenth or 1% of all government revenue in California. By contrast, the Los Angeles budget is about $12 billion; the city and L.A. school district budgets are in the $3-$4 billion range.

Under Proposition 218, government officials still will be able raise taxes — if they convinces voters of the need for the increase. Assessments will pass with a majority vote of the property owners; general taxes with a majority of all voters.

Proposition 218 tackles the age-old question: Who should control the most important function of government, taxation? Those who think the safest place for this power is with the people will vote yes on Proposition 218.