Is Failure of the 2020 Prop. 13 Sign of a New Tax Revolt?

The following article is from Jon Coupal, the President of the Howard Jarvis Taxpayers Association (HJTA). He is a recognized expert in California fiscal affairs and has argued numerous tax cases before the courts.

The good Proposition 13 — the one from 1978, not the $15 billion school bond currently on electoral life support — was the beginning of the modern tax revolt movement. That movement spread across the United States and even into Europe in addition to spawning several additional initiatives here in California. But it’s the bad Prop. 13 on last week’s ballot that is currently generating a statewide buzz because it appears to be headed for failure. Could this be the beginning of Tax Revolt 2.0? The 2020 version of Prop. 13 was a massive $15 billion school facility bond measure, the largest such bond in state history. The Howard Jarvis Taxpayers Association led the opposition with a guerrilla-style campaign relying on a relatively modest $250,000 statewide radio buy, social media and nearly a hundred interviews with television, radio and print media. This was in comparison to the more than $20 million spent by Gov. Gavin Newsom and his allies.

Because there are millions of absentee and provisional ballots yet to be counted, it is possible that Prop. 13’s losing margin will shrink. But no matter the outcome, politicians have been put on notice that voters are growing increasingly weary of hundreds of bond and tax measures confronting them at the state and local level in every election cycle.

Here’s what taxpayers can take away from the March primary election:

The first is what we’ll call the “Proposition 13 blame game.”

Casting about for a reason to explain why Prop. 13 is failing, the author of the bond measure, Assemblyman Patrick O’Donnell, D-Long Beach, is blaming voter confusion. That is why we look forward to supporting O’Donnell’s proposal to take Prop. 13 out of the ballot number rotation.

At HJTA, we have seen Prop. 13 used as a scapegoat for more than four decades. But if the bond measure fails, the blame will belong to Gov. Newsom, both for failing to properly gauge the California electorate and for cobbling together a strange mix of special interests to ride along on the bond’s assumed passage.

The measure included language that waived local developer fees and increased local bond debt caps. Bond proponents reportedly begged him for a smaller bond that did not include funding for UC and CSU colleges, advice that was disregarded. Prop. 13 was constructed in a haphazard manner with late changes and add-ons, finally coming together just days before the legislative session ended. The governor became the face of the campaign. Voters were unimpressed.

Another trend to monitor is the widespread defeat of numerous local bond and parcel taxes.

According to data from the California Taxpayers Association, voters have rejected nearly half of the 236 local tax and bond measures on the March ballot and another 56 remain too close to call. This is a remarkable statistic considering the history of local revenue measures in California.

According to the website California City Finance, local revenue measures have had at least a 70 percent pass rate in all but two major statewide elections since 2012. Local governments of all kinds are accustomed to these measures passing, but perhaps no more. One reason may be lack of voter confidence that the tax dollars they approve actually end up going where elected officials say they are going. Again, while many votes remain to be counted, it is undeniable that voters have delivered a statement that they are experiencing tax and bond fatigue, and they don’t trust either municipal or state politicians to spend that money effectively. A second California tax revolt could be upon us.