Last month California Democrats gathered in Long Beach for their annual convention. For those in attendance, there were many discussions around impeachment, electing a Democrat President, health care, keeping control of the House of Representatives and gaining control of the United States Senate – all top of mind issues for conversation. Closer to home, candidates jockeyed for endorsements for local Assembly, Senate, city council and mayoral races coming up next year. One topic that should be at the top of the list is the fate of California’s landmark law, Proposition 13. Undoing one of the most significant and necessary ballot measures could, if successful, wreak havoc with Californians’ financial future.
It’s important to remember how we got here to understand what is truly at stake. Between 1973 and 1977, property taxes on single-family homes skyrocketed, increasing in some cases by 50-100%. Families, seniors and small businesses were faced with the possibility of losing their properties because of their inability to pay skyrocketing property taxes. Many families were forced from their homes and small businesses were left with no choice but to raise prices on their customers.
In 1978, voters overwhelmingly passed Prop 13, limiting property tax increases and putting an end to the days of unpredictable property taxes.
For many small businesses and families of color, Prop 13 has been a vital tool. By capping general property tax increases at 2%, it has allowed homeowners to budget for their future. For small business owners, Prop 13 has provided certainty with their business costs. For consumers like you and me, it has kept costs down at the neighborhood restaurants, corner grocery stores, barbershops and beauty salons.
Touted by some of our political leaders as a salve that can heal education’s financial woes by raising property taxes by billions each year, targeting Prop 13 now could wind up being a colossal mistake for Democrats. It is important to remember that, despite critics’ claims, Prop 13 remains one of the most high-profile and revered citizen-sponsored initiatives that has shaped California for the better 41 years since its passage. In fact, four decades later, Prop 13 remains the only constitutional measure that helps control rising costs in California. Polling bears that out. In fact, a Public Policy Institute of California poll conducted earlier this year, 64% of likely voters say Prop 13 has been a “good thing” for the state.
Younger voters, many of whom aren’t old enough to remember what it was like before Prop 13’s passage, need to understand that Prop 13 protects consumers in general and helps all people succeed. Weakening, or doing away with Prop 13 altogether will only serve to make building more expensive and will hurt, not help, Californians.
Consider this statistic from the U.S. Small Business Administration: California is home to nearly 4 million small businesses, which employ 7 million people across the state. Small businesses make up 99.8% of all businesses in California and employ 48.8% of the state’s workforce, making them a vital part of the economy.
As lifelong Democrats, it’s not politically correct to voice support for Prop 13. Yet it is important to speak out, especially now as Democrats convene to discuss California’s most pressing needs, in support of the benefits and peace of mind Prop 13 provides to millions of Californians.
A thriving tech sector and millions of small businesses have helped California’s economy remain strong. We’re creating good-paying jobs, protecting the environment and filling the state’s budget coffers at the same time. This reality, plus some solid planning in Sacramento, is why California boasts a more than $22 billion budget surplus.
Now is not the time to change course. The stakes are too high and could prove costly for consumers, homeowners and renters, and in the process negatively impact California and our economy as a whole.
Gwen Moore is the former California State Assemblywoman who served from 1978 until 1994. She represented the 49th and 47th Assembly Districts. Ms. Moore serves on several State and National Boards.
Peter D. Kelly III is the former State Chairman of the California Democratic Party and has been active in national politics. He has served on numerous public and private boards.