California voters could be asked this fall to touch what’s been an untouchable law: the property tax initiative known as Proposition 13. A potential November ballot proposal would raise taxes on the state’s highest-value properties and spend the money on anti-poverty programs.
After nearly 40 years, Proposition 13 is known as the third rail of California politics: you touch it, you die.
But don’t tell that to the Daughters of Charity. The order of Catholic nuns is one of several major donors to an effort to raise taxes on properties valued at more than $3 million.
“It’s a multi-faceted approach to try to get people out of poverty,“ says veteran Democratic strategist Bill Carrick, who's running the campaign. “That’s the point of it. We’re trying to keep in place — I think we do keep in place — the fundamental protections of Proposition 13,” which caps property taxes at 1 percent of the property's value and limits increases to 2 percent a year.
New revenues could reach $7 billion a year and would fund anti-poverty initiatives — including early childhood education, job training and welfare programs.
Carrick says few homeowners would be affected. But Allan Zaremberg with the California Chamber of Commerce says the measure would reach beyond the rich.
“In California, if you have a small restaurant, you’re probably renting from somebody who has a property of $3 million or more,“ Zaremberg says. “So you’re gonna pay more in rent. And you just can’t afford that.”
Democrats despise Proposition 13. But the party establishment doesn’t like this measure. It took a hard look at Proposition 13 — but decided to focus instead on extending the Proposition 30 income tax increases.
Democratic consultant Steve Maviglio says there’s no doubt California needs major tax reform, “but what a lot of people want to do is put everything on the ballot this year, instead of being more surgical about how to get there. We know what can win, which is a Proposition 30 extension. Anything you touch on Proposition 13, which has always been and always will be the third rail of California politics, becomes more problematic.”
That problem isn’t going away. Carrick says his campaign has collected roughly half the voter signatures it will need to reach the November ballot.