Taxing Californians’ patience
The new Prop. 13, very much unlike the iconic original, hurts taxpayers.
There is yet another potential tax grab coming to California in the form of a school bond, which will be on the March 3rd ballot. The ironically named Prop. 13, a “School and College Facilities Bond,” would authorize $15 billion in general obligation bonds for school and college facilities. The original Prop.13 has been a blessing for property owners, in that it limits property taxes on all forms of property – private and commercial – to 1 percent of assessed value, and limits increases in that value to no more than 2 percent per year, except when properties change ownership.
However, the current Prop. 13 is no friend to taxpayers. As Howard Jarvis Taxpayer Association president Jon Coupal notes, the $15 billion figure “reflects typical credit card math” because the money would be borrowed from Wall Street, and taxpayers would pay it back plus 80 percent in total interest costs. So the stated $15 billion is actually $27 billion.
Before all the usual suspects start getting gooey-eyed and seriously informing us that the money is for “the children,” please consider the fact that California has become a rogue state that regularly cons, pressures, and forces taxpayers to fork over hard-earned dollars the way a desperate junkie would when he needs a fix.
To wit, why is California the only state in the country that stubbornly refuses to reveal public spending records to a government watchdog, which has now prompted threats of legal action? The Los Angeles Times ponders, “California’s education funding is at a record high. So why are schools short on cash?” The Mercury News advises us, “California can’t account for billions of education dollars,” and adds it is inexcusable that, six years after a K-12 spending revamp, an audit finds “needy kids aren’t getting help they should.” The Sacramento Bee wonders why the economy is booming and so many California schools are broke. Mike Antonucci asks: “Is all the extra state student funding that districts get benefiting the kids? State auditor says we don’t know.”
So just where is all the money going? Some, of course, simply falls down the wasteful government bureaucratic rabbit hole, but a large chunk of tax dollars goes for public employee pension and healthcare perks. In a paper published by the Brookings Institution in May, University of Missouri economics professor Cory Koedel writes, “California’s pension debt is harming teachers and students now—and it’s going to get worse.” He explains that the California State Teachers Retirement System’s total unfunded liability is over $100 billion, “which is greater than the total amount of money spent to educate all of California’s public K-12 students for a year ($97.2 billion).”
Robert Fellner, executive director of Transparent California, reports that “Nearly 80,000 California retirees are receiving $100,000 or more in pension pay.” Fellner also told the California Globe’s Katy Grimes, “Spending 52 percent more than the market average for public employees’ medical insurance is costing California taxpayers at least $3.3 billion annually.”
Additionally, San Diego tax warrior Richard Rider reminds us that California has by far the nation’s highest state income tax rate. And the highest state sales tax rate. And the highest gas tax. But, wait, there is some good news! When it comes to capital gains tax, we are just #2… in the industrialized world.
Many Californians have had it. Business are leaving. In 2018, 1,800 companies left the state, with most bound for Texas. California is regularly #50 on “Best States to do Business” lists. Such longtime big taxpaying firms like Toyota, Charles Schwab and Carl’s Jr. have bid the state adieu recently.
The good news is that Golden State taxpayers may have finally reached a tipping point. Dan Walters points to Los Angeles’ Measure EE, an utter bomb of a parcel tax, that needed a two-thirds majority to pass. Not only didn’t it get that, it couldn’t even garner a simple majority. Walters also points to tony Marin County, where residents have formed an advocacy group. The mission of the Coalition of Sensible Taxpayers (CO$T) is to “pressure school districts to rethink their spending and funding.”
Over the next couple of months, you are going to hear all kinds of sob stories about needing more money for “the children.” It’s way past time to ignore them and instead, vote your already depleted wallet. Just say No to Prop. 13 on March 3rd.
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Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.