Photo: Andrew Reed/EdSource

The confusingly numbered “Proposition 13” on the March 3 statewide ballot will waste taxpayer dollars, needlessly increase the state’s debt burden and encourage school districts to issue more debt, raising property tax bills. Voters should reject it.

Jon Coupal

Passed in a rush by the Legislature as Assembly Bill 48, this Prop. 13 is a grab-bag of goodies for the well-connected.

For Wall Street bond underwriters and investors, it’s $15 billion in general obligation bonds that will cost taxpayers about $26 billion when decades of interest costs are added.

The Legislative Analyst’s Office estimates that Prop. 13 will cost taxpayers $740 million per year for 35 years.

For construction trade unions and the contractors that employ them, the measure requires the state to give funding priority to projects in districts that sign a project labor agreement.

These are agreements that limit competitive bidding and require districts to pay the highest labor costs in the region, raising the cost of every school construction project. This is an inefficient use of the taxpayers’ hard-earned money.

Unlike the more famous Proposition 13 passed in 1978, this Prop. 13 would nearly double the debt caps that currently limit how much bond debt local school districts may incur.

Under this Prop. 13, the caps on local bond debt would go from 1.25 percent of assessed property value to 2 percent for elementary and high school districts, and from 2.5 percent to 4 percent for unified school districts and community college districts.

That means districts can issue bonds that were previously authorized but unissued because the debt would have put them over the cap. They also can put new bond measures on the ballot. School bonds need only 55 percent approval to pass unlike other local bonds, which require a two-thirds vote of the electorate.

The cost of local school bonds is borne by property owners; it shows up at the bottom of tax bills as “voted indebtedness” for schools.

However, not everyone will have to pay. The well-connected developers of multifamily housing projects near transit were granted an exemption from the higher taxes that will be added to property tax bills of other residents. Other developers of multifamily housing would get a 5-year, 20 percent reduction in their development fees. This is profoundly unfair.

New housing construction drives the need for new school buildings. Why should the developers of new housing get a special tax break while existing property owners, who have been paying for school bonds all along, are asked to pay more?

Prop. 13 puts taxpayers on the hook for more debt at a time when more debt shouldn’t be necessary. The state has record revenue and a record-shattering $222 billion proposed budget.

We’ve seen in the past that good times don’t last forever and, in an economic downturn, bond debt and interest payments take priority ahead of spending for basic government services.

Investors must be repaid before money is spent on Medi-Cal, public safety, roads and every other priority in the budget. Too much debt puts the state at risk of having to raise taxes in the middle of a recession, just to pay for the fundamental services of government.

If there’s a familiar ring to the arguments in support of Prop. 13, then it may be because we heard these same stories in 2016 when voters approved a $9 billion school facilities bond to fix the same problems of poor school conditions.

This time, proponents say, the state will use a special scoring system to make sure that problems such as asbestos in classrooms will receive priority. Removing asbestos from classrooms already should have been a priority, and there’s no reason that such repairs can’t be funded from existing state revenues.

A $15 billion bond measure that also raises local debt caps and provides favors for unions and developers is unnecessary and unwise. At a time when the state is facing a housing affordability crisis, this measure would raise property taxes, a cost that in many cases will be passed through to tenants as higher rents as well as burdening homeowners with higher tax bills. Voters should just say no.

•••

Jon Coupal is president of the Howard Jarvis Taxpayers Association.  The association is named after Howard Jarvis, a major force behind the passage of the original Prop. 13 in 1978, which imposed strict limits on property taxes in California.

The opinions in this commentary are those of the author.  It is one of a series of commentaries EdSource is publishing expressing a range of views on the school bond measure on the March 3 ballot. As a nonpartisan, nonprofit organization EdSource takes no position on the ballot measure. Read other perspectives here.

Share Article

Comments (29)

Leave a Comment

Your email address will not be published. Required fields are marked * *

Comments Policy

We welcome your comments. All comments are moderated for civility, relevance and other considerations. Click here for EdSource's Comments Policy.

  1. Jonah Kyle 1 month ago1 month ago

    Make no mistake: the structuring of this gigantic money pit bill around the name of the most famous tax cutting initiative in state-level political history was intentional. Under any other number, this bill would probably not see the light of day, but by waiting until the 13-slot opened up to put this on, the authors/communists/democrats/Deep State operatives have all but guaranteed its passage.

    Replies

    • John Fensterwald 1 month ago1 month ago

      Jonah, conspiracy theories aside, this is the way the numbering system works: Every 10 years, the cycle of numbering propositions begins again. There were 12 measures on the state ballot in 2018 when the new cycle started, meaning the next proposition in 2020 would be 13. The sponsors wanted to be on the March 3 ballot, because there would be no other tax measure competing with the bond, so they got the number 13. I … Read More

      Jonah, conspiracy theories aside, this is the way the numbering system works: Every 10 years, the cycle of numbering propositions begins again. There were 12 measures on the state ballot in 2018 when the new cycle started, meaning the next proposition in 2020 would be 13. The sponsors wanted to be on the March 3 ballot, because there would be no other tax measure competing with the bond, so they got the number 13. I have spoken with the advocates: Trust me, they think drawing 13 will hurt the bond’s chances not guarantee its passage.

  2. jeffrey boggs 1 month ago1 month ago

    Wouldn’t it be great if for once just once California did something that didn’t require more funding. The road repair cost us 12 per gallon gas hike and double our car registration!

    Replies

    • Suzanne 1 month ago1 month ago

      And the roads are still horrible!!

  3. Sharon 1 month ago1 month ago

    Vote NO! Vote NO! Vote NO! on 13. Gavin Newsom says vote yes on 13 that means vote NO! We already pay enough taxes! California is going downhill.

  4. Frank 1 month ago1 month ago

    I am a teacher and I am voting NO on Prop 13! No more taxes! We have a surplus of money … no more burden upon home owners/property owners … no new taxes!

  5. Clarice 2 months ago2 months ago

    Joel- What is the percentage of actual California homeowners in relation to total population of California? Commercial property owners, including owners of Multi-Family assets have passed property tax increases to their tenants. So the buck stops at home owners and renters alike. My annual rental increases had been $100/month average yearly for almost a decade. Why would I vote in another reason for my landlord to raise my rent even more?

  6. Galen 2 months ago2 months ago

    Congratulations. You are using the World Wide Web and once near the end of the article you finally identify this is in California and only then to give credit to the author.

  7. Laura Holowach 2 months ago2 months ago

    What has happened to all the money from the lottery that was supposed to go to schools? It has to be millions!

  8. Mitchell 2 months ago2 months ago

    Everyone, listen to Dominique. In support, politicians “leverage” your property in order to “get” money. Don’t listen to any politician that supports Prop 13 (2020) even your Governor Gavin Newsom.

  9. Jose Fernandez 2 months ago2 months ago

    I have 12 years living as a homeowner, and it is the third time that taxes have been raised. The problem is that everyone votes to raise taxes and only we pay those taxes. That is not fair

  10. Joelpalmer 2 months ago2 months ago

    $15 billion is less than $400 per person. Jarvis acolytes never met a tax they didn’t hate. Don’t listen to this guy. Make our schools better for less than $400? Thats a no brainer.

    Replies

    • John Ryan 2 months ago2 months ago

      We already did 9 billion in bonds just 3 and a half years ago with Prop 51. We still have over 31 years left to repay that bond. It was for the exact same purpose as this bond without the hanky changing of loan limits. If we have $750 million per year to pay on this bond for 35 years let's just not take the bond and provide the funds to schools … Read More

      We already did 9 billion in bonds just 3 and a half years ago with Prop 51. We still have over 31 years left to repay that bond. It was for the exact same purpose as this bond without the hanky changing of loan limits.

      If we have $750 million per year to pay on this bond for 35 years let’s just not take the bond and provide the funds to schools directly for the next 35 years – and instead of $15 billion they get over $26 billion, and we don’t flush more money down the interest toilet?

    • B Seegs 1 month ago1 month ago

      Make that $27 billion after we pay the Wall Street bond underwriters and investors their 4%. Pile it on the $9 billion bond from 2016 that didn’t address any of these issues and then ask yourself why safe drinking water is not enough of a priority to be on the record setting 220 billion dollar budget. We need to take out a bond for clean drinking water when the state is in a surplus?

  11. Alice m 2 months ago2 months ago

    Where in the heck is all the money from the casinos? That alone was supposed to have been to help the schools. I’ve never seen any accountability about where this money is being used. Can someone clue me in?

    Replies

    • John Fensterwald 2 months ago2 months ago

      Alice, revenue from casinos stays with the Native American tribes that run them, except for a tiny sliver to the state, as limited by federal court decisions. The state lottery supplies education with $1.7 billion per year. K-12’s share represents about 1.5 percent of its total state revenue.

    • Andrew 1 month ago1 month ago

      Indian Casinos pay no taxes. Steven Seagal scammed everyone who were confused by the term “Indian gaming” when Prop 5 was on the ballot. Wake up CA!

      • Bambi 1 month ago1 month ago

        The Indian Tribes actually pay the State of California in multiple ways. The State keeps the interest from the accounts they require Casino funds to be deposited in . The Casino are also responsible for road improvements on the streets & highways in route to the Casinos. I'm sure there are other conditions placed on the American Indian Tribes as well. My info may be a little outdated now, but my sister was the political … Read More

        The Indian Tribes actually pay the State of California in multiple ways. The State keeps the interest from the accounts they require Casino funds to be deposited in . The Casino are also responsible for road improvements on the streets & highways in route to the Casinos. I’m sure there are other conditions placed on the American Indian Tribes as well.

        My info may be a little outdated now, but my sister was the political consultant for the Morongo Tribe for years, she has since retired. My point is simply, with all the different sources of money that Sacramento receives, the biggest problem lays in the nasty habit of the politicians redirecting funds to their pet projects at will, then taxing us all over again for the same cause. They think nothing of stealing our tax dollars.

  12. Dominique Jones 2 months ago2 months ago

    I’m voting No! No new taxes!! Period. California is the highest tax state I’ve ever live in and I haven’t seen the benefits of paying so much. I don’t care about the schools! That gas tax didn’t fix anything and this won’t either! Please vote no!!

  13. Brian Ortiz 2 months ago2 months ago

    Of course the money will go to fix the schools just like all of the gas tax increases have gone to fix the roads – lol!

  14. Ken WIlliamson 2 months ago2 months ago

    While spending money to improve the schools seems like a noble effort, anyone who has lived in California for a awhile knows that this money will be used to pay for teachers union pensions. It will never make it’s way to actually improving the schools. And seriously, they are just now deciding to get rid of asbestos? Well done. The rest of the country (even the South!) from their schools several decades ago!

  15. Joan Nelson 2 months ago2 months ago

    Why can’t they be completely honest about these Propositions? They are always trying to manipulate the actual facts to benefit themselves. Our sign supporting this Proposition A will be removed from our property tomorrow. Try being honest!

    Replies

    • Tom 1 month ago1 month ago

      Joan, this proposition is undoubtedly the most horrendous affront to law abiding, hard working taxpayers, who have always dug deep to pay for school renovation and to remove asbestos from thousands of school sites. The fact is that we are still paying, through our property taxes, toward all of these previously passed propositions to improve the schools. The facts, which are hidden from taxpayers, would reveal that not all of these funds, previously collected, … Read More

      Joan, this proposition is undoubtedly the most horrendous affront to law abiding, hard working taxpayers, who have always dug deep to pay for school renovation and to remove asbestos from thousands of school sites. The fact is that we are still paying, through our property taxes, toward all of these previously passed propositions to improve the schools.

      The facts, which are hidden from taxpayers, would reveal that not all of these funds, previously collected, have gone to the school renovation projects. It should be illegal for the state to use any amount of these funds, targeted for school renovation and asbestos removal, but the state borrows from these funds every year. This proposition, as has been the case with most school propositions, is that they rarely finish the job of removing all the asbestos in our school buildings. I have visited over 40 schools in my district where asbestos has not all been removed! Vote NO on 13!

      It is simply far too expensive for homeowners, who bear the brunt of paying the highest amount of these taxes!

  16. Tony 2 months ago2 months ago

    NO on 13. The people that are running this state don’t have a clue how to run this state I don’t think they could run a hotdog cart and make a profit.

    Replies

    • jeffrey boggs 2 months ago2 months ago

      I’m with you, Tony. California wants every penny you got!

  17. Eaton Stark 2 months ago2 months ago

    Vote YES on prop 13! Schools are the backbone of a population that is increasingly falling behind foreign counterparts (China, South Korea, Nordics, UK). Do you want our children to grow up dumb and ignorant? Do people want to move in and buy your property if the schools aren't desirable? (Hint: no). You lose out on your property value in the long run if schools go to hell. This opinion only focuses on one thing, … Read More

    Vote YES on prop 13! Schools are the backbone of a population that is increasingly falling behind foreign counterparts (China, South Korea, Nordics, UK). Do you want our children to grow up dumb and ignorant? Do people want to move in and buy your property if the schools aren’t desirable? (Hint: no). You lose out on your property value in the long run if schools go to hell. This opinion only focuses on one thing, Taxes. tax tax tax. You know you sign up for the sunshine tax when you live here! Think through all the pros and cons before casting your vote.

  18. Jerry DiBernardo 2 months ago2 months ago

    I will vote NO on Prop 13! We do not need more taxes collected in a state with absurd taxes already! Wake up people, No New Taxes! No on Prop 13!

    Replies

    • jeffrey boggs 2 months ago2 months ago

      You’re right, Jerry. California is just way oversold, Dems think this is how you run the perfect state, well let me tell you about this claimed perfect state: My daughter went to Disneyland, took 3 hrs to get home. It’s 45 miles away – all traffic!

  19. Pat 2 months ago2 months ago

    Unfair to whom? For those who want a second rate educational facilities? For the “I don’t care about public education” I have no kids? Brother can you spare 2 bits for public education?