My colleague Dowell Myers has many gifts, but among those is his uncanny ability to identify issues that really matter and look at their root causes. So while many people (like me) fretted about the budget crisis, Dowell was reflecting on the various issues that drove the state of California to its knees. One of these issues is Proposition 13. Randy Crane’s Urban Planning Research Blog* presents a summary of the report here. The full report can be found at his Population Dynamics Research Group website.

One of the things so valuable about the report is that it helps quantify the structural privilege that Prop 13 has created for wealth accumulation among native-born Californians. It’s the upside-down of intergenerational equity in the public sphere: cushioning incomes of established homeowners at the expense of newcomers.

This is particularly egregious given what Prop 13 has done in concert with tax aversion in general: increasing populations and increasing demands for service volumes and qualities (like high speed rail) along with this tax aversion has lead us to an impasse [1, 2, 3]. We want sustainable infrastructure, we want green cities, we want poverty alleviation, but we want somebody else to pay for those things. It took a couple of decades, and (I suspect but can’t prove) produced gobs of economic rent for native Californians, but Prop 13 has always been the apotheosis of unsustainable among a suite of unsustainable public policies which systematically reward individual consumption over collective (read: urban) consumption. The proposition limited the ability of state and local governments to respond to changing service demands and shifted the tax burden to those who can afford to pay (and who are likely to benefit like crazy from things like high speed rail and other infrastructure investments) from those who less able to do so via tax instruments more regressive by virtually every measure than the property tax** [4].

References that informed this post
[1] Steurle E. The Tax Decade: How Taxes Came to Dominate the Public Agenda. New York: The Univeristy Press of America; 1992.

[2] Fischel, W. The Homevoter Hypothesis: How Home Values Influence Local Government Taxation,School Finance, and Land-Use Policies. Cambridge: Harvard University Press, 2001

[3] J. Yinger. Review of The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies by William Fischel Cambridge: Harvard University Press, 2001. 45.00cloth; 344pp. Land Economics, 78(4) : 627 − −630, 2002.

[4] Institute on Taxation and Economic Policy. Who Pays? A Distributional Analysis of the tax Systems in All 50 States [Internet]. 2003 ;[cited 2009 Aug 15] Available from: http://www.itepnet.org/whopays.htm

*Horray! Randy’s blog is back up with a new post! I had fretted that Randy Crane’s blog had gone dark, and that would be a shame as it is really a wonderful forum for learning about new research.

**If you ever want to just make me have a stroke, suggest we pay for high speed rail with general retail sales tax or the lottery. We might as well fund school bus programs with cigarette sales on school buses.