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An Historical Analysis of Tax and Fiscal Propositions in California

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An Historical Analysis of Tax and Fiscal Propositions in California TABLE OF CONTENTS TABLE OF CONTENTS ..................................................................................... 1 LIST OF CHARTS ........................................................................................... 2 FOREWORD ............................................................................................... 4 ACKNOWLEDGEMENTS .................................................................................. 6 EXECUTIVE SUMMARY ................................................................................... 7 INTRODUCTION ......................................................................................... 12 PROPOSITION 13 AND THE GREAT TAX REVOLT ..................................................... 13 BONDS AND BORROWING ............................................................................ 18 TAX INCREASES ......................................................................................... 39 TAX CUTS ................................................................................................ 60 PROPERTY TAX ADJUSTMENT PROPOSITIONS ....................................................... 63 REDISTRIBUTIVE MEASURES ............................................................................. 68 REFORMING THE SYSTEM ............................................................................... 82 CHANGING HEARTS AND MINDS ..................................................................... 92 OBSERVATIONS AND CONCLUSIONS ................................................................. 94 APPENDIX A: CALIFORNIA TAX AND FISCAL BALLOT MEASURES, 1978-2004 .................... 97 APPENDIX B: BOND MEASURES, 1978-2004 ...................................................... 107 W APPENDIX C: CALIFORNIA UNEMPLOYMENT RATES, 1978-2004 ................................ 114 O INDEX .................................................................................................. 118 R K I N G P A R T N E R S H I P S U AN HISTORICAL ANALYSIS OF TAX AND FISCAL PROPOSITIONS IN CALIFORNIA, 1978-2004 S A LIST OF CHARTS Homeowner perceived savings and how they voted on Prop 13 ............................................................. 16 California State Bond Measures, 1978-2004 ....................................................................................... 18 Bond Measures for Veterans, 1978-2004 ............................................................................................. 20 Bond Measures for Water, 1978-2004 ................................................................................................. 22 Bond Measures for Schools, 1978-2004 ............................................................................................. 24 Bond Measures for Children’s Facilities, 1978-2004 ............................................................................. 26 Bond Measures for Earthquake Retrofitting, 1978-2004 ....................................................................... 26 Bond Measures for Housing, 1978-2004 ............................................................................................. 28 Bond Measures for Libraries, 1978-2004 ............................................................................................ 29 Bond Measures for Environment, 1978-2004 ....................................................................................... 30 Bond Measures for Prisons, 1978-2004 .............................................................................................. 33 Bond Measures for Transportation, 1978-2004 .................................................................................... 35 Bond Measures for Other Purposes, 1978-2004 ................................................................................... 36 Top 10 Most Expensive Bond Measures .............................................................................................. 37 A S U General Tax Increase Propositions, 1978-2004 ................................................................................... 40 S P I 1990 Field Poll Results for Prop 111-Unaided and Aided Responses ...................................................... 41 H S R E 1992 Field Poll results for Prop 167 – Unaided and aided responses ..................................................... 44 N T R 1990 Field Poll results for Prop 133 – Unaided and aided responses ..................................................... 45 A P 1993 Field Poll results for Prop 172 – Unaided and aided responses ..................................................... 42 G N I K R AN HISTORICAL ANALYSIS OF TAX AND FISCAL PROPOSITIONS IN CALIFORNIA, 1978-2004 O W LIST OF CHARTS Targeted Tax Measures, 1978-2004 ..................................................................................................... 48 1988 Field Poll results for Prop 99 – Aided responses .......................................................................... 50 1998 Field Poll results for Prop 10 – Aided responses .......................................................................... 51 1990 Field Poll results for Prop 126 – Unaided responses .................................................................... 54 1990 Field Poll results for Prop 134 – Unaided responses ................................................................... 54 1990 Field Poll results for Prop 126 – Aided responses ........................................................................ 55 1990 Field Poll results for Prop 154 – Aided responses ........................................................................ 55 1980 Field Poll results for Prop 11 – Aided responses .......................................................................... 57 1980 Field Poll results for Prop 11 – Unaided and aided responses ....................................................... 57 1996 Field Poll results for Prop 216 – Aided responses ........................................................................ 58 1979 Field Poll results for Prop 9 – Aided responses ............................................................................ 61 Tax Cut Propositions, 1978-2004 ....................................................................................................... 61 Property Tax Adjustment Propositions, 1978-2004 .......................................................................... 64-65 Redistributive Measures, 1978-2004 .............................................................................................. 70-71 W O R Spending Limits, 1978-2004 .............................................................................................................. 82 K I N Property Taxation and General Obligation Bonds, 1978-2004 .............................................................. 83 G P Local Taxes, 1978-2004 ................................................................................................................... 86 A R T N State Budgets and Taxes, 1978-2004 ................................................................................................. 90 E R S H I P S U AN HISTORICAL ANALYSIS OF TAX AND FISCAL PROPOSITIONS IN CALIFORNIA, 1978-2004 S A ••• 4 ••• FOREWORD FOREWORD California’s dysfunctional set of constitutional We begin with several basic assumptions. First, amendments and statutes that structure its public no single interest group or ideological constituen- finance system is currently forcing the state to lum- cy has the capacity to impose a new paradigm on ber from crisis to crisis. Meanwhile the public the rest of the state. California combines broad endures declining schools, cuts in vital public serv- diversity with multiple centers of political capacity. ices and a serious underinvestment in essential A new system designed to benefit the few will not infrastructure. By approving Propositions 57 and secure approval from the many. 58 in March of 2004, a massive $38.2 billion Second, narrowly crafted measures with limited budget shortfall was partially reduced – but only objectives that manage to achieve majority support through long-term borrowing. This same election, still leave the overall malfunctioning system in however, prohibited a reliance on bonded debt to place. Raising taxes on the rich to expand mental manage future deficits. Clearly, viable new solu- health services may help thousands of vulnerable tions are badly needed. people, but it will fail to touch millions of others The 2005 Special Election illustrated this dilemma. with pressing needs that require different services. As record-breaking amounts were spent on bar- Our concluding assumption, therefore, is that to rages of exaggerated or distorted campaign media, change the system we must find common ground. voters hit with this slew of advertising were likely Large scale reform will require major coalitions prevented from forming realistic understandings of able to appeal to substantial majorities within the which taxes are high or low and what public serv- electorate. To find, or more accurately, to create ices are genuinely in need of additional resources. that common ground, we will begin with an exam- For example, millions of dollars were raised on ination of the values held by the people of this A behalf of a ballot measure that would have both S state. From an understanding of values, we can U created a bizarre new formula to cap spending and move to innovative policy analysis; based on analy- provided the Governor with sweeping powers to S sis we will initiate the simultaneous tasks of crafting
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