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Oral History Interview with Hon. Richard Nevins

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Oral History Interview with Hon. Richard Nevins California state Archives state Government Oral History Program Oral History Interview with HON. RICHARD NEVINS Member, California state Board of Equalization, 1959-1987 March 23 and April 18, 1989 Pasadena, California By Jackson K. Putnam and Lawrence B. de Graaf California state University, Fullerton TAX REFORM AND FISCAL POLICIES Volume II RESTRICTIONS ON THIS INTERVIEW None LITERARY RIGWrS AND QUOTATION This manuscript is hereby made available for research purposes only. No part of the manuscript may be quoted for publication without the written permission of the California State Archivist or the Oral History Program) History Department, California State University) Fullerton. Requests for permission to quote for publication should be addressed to: Califomia State Archives 1020 0 Street) Room 130 Sacramento, CA 95814 or Oral History Program History Department California State University, Fullerton Fullerton) CA 92634 The request should include identification of the specific passages and identification of the user. It is recommended that this oral history be cited as follows: Richard Nevins Oral History Interview) Conducted 1987, 1989, by Jackson K. Putnam and Lawrence B. de Graaf, Ora] History Program, History Department, California State University, Fullerton, for the California State Archives State Government Oral History Program. TABLE OF CONTENTS SESSION 4, March 23, 1989 [Tape 9, Side A] .. ..... 345 Provisions of Proposition 13--BOE and Proposition 13 campaign--Arguments against Proposition 13--Reactions to Proposition 13-­ BOE rules on new construction and change of ownership--BOE staff work on Proposition 13. [Tape 9, Side B) .. ... 369 Budget surplus issue--Impact of Proposition 13 on tax policies--Proposition 13 and November elections of 1978--1978 BOE election--Legal challenges to Proposition 13--0ffice of Administrative Law and BOE. [Tape 10, Side A] . 393 National political reaction to Proposition 13-­ Property assessment after Proposition 13-­ Assessment appeals--BOE staff and organizational change after Proposition 13--Assessment legislation after Proposition 13--Bailout-­ Developers' fees. [Tape 11, Side A] . 421 State assessed property and Proposition 13-­ Gasoline tax as buffer to Proposition 13-­ Lottery-- BOE and collective bargaining--BOE reapportionment of 1982--Conway Collis-­ Hazardous waste tax--Energy surcharge and Moore telephone taxes--Other specialized taxes. [Tape 11, Side B) ..... 449 Unitary tax and the ARAMCO case--Unitary tax as political issue--Tax evasion and tax amnesty-­ Budget crisis and supplemental assessment-­ Jerry Brown and sales tax exemptions--Erroneous tax information--Legal challenges to Proposition 13--Gann Spending Limit Initiative. SESSION 5, April 18, 1989 [Tape 12, Side A] . 477 BOE elections of 1958, 1962--BOE campaign funds-­ Television and political campaigns--BOE election of 1962--BOE election of 1966. [Tape 12, Side B) 496 BOE elections of 1966--1971 reapportionment of BOE--1981-1983 reapportionment of BOE--BOE election of 1970--BOE election of 1974--BOE election of 1978. [Tape 13, Side A] 515 BOE election of 1982--1981-1983 reapportionment-­ BOE elections of 1986--Reflections on contemporary politics--Transit district taxes. [Tape 13, Side B) 533 Mobile home taxation--Tax rate mapping program-­ Open space yield rate issue--Assessment rolls compliance program--BOE mission and personal tax policy--BOE administrative efficiency. [Tape 14, Side A] 553 Out-of-state audits and tax evasion--Comparative studies of tax policy--Inheritance, gift, and gasoline taxes--BOE and tax philosophy--Special interests and taxes--Need for tax study. [Tape 14, Side B) . 572 Tax study proposals--Complexity of current taxes. 345 (Session 4, March 23, 1989] (Begin Tape 9, Side A] de GRAAF: Mr. Nevins, we left off just on the brink of the passage of Proposition 13, so what I'd like to do today first of all is to go through Proposition 13 and, part.icularly, the immediate aftermath of its passage. Now, briefly, I'll be reviewing. If you want t.o comment on any of t.hese provisions, t.hat might be good. The four that I pick out as really affecting California taxpayers were, first, the rollback of assessment.s and the freeze of I percent of the full market value as the limit that the property tax could be. NEVINS: Let's first talk about the 1 percent rate limitation. The effective rat.e before Proposition 13 in California was a little over 3 percent, so you get a 66.67 percent reduction ri.ght. there, with the rate reduction. That's very important. Furthermore, the only add-on you could have was to pay for the interest and retiring of t.he existing bonds, and there could be no more general obligation bonds at the local level. It did not forbid the state, but. the state couldn't use property tax money to fund those bonds. 346 de GHAAF: Excuse me. There was an absolute ban? Even if a city had no bonded indebtedness, it could not incur any more bonded indebtedness? NEVINS: Any more general obligation bonds. They could have revenue bonds with a two-thirds vote. That thing has been fought over quite a bit, and there have been court decisions since then that modified that somewhat. But that's the effect of Proposition 13, a revenue bond being a bond where you, like, have a parking structure and you take the revenue from the parking structure to pay the bond. Then, if you don't have enough money, you obligate the other revenues of the city. In the old days, the cheapest bonds, the ones with the lowest rates, were the ones where you gave the full force and credit of the city. All the property tax assets of the city were available to the bondholders to pay the bonds. Furthermore, the bondholders could raise the rate to get the money. I mean, that was the effect of the way general obligation bonds went in the past. That provision was rarely used, but it had been in the past. That was the major immediate financial effect to cities and to property owners, a two-thirds reduction in the tax, period, right there. But the more subtle one is the one that you mentioned first. That is the freeze. I think that the freeze--that is, rolling property tax assessments back to 1975--was the part of the measure that people voted for because they saw that, looking 347 downstream, they could predict what their property taxes were going to be, even though the value of their property increased substantially. This was a great sales factor 1n the passage of 13 as that. provision became better known to people. Although there wasn't much about it 1n any of the campaign, the people sort of picked that. one up. I think that was the final thing that put it over. There were, of course, the political errors made by Governor Brown in his opposition campaign, where he gave people the impression that he was going to fiddle with assessments in the final two or three weeks before the election. He met with the then L.A. County assessor, Alexander Pope, and this got out into the media and created a very bad impression of government. So people had a chance to vote against those in power at that time. Even though Brown was renominated for Democratic governor at that. point, there was this chance for people to show their disfavor with those in government. I think the two t.hings, the disfavor with people in government and the freeze, were probably the determining things in putting Proposition 13 over because, up until about six weeks before the election, it had been only getting 48 percent. I believe when the final count came in, it got just under two-thirds of the votes. de GRAAF: Sixty·-five percent. Another provision was that there was a limit of 2 percent, measured by the California Consumer Price 348 Index, on how much the property could increase. Now, I'm a little bit vague here. Was that a ceiling on the increase in assessed valuation? NEVINS: You had to have two things there. One, you had to have a consumer price index increase of 2 percent. If it was up less than 2 percent, you put. whatever it was. But if it was more than 2 percent, you put the 2 percent. I believe one year in the post.-13 period it was less than 2 percent. I don't remember what the number was but it wasn't very much less; it was like 1.8 [percent] or something like that. But first you had to make a showing that it was more than 2 percent. Otherwise, you had to put on whatever it was. If it wasn't anything, why, you didn't put anything on. de GRAAF: And this was an add on to assessed value? NEVINS: This is an add on to assessed value. Instead of having the market value of the property, you had it related to this price index. I think it was well known by Californians that property values went up faster than the cons~~er price index. That was very appealing. It went right back to this thing where you could estimate what your taxes were going to be at any given time in the future, assuming you didn't make any major additions or something like that. de GHAAF: I was also wondering what was the significance of a third feature, the ban on any new taxes on real property. The first question I pose, were any such different taxes on real property being considered around 1978 or maybe before? 349 NEVINS: They certainly were. There were taxes in some communities, a tax measured by the sale price of the property.
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