California’s Proposition 13, enacted in 1978, limits the property tax on real es

Question

California’s Proposition 13, enacted in 1978, limits the property tax on real estate to one percent of the market value when purchased, and a maximum annual increase in the tax amount of two percent. Followers of Henry George contend that Prop 13 deprived local government of its most suitable tax base, real estate taxed, and forced the state to increase other taxed that hurt business activity, and shifted power from local government to the state. According to the Georgists, Prop 13 did not constrain state spending and caused the budget deficit to grow so that California was hit with a fiscal crisis in 2008-09. What could be done to solve California’s financial crisis?

Explanation / Answer

A major source of the deficit was a decline in state revenues from more than $100 billion in 2007 to about $85 billion in 2008—mostly due to declines in personal income taxes, corporate taxes and other taxes.

Required legislative supermajorities

News reports and commentators have cited the state's various legislative supermajority requirements as a contributing factor to the state budget crisis.The state has a long history of supermajority requirements with a 1933 state ballot measure mandating a two-thirds supermajority to pass the state budget and California Proposition 13 (1978) mandating another two-thirds supermajority to pass tax increases.The National Conference of State Legislatures (NCSL) notes that, as of 2008, only 9 states required a supermajority to pass the state budget and of those 9, only 3 (California, Arkansas, and Rhode Island) required a two-thirds supermajority instead of the three-fifths supermajority to pass the state budget.The NCSL also notes that, as of 2008, 15 states required a supermajority to raise taxes and that California was among the 10 of those 15 that require more than a three-fifths supermajority (i.e., a 2/3 or 3/4 supermajority).

Reforms

Proponents of ending the state's supermajority requirements note that "Since 1980, the California State Legislature has met the June 15 constitutional deadline for sending a budget to the governor only five times (of thirty budget periods). Only ten times has the brokering been done by the July 1 start of the fiscal year."They sponsored California Proposition 25 (2010), a ballot initiative that changes legislative vote requirements to pass a budget, but not tax increases, from two-thirds to a simple majority. California Proposition 25 (2010) was approved in the state's November 2010 general election ballot.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.