Home > Uncategorized > California’s Proposition 13 and New Hampshire’s “Pledge” Have the Same Result

California’s Proposition 13 and New Hampshire’s “Pledge” Have the Same Result

January 24, 2019

In “California Schools Were Once the Nation’s Envy. What Went Wrong?”, in a recent article on the LA teachers strike in The Guardian, Andrew Gumbels’ answers the question in two words: Proposition 13.

Ask any public policy expert what single factor contributed most to the decline of California’s schools, and the answer will invariably be the state’s retro version of Brexit: a referendum, passed in 1978 on a wave of populist anger, that was earth-shattering in its impactand has proven enduringly divisive.

Proposition 13 drastically cut and capped property taxes and hobbled the ability of California counties – and, indirectly, the state – to raise money for schools and other key social programs. The initiative, which passed with close to 65% support, was billed as a grassroots tax revolt against a backdrop of high inflation, rising interest rates and a perception of out-of-control public spending. Overnight, the tax revenue available to pay for public schooling was slashed by one-third, forcing the state to step in and make up some – but not all – of the shortfall.

The school system was already in a modest decline – California had fallen from fifth in the country in per-pupil spending in 1965 to 14th – but the decline now accelerated markedly. Within a decade, California was below the national average. It currently ranks 43rd out of 50 states.

“People always come back to Prop 13 because a lot of the other changes since are a result, either direct or indirect, of that vote,” said Jennifer Imazeki, an economist and education specialist at San Diego State University. “It changed the amount of money districts could raise through property taxes and cut revenue dramatically. And the money’s a big part of it.”

Proposition 13, like many populist ideas, was a simple and blunt method for dealing with a complicated problem… and like most simple solutions had several adverse unintended consequences. The schools were predominantly funded by property taxes which meant that property rich communities had great schools and property poor districts had poor schools. When the California Supreme Court passed legislation requiring more resources for underfunded schools, taxpayers rebelled.  A conservative activist, Howard Jarvis, wrote a referendum that was easy to understand— your property taxes will be lower!— and it passed overwhelmingly and forty years later has become sacrosanct: a law that no politician wanted to challenge under any circumstances even though the majority of taxpayers would benefit from a thoughtfully crafted method of funding public education.

New Hampshire, like California, relies exclusively on property taxes and in many jurisdictions, especially those with a limited tax base, the property taxes are onerous even though the schools in those underfunded communities are poor in comparison. And like California, New Hampshire has been sued on several occasions and lost in court on several occasions, but so far no Howard Jarvis has emerged because no Democrat or Republican has ever run for office based on a platform that would replace the property taxes with a broad based and less regressive income tax…. The candidates for Governor take “the pledge” to never impose a broad based tax and, as a result, no legislature in NH has ever voted to impose any kind of broad based tax. So…. after the legislators ignore court decisions for 10-15 years, a new lawsuit if filed by a different set of aggrieved districts and the cycle begins again.

And NH and CA have the same problems: inequitable and generally underfunded schools and a public that doesn’t want to see its taxes go up. The challenge going forward for public education is daunting: to soften the anger directed toward tax recipients that is at the root of the tax-caps. Part of the conservatives pitch to lower taxes invariably includes an undeserving welfare queen, a “greedy teacher” who earns wages and has benefits and pensions in excess of others in the town, or a weak veteran teacher who draws a high wage “because the union protects them”. Today, the conservatives add “inefficient” to the list and seek a moral high ground by offering every child the chance to attend any school they wish without providing enough money to make that assertion a reality. In sum, as it stands now, there is a long list of reasons to oppose a tax hike and a very short list to support it… and few people who seek social and economic justice are willing to link that with tax increases for those in the top 10-20%— which would need to happen if there is any hope of equity of opportunity in the future.

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