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Had enough? Californians turn down higher taxes, debt

Posted at 7:15 AM, Mar 11, 2020

Everyone knows that living in California comes with a price: Its residents pay some of the nation’s highest taxes on the money they earn, the gas they pump and the clothes they wear. But for the moment, at least, it appears voters have had enough.

The defeat Tuesday of the largest borrowing proposal in the history of California schools — $15 billion for repairs — has opened the question of whether Californian voters put a temporary halt to the growth of government debt because of the unsettled political scene, or because they are on the cusp of a tax revolt akin to one in the 1970s that brought landmark changes to property taxes.

By itself, the crash of the question on the March 3 primary ballot was striking — it’s been a generation since a state school bond failed and there was no telling moment prior to the election indicating voters had soured on it.

But it didn’t stop there. Voters rejected more than half of the 237 local tax and bond measures on that ballot, with several dozen contests still undecided as California authorities wade through hundreds of thousands of uncounted ballots, according to a tally by the California Taxpayers Association.

A final tally of votes remains incomplete, but there is agreement on both sides that no single reason explains the downfall of the big bond. It looks like a mix of factors, not the least of which was jitters over the staggering stock market, the presidential race and the coronavirus outbreak sweeping the globe.

There also was confusion over precisely what the proposal would do and uncertain voters tend to vote no. Polling also shows voters believe taxes are too high.

Additionally, there is widespread anger over soaring housing costs, a troubled and vastly over-budget high-speed rail project and a homelessness crisis in the state’s major cities.

“There is a sense that California isn’t working,” Claremont McKenna College political scientist Jack Pitney said. When a fresh request came from Sacramento for billions in new debt, voters said: “We’ve been taxed enough.”

Supporters had promoted the plan as a desperately needed repair job for crumbling schools, some more than a half-century old. Roughly $9 billion from so-called Proposition 13 would go to K-12 schools, with the rest for higher education.

Dan Newman, a spokesman for the campaign behind the school construction plan, disputed that the election was evidence of deep rupture in California’s political landscape.

For voters, he said, it’s about priorities. He said some voters might have asked why the state needed a record-sized round of borrowing at a time when the economy has been strong and the state is rolling up multibillion-dollar budget surpluses.

The number of losses for tax and bond measures across the state points to “grumpiness toward taxes statewide,” he said. And while voter perceptions ebb and flow, “people seem less inclined right now to think spending money fixes big problems.”

With the coronavirus, the presidential election and the tumult on Wall Street in the headlines daily, “it all tends to make people a little more anxious about the future, and having to hang on to what they have,” he added.

Longtime low-tax crusader Jon Coupal sees it differently. It’s tax fatigue at work, he says, the sense that voters have grown cynical after repeatedly authorizing more money and debt for government with scant evidence that services or classrooms are improving.

And while the state proposal didn’t directly raise taxes, it had a fine-print provision that would have nearly doubled the limit on what a local school district could borrow — debt that could passed on to local taxpayers.

With high tax rates already cutting into household budgets, voters asked, “What we are getting?” said Coupal, who heads the Howard Jarvis Taxpayers Association named after the man who led the property tax revolt. Their answer? It wasn’t worth the investment.

There is anecdotal evidence at least part of the defeat stemmed from confusion over the number — 13 — assigned to the the question on the ballot.

In a fateful twist, the school proposal carried a name that is both famous and infamous in California politics, Proposition 13. That’s the same title as a 1978 law approved by voters that capped annual increases in property taxes until a property changes ownership. It was a blessing for homeowners but meant billions less for California schools.

Landing the controversial number was bad luck. Ballot propositions are numbered under state law in a continuous, numerical sequence, starting with the number 1. Every 10 years, the count is reset. In this case, the new round of numbers kicked off in 2018.

That might not happen again. Democratic Assemblyman Patrick O’Donnell of Long Beach, who co-authored the bill that put the bond on the ballot, has introduced a bill to halt the use of the name in the future after his office received calls from voters confusing the 1978 law and the school bond on the ballot.

“I can’t tell you how many times that I witnessed voter confusion ... in the months leading up to the election,” the bill’s cosponsor, Republican Assemblyman Jay Obernolte of Hesperia, said in a statement.