The Simple Truth About Government Revenue
Post-Prop. 13...
[by Jon Coupal] 11/2/05

On June 7, 1978 a woman called Los Angeles City Hall for assistance. After 11 rings she was greeted by a female voice.

"What took you so long to answer the phone?" the first woman asked.

"Proposition 13," the second woman responded.

It was the day after the passage of Proposition 13 and already the blame game by government employees and big government advocates had begun.

Over the years we have seen Proposition 13 -- which put limits on annual property tax increases and requires voter approval for most new local taxes -- blamed for everything from a rise in hate crimes to the O.J. Simpson verdict.

Especially vitriolic in their condemnation of Proposition 13 have been representatives of the education community, who claim that things were so much better before the tax-limiting measure. One physical education instructor even blamed Prop. 13 for the loss of school equipment. It seems that his students who were putting the shot were losing the shot in tall grass because, according to him, Proposition 13 did not provide enough money to mow the lawns.

Pining for the "good old days" has been taken to an art form by former Sacramento Bee editor Peter Schrag whose book, "Paradise Lost," speaks in glowing terms of California government's pre-Proposition 13 accomplishments.

But now we know it's all a bunch of hooey.

A just-released study of the most recent data available, conducted by the Newport Beach-based Center for Government Analysis (CGA), shows that -- even after allowing for inflation and population growth -- governments at all levels have seen a net increase in revenue since the passage of Proposition 13. In many cases the increase has been significant.

According to the CGA study:

-- Revenues for every category of government in California increased when adjusted for inflation and population growth between FY 1977-78 and FY 2002-03.

-- Total state government revenues adjusted for inflation and population growth grew well over 25% from FY 1977-78 to FY 2002-03.

-- County government revenues in California, adjusted for inflation and population growth, grew 8.43 percent from FY 1977-78 to FY 2002-03.

-- City government revenues in California, adjusted for inflation and population growth, grew over 20 percent from FY 1977-78 to FY 2002-03.

-- K-12 school districts revenues per student, adjusted for inflation, increased over 30 percent between FY 1977-78 and FY 2002-03.

-- Special district revenues in California, adjusted for inflation, grew over 160 percent.

-- State expenditures for K-12 education, adjusted for inflation and population growth, grew almost 99 percent between FY 1977-78 and FY 2002-03, while health and welfare expenditures grew over 48 percent.

-- County expenditures for health and sanitation, adjusted for inflation and population growth, increased over 38 percent, while public protection expenditures increased over 61 percent.

-- City expenditures for police protection, adjusted for inflation and population growth, increased almost 59 percent between FY 1977-78 and 2002-03, while expenditures for sewerage and sanitation increased over 301 percent.

The myths about the "harmful" effects of Proposition 13 have been repeated so many times that some will greet these facts with disbelief. But this work only confirms and updates previous studies by academicians, including Gary Galles of Pepperdine University and John Kirlin when he was with the USC School of Public Administration.

It's time to stop the whining. these are the "good old days," and we should work to make better use of the substantial revenues that taxpayers already provide to government.

*

The complete report "An Analysis of Government Revenues in California Since the Enactment of Proposition 13" may be viewed at www.hjta.org.

CRO

Jon Coupal is an attorney and President of the Howard Jarvis Taxpayers Association.

copyright 2005 Howard Jarvis Taxpayers association

§