The long-anticipated tax revolt has become a reality in the nation's most populous state, terrifying California politicans and spreading chills across the country.
Taxpayers elsewhere are reduced to grumbling over takes; Californians can actually do something, thanks to the "initiative" system - a vestige of the progressive era that puts legislative questions to the state's voters at every election. In the May 6 primary, voters here will have a chance to pass a consitutional amendment reducing property taxes to 1 percent of market value. That radical step, yielding $7 billion in instant tax relief, would pass overwhelmingly today.
Nor is the confidence the tide can be turned in less than three months, confronting politicians with the utter collapse of governmental financing. Having reacted to the wailing of taxpayers with cool indifference, elected officials now face tax revolt in all its fury.
The basic cause of rebellion is inflation, which force-feeds tax payments - federal, state and local - in what amount to annual tax increases. Nowhere is this more painful than in California, where the inflated real-estate market has producted a steadily escalating and frequently regressive property tax.
Some California homes purchased for $50,000 a decade ago now have risen so sharply in market value that the property tax totals $5,000 in year. Because of inexorable real-estate inflation, that tax goes up annually. If the homeowner's income is falling, as with many other taxpayers, hardship is intense.
Consequently, an anti-property-tax constitutional amendment, peddled for years without success by a 74-year-old right-wing Republican activist named Howard Jarvis, suddenly found a ready-made constituency. Without help from professional petition circulators, Jarvis collected 1.5 million signatures (three times the number needed) widespread public support for the jarvis amendment today.
In contrast, scarely any respectable California politician supports the proposal. Even former Los Angeles Police Chief Edward Davis, seeking the Republican nomination for governor, has dismayed his conservative supporters by refusing to back it. Like more conventional politicians, Davis points out the chaos of a $7-billion revenue loss.
This gap between politicans and public is typified by one prominent California Republican. As a politician, he views the Jarvis amendment as the ultimate in demagoguery and publicly opposes it. But as a voter, what will he do May 6? "Hell", he replied, chuckling, "I think I'll vote for it".
Thougtful state government officials privately admit they cannot blame any Californian for supporting the jarvis amendment. In the words of one state bureaucrat, "How can we justify sitting on $6 billion while ordinary working people have to pay $200 a month or more in property tax?"
"Sitting on $6 billion" refers to the state's average - not maximum - daily cash balance in 1977, which never dipped below $4 billion. The surplus at year's end was estimated by fiscal experts for Gov. edmund G. Brown Jr. at $3 billion (though other state officials privately call this a gross underestimate). But even accepting the $3-billion surplus, why did Brown and the legislature fail to turn part of it back to hardpressed taxpayers long ago?.
The answer lies in the sad reality that tax relief has far lower priority for officeholders than it deserves. Not until the Jarvis amendment appeared did either Brown or the legislature push hard for badly needed property-tax relief. Even with the critical need for passage of property-tax relief to forestall Jarvis, Brown has not been able to unravel a legislative deadlock.
That may be because the true priority for tax relief remains low. The governor stressed to us the need for a "prudent reserve" and, in football-coach fashion, tacks on his office bulletin board newspaper clippings of gloomy financial forecasts. So he limits relief to $1 billion - scarely enough to stave off Jarvis.
Accordingly, the political establishment warns the Jarvis amendment would force massive new sales or income-tax levies. But Jarvis himself rebutted that with fiendish efficiency over television the other day, pointing to fine print in his amendment that requires a two-thirds vote in the legislature to raise taxes.
The $7 billion in tax relief, then, may have to be absobed somehow by cutting supposedly uncuttable state and local budgets, slashing away at supposedly indispensable services supposedly demanded by taxpayers. Such a fascinating prospect is why that prominent Republican publicly refers to the Jarvis amendments as demagogic while privately admitting he may vote for it.