A tax revolt that its backers modestly call "a second American Revolution" has caught fire in California.
The revolution has a name, the Jarvis-Gann Initiative, and a number, Proposition 13, on the statewide June ballot. If approved by the voters, it would cut property taxes in half and provide strict state constitutional limits on the amount of future increases.
It would also reduce local government revenue by $7 billion, causing what its critics say would be disastrous cutbacks in education programs and even in such taken-for-granted services as police and fire departments.
Nor is its potential impact limited to California alone.
A constitutionally imposed tax limitation long has been a favorite idea of conservative theorists such as economist Milton Friedman, who enthusiastically backs Proposition 13. If the measure wins here, as early polls indicate it will, similar proposals are likely to appear on the ballot in every state which uses the initiative process.
"There's no question this is the wave of the future," says Proposition 13's creator, cigar-chomping, fast talking tax crusader Howard Jarvis, who works as director of an apartment owner's association. "We're already circulating petitions in Oregon and there are plans to go ahead in six other states once this passes."
If Proposition 13 is approved, property taxes on all residential and commercial property would be slashed to 1 percent of the 1975-76 market value and allowed to climb only 2 percent of that, annually; until a property taxes. State government, financed by income and sales taxes, would not be effected directly by Proposition 13, but undoubtedly would be called upon to make up some of the lost revenue.
Proposition 13 is an old idea that in other forms has three times been frejected by California voters. But in modern, inflation-ravaged California, where tax bills are soaring, there is reason to think that Jarvis may be right in thinking that its time has finally come.
Certainly, not since Upton Sinclair's EPIC ["End Poverty in California"] revolt of the 1930s in which hundreds of thousands of Depression-wracked voters tried to alter radically the California constitution and tax structure, has a movement struck such fear into the hearts of California's establishment. When a politically powerful in California, it invariably is denounced as "communist". Proposition 13 is no exception.
"If I were a communist, I would vote for Proposition 13," says former governor Edmund G. [Pat] Brown, whose son and current governor, Jerry, is risking his own political reputation in opposing the measure. The senior Brown said that communists would favor such a plan because it would destroy local government.
The other rhetoric derected against Propositon 13 has also been of the heavy-handed variety. Southern California Edison executive director Howard Allen, the president of the Los Angeles Chamber of Commerce, describes it as a "fraud on the taxpayer that will cause fiscal chaos, massive unemployment and disruption of the economy." Los Angeles Mayor Thomas Bradley, not to be outdone, says Proposition 13 will "hit the city like a neutron bomb, leaving some city facilities standing virtually empty and human services devastated."
All of these cries of alarm are music to the ears of Jarvis, who after spending many years working for right-wing Republican causes, now finds that he is called "subversive" by some of the state's biggest businessmen.
Jarvis, who has made hundreds of speeches up and down the state in behalf of his cause, is a disheveled, shouting speaker of the William Jennnigs Bryan school. He engages in florid oratory studded with four letter words. He angers and forgives easily, and seems to enjoy hugely the discomfiture he causes local governments and the news media.
"I've been misquoted and I'll be misquoted again," Los Angeles Magazine quoted Jarvis as saying. "I don't give a good goddam Christ, they couldn't cut me up much more than they do . . ."
The fuel for all the rabid oratory is the runaway housing boom that has disordered the California economy in recent years. Ordinary tract houses have risen in value so steeply that middle-income taxpayers find that a subdivision house they purchased four or five years for $30,000 may now be worth $100,000.
Sometimes these increases can mean a financial windfall for the seller. More often, they leave homeowners with a paper increase in value and a tax bill that has to be paid in real dollars.
It was this situation that created the "taxmania" in which Jarvis' frequently rejected idea became popular. The prevailing theory of its popularity is that it gave taxpayers who felt politically powerless a rare chance to exercise some direct control over the government.
Working through his personal organization, the United Taxpayers of California, Jarvis collected a record 1.2 million signatures in the campaign to qualify his initiative for the ballot. He was assisted by Paul Gann, a retired public relations man from Sacramento, who has a group known as Peoples Advocate.
Both Gov. Brown and the Legislature dallied in the face of the Jarvis threat. State Treasurer Jess Unruh, who pays Proposition 13 would have "a catastrophic effect" on the state school system, says that Brown made "a terrible political error" and indirectly encouraged the Jarvis plan by allowing the state surplus to accumulate to $3 billion.
But the legisture, supported by Brown finally responded by passing a tax-relief plan of its own that also will be on the June ballot for ratification.
The legislative plan, Proposition 8 on the ballot, would provide about 30 percent relief compared to 50 percent under the Jarvis plan. A typical home valued at $100.000, for instance, presently would be taxed $2,495. The tax relief would be $1.333 under Jarvis and $791 under Proposotion 8.
Whether Proposition 8, whose relief is not extended to businesses, will be enough to dampen the fires of the Jarvis tax crusades, nobody knows. The issue is complicated by the fact that Proposition 13 is a constitutional amendment that takes precedence over Proposition 8 becomes a dead letter.
The early polls show Proposition 13 leading, but this has been true of other tax-limitation issues that eventually have lost. Opponents conceded that Proposition 13 is ahead today, but believe it can be defeated if its true impact becomes known.
That impact could be devastating. The San Francisco Board of Supervisors has prepared a contigency budget that calls for the firing of 5,500 city employes, raising bus fares from 25 cents to 75 cents, cutting the funding for the general hospital by 25 percent, cutting library services by 20 percent, and eliminating funds for golf courses, the Human Rights Commission and the Delinquency Prevention Commission.
In Los Angeles, Mayor Bradley says that 8,000 city workers would be fired plus 5,500 more, mostly minority employes under the Comprehensive Employment Training Act. There would be radicals cuts, he predicts, in ambulance, street cleaning, brush clearance, recreation and refuse colleciton services.
Jarvis, who justifiably takes credit for forcing the legislature to pass its tax-relief plan, says that these predictions are "scare tactics" rather than reality. He contends that government could absorb many of the cuts without severely reducing services.
Many not involved in the battle think that both sides exaggerate. They see a tax shift, not a tax reduction, if Jarvis is enacted as the legislature rushes to increase sales, income and corporation taxes.
This fear has created an odd anti-Proposition 13 coalition of labor and minority groups, which fear that high sales taxes would hurt them, and businesses, which is worried about the potential doubling of bank and corporation taxes.
With all this firepower and a potential $1.5 million advertising campaign lined up to stop Proposition 13, it would appear to have little chance. But there are some who think that former Los Angeles Police Chief Ed Davis, a Republican gubernatorial candidate who is supporting Proposition 13, is right when he forecasts that voters will not settle for the lesser relief provided by the legislature.
As Davis put it in a recent debate: "If you're going to fight a revolution and go to all that trouble, you're not going to settle for some promise from King George that he's going to give you half a loaf. . . ."