Sunday, June 1, 2003

SACRAMENTO, Calif. — Proposition 13, the 1978 tax-revolt initiative that saved California homeowners billions of dollars while inspiring a national movement to limit taxes, will hit its 25th anniversary Friday in a state and nation profoundly changed by the maverick ballot measure.

“I think it was probably the most important petition that ever passed in California,” said Belle Palmer, 85, of Agoura Hills. She recalls how her oldest son, just out of college, feared that rising property taxes would overwhelm him and drive him from his first house.

“There were lots of people who were really, really scared,” said Mrs. Palmer, who in 1978 gathered signatures supporting the measure at San Fernando Valley banks and grocery stores.

“The taxes were going up very high.”

Dubbed a political earthquake when it passed and later viewed as the first shot of the conservative 1980s Reagan Revolution, Proposition 13 almost overnight cut California property taxes by $6.1 billion as it stripped power to set property-tax rates from government, handing it to citizens.

The measure helped ignite modern ballot-initiative politics, with voters in state after state increasingly willing to pre-empt lawmakers on a range of issues — especially taxes.

Massachusetts, Oregon, Colorado and Florida all copied key provisions of Proposition 13, while voters in 18 other states with the initiative process passed nearly 40 statewide tax-limiting measures, according to a University of Denver study.

“We couldn’t have done it here without California doing it first,” said Barbara Anderson, a Massachusetts tax crusader who spearheaded a similar 1980s measure that capped property taxes.

Proposition 13 has survived California and U.S. Supreme Court challenges and prevailed over countless political efforts to weaken it.

Its central tenets — keeping property taxes capped and requiring two-thirds “supermajority” votes for many new taxes — remain largely intact, despite blame from some analysts for wrecking California’s finances. The proposition is frequently blamed for underfunded police departments, deteriorating infrastructure and uncontrolled suburban development.

Today, Proposition 13 faces a record number of proposals to weaken it, most rooted in a successful effort 2 years ago to overturn the initiative’s two-thirds supermajority requirement to issue bonds. Now legislators are trying to eliminate the supermajority for raising sales taxes and to rejigger some property-tax rules.

But even as California struggles with a $38.2 billion budget deficit, Proposition 13 remains popular.

Nearly 60 percent of adults and 65 percent of homeowners say it has been “mostly a good thing for California,” according to a February survey by the Public Policy Institute of California. Among Republicans, support for Proposition 13 tops 76 percent.

The revolutionary initiative was born of a 1970s inflationary spiral in real estate much like today’s. Property taxes rose in an equally spectacular fashion, spurring an election-day backlash.

“There’s an old saying in American politics: ‘Nothing much happens until the status quo is more fearful than change,’” said Joel Fox, author of “The Legend of Proposition 13” and a former aide to Howard Jarvis, who co-authored Proposition 13 with Paul Gann.

When the polls closed, voters had capped the tax rates permanently at 1 percent of a property’s value, rolling back property assessments to 1975 levels and limiting their increase to 2 percent a year.

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