Monday, October 05, 2009

A first step toward making California governable?

Last week I discussed a talk by Isaac Martin (UCSD) on the political durability of Proposition 13. Isaac pointed out that Proposition 13 contains a whole set of policies: a cap on the property tax rate, assessments based on acquisition value, rather than market value, limits on the growth of the property tax levy , and a 2/3 legislative supermajority for raising state taxes and a 2/3 popular vote supermajority for raising some local taxes.

The point of Isaac's talk was that most people look at Prop 13 as a monolith, when it is not. In particular, he showed that levels of support for each part of the proposition vary. While people are vociferously opposed to any change in the treatment of residential property taxes, they are not so opposed to reducing the supermajority requirement from two-thirds to 55 percent.

Reducing the supermajority requirement would make California more governable. The problem, however, is there seems to be no prospect of reattaching local spending to local revenue sources. This prevents the efficiency mechanisms of the Tiebout model, which predicts that local government compete based on services and their costs, from working in California.

3 comments:

Anonymous said...

All regressive taxes should be immediately and permanently eliminated. All CA needs is an efficient public sector that can provide services for a reasonable cost.

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Bulldozers for Sale said...

I agree that all people in California are demanding for permanent elimination of regressive taxes.