McGeorge School of Law

Proposition 13 at Twenty-Five

Proposition 13 at Twenty-Five

By Jennifer Ehn
JD, and Governmental Affairs Certificate, University of the Pacific,
McGeorge School of Law to be conferred May 2004
B.S., Animal Science, Colorado State University
B.S., Agri-Business, Colorado State University


Copyright © 2004 by University of the McGeorge School of Law

Table of Contents

I. Introduction
II. Proposition 13 and Its Evolution
III. Effects of Proposition 13
IV. Legal Challenges
V. The Future of Proposition 13
VI. Conclusion

I. Introduction

Twenty-five years have passed since Proposition 13 was approved by the voters in the State of California. At times considered legendary, at other times blamed for many of California's problems, Proposition 13 is one of the most well known and talked about initiatives. This report will discuss the events that led up to the passage of Proposition 13, its practical effects on property owners, the effects that it has had on State and Local governments and the legal challenges that it has faced. As Proposition 13 turned twenty-five last June, debate resurfaced over its effectiveness. This report will discuss the proposed changes and the public perception of Proposition 13.

II. The Evolution of Proposition 13

Before Proposition 13, property taxes were based on a percentage of assessed value of the commercial and residential property. This percentage level was set by the local governments and averaged about 3% of the assessed value of the home. In the mid-1970's, California's housing prices increased dramatically from 5% per year to a 5% increase per month. Democracy in Action, Jim Shultz, Essay: How Big Corporations Became Proposition 13's Biggest Winners, http://www.democracyctr.org/demaction/proposition13.html (accessed Nov. 2, 2003). The median price of existing homes doubled from $31,530 in 1973 to $62,430 in 1977. Nordlinger v. Hahn, 505 U.S. 1, 4 (1992). Legislators were under enormous pressure to enact some kind of tax relief for high property taxes and higher income taxes. Democracy in Action, http://www.democracyctr.org/demaction/proposition13.html. Legislators put tax relief at the top of their agenda, but there was not a consensus on what form the relief should take. Id. Some proposals advocated tax relief for low-income homeowners and renters while other proposals were aimed at middle and high-income homeowners. Id. Just before the legislature was to adjourn in August of 1977, a tax relief package came up for a vote in both the Assembly and the Senate. The proposal included tax relief with limits on local spending. Id. The Assembly passed the proposal but it stalled and died in the Senate because of complaints the bill was too liberal and too complicated to explain to the constituents in their districts. Id.

As efforts in the legislature failed, two businessmen, Howard Jarvis and Paul Gann, came up with a plan to draft an initiative that would provide direct tax relief to property owners. Id. Their proposal included a 1% cap on the property's 1975 market value. The measure, which became known as Proposition 13, would result in a $6.1 billion savings for taxpayers with two-thirds of the savings going to commercial and income property. Id.

Howard Jarvis and Paul Gann took the proposal to the people. They appeared on conservative radio talk shows, went house to house and gathered signatures from the more rural counties in the northern part of California. Id. They collected 1.2 million signatures for the initiative, an amount significantly higher than the 500,000 signatures required to qualify for the ballot. In the meantime, the legislature had come up with their own plan, Proposition 8. Proposition 8 provided for a 30% cut in homeowner property taxes and a simple tax credit for renters that would result in only a $1.6 billion cut in revenues.

On June 6, 1978, Proposition 13's fate was sealed. With an overwhelming 2 to 1 vote, Proposition 13 passed and carried nearly every county in the state. The less severe tax cut of Proposition 8 had failed by a vote of 47% to 53%. Id.

III. Proposition 13's effects

a. Practical Effects of Proposition 13

Proposition 13 added Article XIII A to the California Constitution, which included four distinct elements. Amador Valley Joint Union High School Dist. v. State Bd. Of Equalization, 22 Cal. 3d 208, 220 (1978).

The first element in section 1, subdivision (a), changed California's property tax into an acquisition value property tax. Proposition 13 no longer allowed local governments to set the property tax rates. Instead, Proposition 13 limited property taxes statewide to 1% of the property's market value. Howard Jarvis Taxpayers Association, Joel Fox Proposition 13: A look Back, http://www.hjta.org/content/ARC000024B_Prop13.htm (accessed Oct. 22, 2003).

Section 2 defined the full cash value as "the county assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." Cal Const. Art. XIIIA, § 2. Annual inflation increases could also be added but were capped at 2%. This limitation meant a house valued at $150,000 in 1975 would be charged a $1,500 yearly tax subject to the 2% annual inflationary rate.

These first two elements resulted in a reduction in property taxes of about 57%. Howard Jarvis Taxpayers Association, http://www.hjta.org/content/ARC000024B_Prop13.htm. In the 1977-78 fiscal year, property tax revenue for state and local governments per $1,000 of personal income was $63.57. See Table A-1. California Department of Finance, http://www.dof.ca.gov/html/fs_data/stat-abs/Tables/P17p18.xls (accessed Oct. 31, 2003). After Proposition 13 was enacted, that number decreased to $30.37 per $1,000 of personal income. Put a different way, prior to Proposition 13's enactment, California ranked anywhere from 2nd to 6th in the nation for highest amount of property tax revenue collected by state and local governments. After Proposition 13, California dropped to 35th in the nation. See Table A-2. Id. Currently, California ranks 36th in the nation producing property tax revenues of $26.37 per $1,000 of personal income. Id.

The last two elements that were added dealt with restrictions on the imposition of state and local taxes. Amador Valley, 22 Cal. 3d at 220. Section 3 limited the ability to change California state taxes and required a two-thirds vote from the members of the legislature. Section 4 limited cities, counties and special districts, by requiring a two-thirds vote of the qualified electors when imposing local taxes. Id. Both of these sections had an exemption clause, which disallowed the state or local entities from imposing any ad valorem taxes on real property or a transaction or sales tax on the sale of real property. Cal. Const. Art. XIIIA, § 3, 4.

b. Exceptions

Section 2 of Article XIIIA describes how the full cash value will be determined when the property changes hands and the exceptions to this general rule. When a new property owner acquires a piece of real property, the full cash value is usually computed by the market price paid for the property. California Real Estate & Practice § 401.01 (Matthew Bender & Company, Inc. 2003). There are exceptions to this practice and the following properties are subject to special valuation rules: open-space land, historical property, certain golf-courses, certain owner-occupied single-family residences, un-patented land sold by the state, taxable extraterritorial government-owned property, timberland, real property interests in timeshare estates and timeshare uses and oil, gas, mining, and geothermal properties. Id.

Certain newly constructed additions to houses are exempted if they meet one of the requirements of Section 2(c) and certain changes in ownership due to eminent domain proceedings do not constitute changes in ownership. Cal. Const. Art. XIIIA, § 2 (c). Disasters, real property transfers between spouses, and, real property transfers between family members, are exempted as a change in ownership as well. Id.

c. Proposition 13's effect on state and local government

After the approval of Proposition 13, property taxes were cut by $6.1 billion dollars. At the time of its passage, the state government had a budget surplus, and to ensure economic stability the local governments were given a bailout of $2.7 billion dollars. Democracy in Action, http://www.democracyctr.org/demaction/proposition13.html (accessed Dec. 2, 2003). Problems began to arise in the 1990's, when California faced a recession and the legislature had to reverse the Proposition 13 bailout requiring schools and local governments to come up with their own monies for funding. Id.

One of the effects of Proposition 13 did not come from the initiative itself, but the legislative response that resulted. Prior to Proposition 13, local governments were able to assess and collect property taxes. Jon Sonstelie, Peter Richardson, Public Policy Institute, School Finance and California's Master Plan for Education, http://www.ppic.org/content/pubs/R_601JSR.pdf (accessed Dec. 3, 2003). Money that was distributed to the school districts came directly from the local government. After Proposition 13, the property tax was converted into a state property tax. The state could set the guidelines for collecting property taxes, and then redistribute the revenue back to the local governments for education. Id. Proposition 13 took the power away from the local governments to set the assessment levels of property tax to reflect the amount of money that would be needed for school expenditures. Opponents argue that Proposition 13 tied local governments' hands by not permitting property taxes be collected locally. Instead, all of the property tax revenues go directly to the state government, and the state redirects the allocation of money to the local school districts. Id.

IV. Legal Challenges

a. Amador Valley Joint Union High School District

Four months after its passage, Proposition 13 was reviewed in the Supreme Court of California. In Amador Valley, the petitioners argued that Proposition 13 violated the State constitution. The petitioner's based their arguments on several claims: it was a constitutional revision; it violated the single-subject requirement; it violated the federal and state constitution equal protection clauses; it violated petitioners' federal constitutional right to travel; it violated the federal contract clause and impaired contracts; the initiative measure had a misleading title and summary; and lastly, it was void for vagueness. Amador Valley, 22 Cal. 3d at 218.

First, petitioners argued that Proposition 13 was invalid because it was a constitutional revision instead of an amendment. Id. at 221. Constitutional revisions require a two-thirds vote by the legislature and approval at a constitutional convention. Id. However, constitutional amendments can be made through the initiative process. Id. at 222. The Court then described what circumstances differentiate a revision from an amendment. The petitioners argued that implementation of Proposition 13 would result in the loss of home rule and the conversion of our current republican form of government to a democratic form of government. Id. at 224. Not only does Proposition 13 limit tax revenues, but it also takes the power from the local governments and gives it to the state to allocate money derived from property tax revenues. Id. at 225. The would result in changes to the nature and operation of the government's structure, therefore constituting a constitutional revision rather than an amendment. Id. at 221.

The California Supreme Court held that although Proposition 13 would result in various substantial changes to the constitution, it was only an amendment because the changes were narrowly tailored to the objective of changing the taxation system. Id. at 228. According to the Court, a change in the voting requirement did not amount to a revision of the constitution. The Court further stated it was not uncommon to have similar voting requirements for financial matters, and that the Proposition would not effect home rule. Id. The Court cited Article XIII, Section 20 of the State Constitution that authorizes the legislature to set maximum property tax rates. Id. at 228. The Court concluded this new article, implemented by Proposition 13, would be no more threatening to home rule than Article XIII, § 20. Id. The Court, while not endorsing the Proposition, did state the initiative process was a direct form of government from the people. Id. Finally, the court held that it would not limit the ability of people, through the initiative process, to achieve such a limited purpose of a new system of taxation. Id.

The petitioner next argued that Proposition 13 violated the single subject rule. The single subject rule requires all parts of an amendment to be reasonably germane to each other. Id. at 230. Petitioners argued that each of the elements in Proposition 13 constituted separate subjects. Id. 231. They also argued that if each of these four elements were on the ballot separately, then they might not have been approved individually. Id. at 232. The Court held that it would decline to use such a strict judicial application of the single subject rule and again cited to the intent of the initiative process. Id. The Court reasoned that the provisions formed an interlocking package and found the provisions to be reasonably germane to accomplish effective real property tax relief. Id. at 231. Although not all of the four sections pertained solely to property taxation, they did all relate to the general subject of property tax relief. Id. at 231.

Petitioners third argument was that two provisions of Proposition 13 violated their equal protection rights. First, petitioners claimed the rollback provision of the assessment valuation would be unfair to two people receiving similar government services but paying different property taxes based on the timing of their home acquisition. Id. at 233. The Court dismissed this argument by noting that each property taxpayer is treated similarly when they are required to pay 1% of the assessed value of their property at the time of purchase. This formula applies to each taxpayer no matter when the property is acquired. Id. at 234. Applying a rational basis review, the court found the demands of the equal protection clause were satisfied. The petitioner's second equal protection claim was based on the two-thirds vote requirement for special taxes by local agencies, which resulted in an equal protection violation of those voting against Proposition 13. Id. at 233. The Court quickly dismissed this argument because petitioners relied on an earlier case, Westbrook v. Mihaly, 2 Cal. 3d 765 (1970) that was vacated. The Court emphasized that the equal protection clause would not be violated because people who vote in favor of tax measures cannot represent a definite, identifiable class. Id. at 237.

The Court then confronted petitioners' fourth argument that Proposition 13 violated their right to travel by allowing established residents to have a lower tax rate than newly arrived residents. Petitioners argued that Proposition 13 would deter property owners from moving to another residence and therefore inhibit travel. Id. at 238. The Court dismissed this argument and held that the new tax system would benefit all residents, whether or not they were established or newly arrived. Id. The taxing scheme in Proposition 13 would not act as a penalty, but instead would be a more stable and fixed income source. Id.

The court next addressed the petitioner's impairment of contracts argument. Petitioners pointed to municipal obligations that did not require voter approval, such as pension and health plan benefits, labor and other municipal contracts, as well as redevelopment agency bonds. Id. at 238. They argued that even with the exemption provision of Proposition 13, there is still a risk of impairment of contracts, particularly with redevelopment agency bonds. Id. at 239. The Court rejected the impairment argument based on prematurity because there was no indication that the local governments were going to be required to default in, "meeting their preexisting contracts or in liquidating their outstanding bonds." Id. at 239. Further, because there was no indication of specific and substantial impairment of contracts, the Court concluded the claim was premature. Id. at 242.

Petitioners' next argument was that the Proposition was void for lack of proper initiative title and summery. Id. at 242. The petitioners' contention was that the title, "Initiative Constitutional Amendment- Property Tax Limitation," was misleading because it failed to address the last two elements of the initiative that limited state and local governments ability to tax by requiring a supermajority vote. Id. To determine whether a title and summary have complied, the Court presumes that the Attorney General's prepared summary and title was accurate. Id. at 243. An initiative title and summary should not catalog all of the provisions in the measure, but should avoid misleading the public. Id. at 243. Although the title did not include a reference that the vote would be changed from a majority to a supermajority, the Court held it was not a crucial factor since the Proposition had been widely debated and publicized. The Court went on to hold, that although the title was technically imprecise, most of the petition signers would not be misled by the title. Id.

The last argument forwarded by petitioners was that the Proposition was void for vagueness. Id. at 244. Petitioners argued there were words and phrases throughout the article that were vague and ambiguous. Because of the ambiguity in several of these words and phrases, the Petitioners suggested the entire Proposition was incapable of a rational interpretation. Id. The Court rejected this argument and stated that "constitutional and other enactments must receive a liberal, practical, common-sense construction that will meet changed conditions and the growing needs of the public." Id. at 245. There were areas of the Proposition that were uncertain, but the Court held those provisions would be subject to later judicial challenge. Id. at 247. The Court also held that ambiguities may be resolved by the legislature or the administrative agencies. In this case, the Court pointed to the legislature and its enactment of Article XIII A and the subsequent legislation. Id. at 246.

In conclusion, the Court upheld all provisions of Proposition 13. Id. at 248. It stated its duty was to "jealously guard" the initiative power that is "one of the most precious rights of our democratic process." Id. (quoting Associated Home Builders, etc., Inc. v. City of Livermore, 18 Cal. 3d 582, 591 (1976).

b. ITT World Communications v. City of San Francisco

In ITT World Communications, the plaintiff alleged that the rollback provisions of Proposition 13 applied to unit taxation of public utility property. ITT World Communications v. City of San Francisco, 37 Cal. 3d 859, 862 (1985). The rollback provision of the Article XIIIA provides that the full cash value of the property to be taxed will be based on its 1975-76 tax bill under full cash value. Id. at 864. ITT World Communications alleged that it deserved a tax refund because its property was not being given the rollback provision effect, which resulted in it being charged at a higher rate. Id. at 862. To determine if Proposition 13 applied to unit taxation of public utility property, the Court looked at the legislative history of the regulations that were promulgated after the passage of Proposition 13. Id. at 865. The State Board of Equalization was responsible for implementing Proposition 13 and specifically addressed the rollback provision to specific types of property. Id. The Board concluded that among other types of properties, the rollback provisions did not apply to state-assessed property. Id. at 866. The legislature later overturned the Board's decision except for its conclusion that the rollback provision did not apply to state-assessed property. Id. at 869. The Court held that property assessed by the State Board of Equalization, like a public utility property, was not subject to the rollback provisions of Proposition 13. Id. at 871.

c. Nordlinger v. Hahn

In 1988, petitioner Stephanie Nordlinger bought a house in Los Angeles County for $170,000. Nordlinger v. Hahn, 505 U.S. 1, 3 (1992). The previous owners of the house had bought it for $121,500 two years prior. Id. After purchasing the house, Nordlinger found herself paying $453.60 more in property tax than the previous owners did just a year earlier. Nordlinger also claimed that she was paying as much in taxes as someone with a $2.1 million Malibu beachfront home purchased pre-1976. Petitioner challenged Proposition 13 as violating her constitutional right to equal protection of the law. Id. at 10. The U.S. Supreme Court granted certiorari to determine whether Article XIIIA was constitutional.

Petitioner Nordlinger urged the Court to use a heightened level of review because her constitutional right to travel was infringed upon. Id. at 10. The Court noted that unless the classification jeopardized the exercise of a fundamental right or categorized on the basis of a suspect characteristic, then rational basis review would be used. Id. Nordlinger argued the exception that allowed homeowners over 55 to transfer the property to their children was classified on the basis of California residency. The Court rejected this contention and held that Nordlinger lacked standing to assert that claim because previously, she lived in an apartment. She had not shown that she had been impeded from traveling or settling in California. Id. at 11.

Using a rational basis review, the Supreme Court looked at whether Article XIIIA rationally furthered a legitimate state interest when it differentiated between newer and older owners. Id. at 11. The opinion cited at least two reasons that supported the differential treatment. First, the Court held the State "has a legitimate interest in local neighborhood preservation, continuity, and stability." Id. at 12. Second, the Court found that a new owner does not have a vested interest in acquiring the lower tax rate of the previous owner. Instead, when new owners get ready to purchase a new house, they are aware of the tax liability that they will incur. Id. at 13. The Court finally concluded the exemptions allowed in the California tax system did not make the taxing scheme discriminatory. In an 8-1 decision, the Supreme Court upheld the taxing structure stating, "article XIIIA is not palpably arbitrary, and we must decline petitioner's request to upset the will of the people of California." Id. at 18.

V. The Future of Proposition 13

In February of 2003, the Public Policy Institute conducted a study of Californians about their views of Proposition 13. Mark Baldassare, Public Policy Institute of California, PPIC Statewide Survey February 2003, http://www.ppic.org/content/pubs/S_203MBS.pdf (Dec. 3, 2003). Fifty-seven percent of those responding thought Proposition 13 turned out to be mostly a good thing. Id. Broken down further, fifty-five percent of democrats, fifty-five percent of independents and seventy-six percent of republicans thought of Proposition 13 as mostly a good thing. Id. So where does California go from here?

There have been numerous suggestions to change the structure of our taxing system. Perhaps one of the most discussed is a change in the taxing structure for non-residential properties. Before Proposition 13 was voted on, Californians were told that two-thirds of the tax relief would go to businesses. In 1978, that caveat did not seem to have any effect on the sixty-seven percent of voters that passed Proposition 13. A quarter of a century later, when our state budget has experienced one of the worst deficits in its history, that caveat resurfaces.

Jim Shultz of The Democracy Center speaks of Proposition 13 in the plural. Stating that there are two Proposition 13's: one that protects homeowners, and another that gives owners of corporate and income property two-thirds of the property tax relief in the state. Democracy in Action, http://www.democracyctr.org/demaction/proposition13.html. Residential properties frequently change hands, and as long as they do not fit in with one of the exceptions, they are reassessed. On the other hand, corporations have a different system to determine when they change hands which results in keeping property tax levels for business properties low.

Proponents of Proposition 13 argue against this dubbed "split roll" approach. They argue that businesses already shoulder two-thirds of the property taxes paid for in the state. Howard Jarvis Taxpayers Association, Proposition 13: Love it or Hate It, Its Roots Go Deep, http://hjta.org/content/ARC000024C_Prop13.htm (accessed Oct. 22, 2003). Increasing property taxes on business property owners would result in increased costs and possible job reduction or even movement out of California. Id. If all businesses, regardless of size or gross revenue, were treated equally, small business owners might not be able to dissipate the increased costs and they may even go out of business.

The Public Policy Institute of California raised this question to Californians in their February 2003 survey. When asked the question, "how do you feel about eliminating limits on property tax assessments for commercial property as specified under Proposition 13, which would make all commercial property taxed at its current market value?", fifty-two percent of all adults favored it, thirty-eight percent opposed it, and ten percent were undecided. Mark Baldassare, Public Policy Institute of California, PPIC Statewide Survey February 2003, http://www.ppic.org/content/pubs/S_203MBS.pdf (Dec. 3, 2003).

Another argument against changing Proposition 13 is that Californians are taxed in other areas, such as personal income tax and sales tax that make up for the lower property tax rates. The California Department of Finance provided a ranking of states based on their total tax revenue of State Government per $1,000 of personal income. See Table A-2. California Department of Finance, http://www.dof.ca.gov/html/fs_data/stat-abs/Tables/P9p10.xls (accessed Oct. 31, 2003). During the 1977-78 fiscal year, California ranked 13th in the nation for highest total tax revenues. In the fiscal year 1999-00, California ranks higher at 10th in the nation for total tax revenues. Id. Proponents argue that even though property taxes have been lowered, the state and local governments have increased taxes in other areas such as personal income tax. They argue that even though monies to local governments from property taxes have decreased, California still ranks higher than it did in 1977 for total tax revenues.

Table A-3

Total Tax Revenue of State Government

Per $1,000 of Personal Income

Fiscal Year 1977-78

Fiscal Year 1999-00

Rank

State

Amount Per $1,000

of Personal Income

 

Rank

State

Amount Per $1,000

of Personal Income

1

Alaska

$130.71

 

1

Hawaii

$102.13

2

Hawaii

111.42

 

2

New Mexico

98.45

3

New Mexico

109.19

 

3

Vermont

96.49

4

Delaware

100.46

 

4

Delaware

91.93

5

Minnesota

97.38

 

5

Minnesota

90.71

6

Wisconsin

96.40

 

6

West Virginia

88.25

7

Wyoming

94.20

 

7

Wisconsin

88.05

8

Mississippi

91.03

 

8

Maine

86.32

9

Kentucky

89.59

 

9

Arkansas

85.82

10

Washington

88.91

 

10

CALIFORNIA

84.54

11

West Virginia

88.13

 

11

Kentucky

83.60

12

Arizona

87.49

 

12

Idaho

83.17

13

CALIFORNIA

86.70

 

13

Mississippi

82.26

14

Louisiana

85.40

 

14

Michigan

82.07

15

Maine

84.78

 

15

Alaska

80.39

16

South Carolina

84.30

 

16

Utah

80.22

17

Vermont

83.10

 

17

North Dakota

79.36

18

Idaho

82.06

 

18

Connecticut

78.86

19

New York

80.94

 

19

North Carolina

76.98

20

Utah

80.69

 

20

Wyoming

76.12

21

North Carolina

79.55

 

21

Oklahoma

75.77

22

Massachusetts

78.66

 

22

Massachusetts

73.58

23

Michigan

78.28

 

23

Montana

72.58

24

Arkansas

77.98

 

24

Washington

71.83

25

Nevada

77.21

 

25

Iowa

70.55

26

Maryland

76.75

 

26

Rhode Island

69.91

27

Alabama

76.59

 

27

South Carolina

69.75

28

North Dakota

76.56

 

28

Kansas

68.10

29

Pennsylvania

75.83

 

29

New York

67.68

30

Oklahoma

73.78

 

30

Arizona

67.30

31

Montana

72.57

 

31

Oregon

66.35

32

Rhode Island

72.37

 

32

Nevada

66.23

33

Georgia

71.93

 

33

Nebraska

66.15

34

Iowa

70.81

 

34

Pennsylvania

65.48

35

Oregon

69.60

 

35

Louisiana

65.20

36

Tennessee

68.52

 

36

Indiana

65.04

37

Florida

66.63

 

37

Ohio

64.38

38

Indiana

66.54

 

38

Alabama

64.09

39

Virginia

66.27

 

39

Georgia

63.45

40

Illinois

66.11

 

40

New Jersey

62.69

41

Nebraska

64.84

 

41

Maryland

61.67

42

Colorado

64.64

 

42

Illinois

60.33

43

Kansas

63.34

 

43

Missouri

59.43

44

Connecticut

61.88

 

44

Virginia

59.30

45

Texas

61.76

 

45

Florida

59.14

46

New Jersey

58.71

 

46

Colorado

55.29

47

Missouri

55.86

 

47

Tennessee

55.19

48

Ohio

54.54

 

48

Texas

50.94

49

South Dakota

54.48

 

49

South Dakota

50.50

50

New Hampshire

43.34

 

50

New Hampshire

45.38

Opponents argue that although California ranks higher than it did in 1977, the charts do not show the negative effects that Proposition 13 has had on our school system. One of the negative effects claimed is a decrease in teacher to pupil ratio. A research brief from the Public Policy Institute of California suggests that in 1997, the teacher to pupil ratio had increased 38% more than the average for other states. Public Policy Institute of California, Has School Finance Reform Been Good for California?, http://www.ppic.org/content/pubs/RB_200JSRB.pdf (accessed Nov. 2, 2003).

VI. Conclusion

The true consequences or benefits of Proposition 13 may not be quantifiable. What would have happened in 1978 if Proposition 13 had not passed? What if Proposition 8 had passed instead? What if there had not been such a dramatic increase in property prices in the mid-1970's? What if the legislature had passed legislation that summer of 1977 before they adjourned? Where would California be without Proposition 13? Would California have better roads, more police, better test scores, less smog, more social services, less crime, more parks, less cars and no deficit? Or is Proposition 13 just a scapegoat for problems that every state in the nation faces. If it is to blame, why does fifty-seven percent of all adults in a February 2003 public policy poll think Proposition 13 turned out to mostly be a good thing?

It is possible that reforms of Proposition 13 will make their way to the ballot. Jon Coupal, President of the Howard Jarvis Taxpayers Association, believes it is possible because the enemies of Proposition 13 can raise the one million dollars needed to try and qualify it. Correspondence Interview with Jon Coupal, President, Howard Jarvis Taxpayers Association. (Nov. 13, 2003). Passing it, he thinks, is a different matter. Id. With a new Governor in town, Proposition 13 has emerged as something that is untouchable. When asked if Governor Schwarzenegger was thinking of doing anything to change Proposition 13, Mr. Coupal stated that the Governor is a strong defender of Proposition 13. Id.

Maybe the effects of Proposition 13 are not what people agree with, but instead what it signified and continues to signify. In the summer of 1977, when legislators did not provide the legislation for tax-reform that so many Californians requested, 1.2 million voters signed a petition that later became Proposition 13. The California Supreme Court in Amador Valley quoted a study on the California Initiative,

.the initiative is in essence a legislative battering ram which may be used to tear through the exasperating tangle of the traditional legislative procedure and strike directly toward the desired end. Virtually every type of interest-group has on occasion used this instrument. It is deficient as a means of legislation in that it permits very little balancing of interests or compromise, but it was designed primarily for use in situations where the ordinary machinery of legislation had utterly failed in this respect. It has served, with varying degrees of efficacy, as a vehicle for the advocacy of action ultimately undertaken by the representative body.

Amador Valley Joint Union High School, 22 Cal. 3d at 228-29 (1978) (quoting Key & Crouch, The Initiative and The Referendum in California, 485 (1939)).

The future of Proposition 13 may not depend on what public policy analysts and economists say about the fiscal effect that it has on state and local governments. The future may lie in Californians and the trust they have for elected officials. When the trust comes back, maybe the money will too.