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With state facing $20 billion deficit, Proposition 13 critics emerge

With the state budget deficit threatening to climb to an astonishing $20 billion, one starts to hear rumblings about repealing Proposition 13, the 1978 initiative that placed a cap on annual tax increases and put a stop to people being driven from their homes by rapidly rising taxes.

First, let’s get one thing clear: The state budget is bigger than it has ever been. Proposition 13 allows taxes to increase 1 percent annually. And when homes are sold, they are taxed at the new higher value, which is why property tax income has increased nicely over the years.

One of the more curious notions is to repeal Proposition 13 limits only on commercial real estate, thinking – one guesses – those big, bad owners and investors can pay.

There’s just one problem, a huge share of commercial real estate is owned by small business owners, the same people who support local schools and nonprofits and live in our neighborhoods.

Besides, the notion that businesses would just absorb the higher taxes is naive. The costs would almost assuredly just be passed to consumers.

The state budget deficit is the result of a boom and bust tax structure, with the treasury flush during good economic times and broke when the economy slows.

And the deficit is the result of a complete breakdown of spending restraint.

Proposition 13 shouldn’t get the blame.

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A follow up: Last week this space lent its support to the Santa Rosa school board for its decision to pay Superintendent Sharon Riddell $25,000 to stay on, the same amount or less than it would have cost to find her replacement.

She could have kept the money, but her decision to turn down the payment last week was a laudable gesture of goodwill during a time of budget cuts.

All in all, it was the best outcome to a difficult situation.