Do we need a national Proposition 13?
“Prop 13,” as it was known, was enacted in California in June 1978 — about 30 years ago. The legislation limited property taxes to 1 percent of the full value of the property.
Perhaps more importantly, it initiated a tax reform movement in the U.S. The grandchild of that movement may now be emerging.
Property taxes are ad valorem taxes paid on real estate or real property. While some state governments have property taxes, the vast majority of property-tax revenue goes to local governments such as cities, which is then used primarily for funding public education.
Up until the past year or so, real estate values have been rising through the roof, especially in some parts of the country. Those increase have created a revenue boon for many cities.
For example, the Tax Foundation reports that between 2002 and 2004, property-tax collections rose significantly faster than wages.
| Year | Change in Income | Change in Property Tax Collections |
| 2002 | 2.02% | 5.88% |
| 2003 | 2.19% | 6.27% |
| 2004 | 4.66% | 7.27% |
And the Wall Street Journal reports that home values rose by 1 percent last year, while property collections when up by 7 percent. The Journal also claims that Florida’s statewide property-tax revenue went up by 50 percent between 2003 and 2006.
Voters’ property taxes go up every year, by more than they made, but the public schools don’t appear to be getting appreciably better.
As a result, there is a growing backlash among voters — especially in Florida, Minnesota, Virginia, New Jersey and Arizona — who seem to think enough is enough.
Prop 13 put tax reform on the national agenda two years before the 1980 elections that ushered in the presidency of Ronald Reagan, the tax reformer.
For our part, we hope the rising popular opposition to the property-tax explosion will once again propel a principled politician to put tax reform on the national agenda.