Proposition 13, Where Are You?

Remember the tax revolt that ushered in the age of Ronald Reagan: Proposition 13 in California. By a 2-1 margin, voters passed the measure under which property tax rates could not exceed 1% of the property’s market value and valuations couldn’t grow by more than 2% per year unless the property was sold.

Of course, that tax revolt infuriated the politicians because it limited their spending to fund their re-election wish list.

Today, several locales are facing a similar struggle over property taxes. Here, “ripped from the headlines,” are some examples.

• In Lake County, Ind., officials have reassessed property values. The result: property tax bills are nine to 10 times greater than last year’s, and some residents have been forced to take out loans to pay the taxman.
• Property valuations in Las Vegas have risen so fast that homeowners are looking at double-digit percentage increases in their taxes. Fortunately, some lawmakers are pushing a Prop. 13-type amendment to the state constitution, and most observers say it has a reasonable chance of passing.
• In Warrick County, Ind., property taxes are rising, despite a cut in the rates. That’s because a state subsidy of property taxes has been cut. So, though many residents’ tax rates have dropped, their out-of-pocket payments will go up.

And in Greenland, N.H., a country club fought city hall and won in a property tax battle. The club and the town agreed in 1991 on a discretionary easement for the club. But the town later decided to assess the 18 holes separately as “improvements to the property.” Each hole’s assessed value? $125,000. A court ruled against the town, and now it must reimburse the club more than $100,000.

If the politicians can’t raise income taxes, they’ll turn to property owners – anything to raise government revenue, and therefore government spending.

Can anyone say Proposition 13?