No sooner had the new Democratic supermajorities in the state Legislature been sworn in than some members began pushing to make the least fair of all taxes easier to impose.
That is the parcel tax, the response of many California school districts to the 40-year-old Serrano v. Priest court decision that attempts to equalize per-student spending among all schools.
Serrano mandates that every time a property tax-increasing override for schools is approved by local voters, most of the money goes to Sacramento for redistribution to districts whose per-student spending is in the lower half within California. The bulk of that cash usually goes to poor rural schools.
You Are Penalized
For decades, this has discouraged school districts in wealthier areas from seeking tax overrides. Why exert the effort needed to get a two-thirds vote when you won’t see much of the money even if you win?
Their answer for the last 20 years has been the parcel tax, the least equitable levy in America today. Schools officials love parcel taxes, no matter how unfair, because all the money they produce stays home. The end, they’re in effect saying, justifies the means.
Why are parcel taxes unfair? Because they have nothing to do with the value or use of any particular property. Parcel taxes assess owners an identical sum for each property they possess. That means the tax on a small one- or two-bedroom cottage is identical to the levy on a luxury hotel or a large shopping mall. The owner of a 33,000 square foot mansion pays the same as the owner of a property one-twentieth as large.
While it is true some malls, car dealerships, factories, oil refineries and other large enterprises encompass more than one property parcel, that doesn’t make this tax fair. The few efforts to make things a tad more equitable by charging owners of commercial properties slightly more than residential have been rebuffed lately by a state appeals court.
How Parcel Taxes Differ
What’s more, parcel taxes are unlike the other significant form of uniform tax per property, the assessment district. There, no levy can be charged without the consent of a majority of owners of affected properties. But with a parcel tax, ownership doesn’t matter. Voters who don’t own property and may never be owners can impose a tax on everyone who does own land or buildings. A tax they’ll never have to pay, but others must.
The irony today is that the lawmakers sponsoring plans to ease passage of these most regressive of taxes are Democrats who style themselves champions of fairness and equality.
The positive part of this is that legislators themselves can’t pass a parcel tax, other than a statewide one. Nor can they change the rules by themselves. They can present voters with ballot propositions aimed at making passage of unfair taxes far easier.
Under terms of the 1978 Prop. 13, it takes a two-thirds majority to pass parcel taxes today. State Sen. Mark Leno of San Francisco is working to put a proposition onto the November 2014 ballot that would lower that threshold to 55 percent of the vote. His idea is similar to the year-2000 Prop. 39, which lowered the margin needed for approval of school construction bonds from two-thirds to 55 percent. Before Prop. 39, 60 percent of school bond proposals passed; since then, such plans have had an 80 percent success rate.
Similarly, state Sen. Lois Wolk of Davis says she will push for another proposition lowering the threshold for passage of parcel taxes and bonds for public libraries from two-thirds to 55 percent.
In both cases, there’ i little doubt about the need. Schools have cut back programs from busing to college counseling, while many libraries have closed or reduced hours of service.
Need for a public service, however, does not justify an unfair, inequitable method of taxation like parcel taxes. To be fair, any levy on property must take value and uses into account; parcel taxes do not.
Until Democrats won majorities of two-thirds or more in both legislative houses, it was impossible to get these proposals onto the ballot because of unified opposition from Republicans. That’s irrelevant today; the only real questions are whether Democrats will unify behind these planned propositions and whether Gov. Brown would okay them.
If voters pass those propositions – a simple majority is all it would take – can lowered thresholds for other parcel taxes to pay for fire protection, police, sewers and more be far behind?
If the public believes all these types of services need more money, there are other ways to raise it, methods far more fair. No one forces a Serrano-like redistribution of ordinary property taxes earmarked for libraries or police, to name just two.
The bottom line is that financing of public services must be done fairly, without favoring the wealthy, as parcel taxes do. Even if finding a fair method is more difficult than passing a parcel tax.
Mr. Elias may be contacted at tdelias@aol.com. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, see www.californiafocus.net
