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Post-Proposition 13 revenue-raising strategies

Thanks Jan for suggestion this article on How We Pay For Growth.

On June 6, 1978, the voters of California passed Proposition 13, a citizen initiative that cut property taxes by more than half. The original intent was to reduce the size of government by controlling the amount of property tax levy. "But it is not the basic impulse of government to cut its own size," or as I like to argue, nor do governments have the capacity to "do something for nothing." Since then, "local government agencies throughout the state have gone into survival mode in two different ways."

"First, they have intensified their competition with one another for the revenue sources available." According to the report, the revenue competition has led to the plethora of outlet malls, entertainment retail centers, and regional malls, and even "the boomlet in the creation of new cities" in the last twenty years.

"Second, they have been endlessly inventive in finding new sources of revenue that are not subject to Prop. 13's limitations." Those "post-Proposition 13 revenue-raising strategies" include parcel taxes, Mello-Roos taxes, development impact fees, or special assessment districts.


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Hubert H. Humphrey Institute of Public Affairs