Prop 13 was legally challenged over 25 years ago and the case went all the way to the US Supreme Court and lost. The court’s main rationale for their decision was that the disparity in tax treatment between earlier owners and later owners (as a byproduct of Prop 13) did not violate the equal protection clause. But the opinion talked in circles, essentially implying that the earlier (prior to 1978) owners relied on a “predictable” tax bill when they purchased their properties. However, nothing could be further from the truth. Throughout history, CA property owners HOPED their properties would increase in value and gave no thought to increased assessments at the time of purchase or any other time. Prop 13 was not even on the radar screen! The opinion also stated that later owners (who purchased post-1978) already knew what they would be getting into (as far as their property’s assessment floor being initially set at their purchase price and increasing 2% annually) before they decided to buy. It stated, in essence, “If this group didn’t like the rules, they could choose not to buy.”
The lengthy dissent by Justice Stevens is very telling. Covering every single nuance of Prop 13, he discusses all the (faulty) rationale used by the court to uphold it. He missed absolutely nothing about this “statutory scheme” . . . he understood every single detail and ramification of it. He even referred to CA property owners prior to 1978 as “squires” (those existing owners at the time the measure was passed).
See “Aftermath” beginning at “Negative Effects” and then “Analysis” in the wiki page below.
Gov Jerry Brown was at the helm when Prop 13 was passed and fully realized (then and now) the long term ramifications of the measure. Immediately after his (re)election to the same post (over 30 years later), he stated:
“Proposition 13, because it took away the power of counties to tax, for the most part, it sent the decisions up to Sacramento. So we want to redistribute all that,” Brown said Tuesday.
Brown made clear Tuesday he was not blaming the state’s current problems on Proposition 13. But, he said, the decisions made by state lawmakers in the wake of Proposition 13’s passage have created an untenable situation.
“It was what the Legislature did after 13,” Brown said. Proposition 13 was not the problem, “it was what happened after 13 was passed.”
