Dear editor:

The fact that California’s K-12 schools rank among the bottom 10 should be a rallying cry to all concerned citizens, but Jim Larimer’s blaming of Proposition 13 for California’s education woes is off base. California had the eighth-highest tax burden per capita in the nation in 2018, according to the Tax Foundation; over $7,000 per person! The problem is that this state has not broadened the school funding sources.

The question is why isn’t a larger percentage of taxes going to public education? In a state that has some of the highest building costs and some of the most burdensome regulations in the nation, is it surprising that home values have soared? Proposition 13 protects homeowners from this government-induced housing inflation.

The two questions that legislators need to ask are how much revenue is necessary for education and other state programs, and what is the most equitable method of collecting taxes? Is it equitable for homeowners to pay 6 percent more every year for property taxes? How many Californians have seen a 6 percent annual increase in their incomes since 1976? Does Mr. Larimer want homeowners who do not have the income to pay the tens of thousands of dollars in additional property taxes to sell their homes to very rich people and move out of state?

Proposition 13 is not a subsidy because taxing wealth is neither equitable nor efficient. Governments do not tax the increase in your stock market portfolio every year; however, they tax the income you receive when you sell it. Similarly, the government taxes the income you receive when you sell your house. California is in the top 10 in state tax collections, so get your legislators to make it a priority to also bring education funding and achievement into the top 10.

Les Deman

Half Moon Bay

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(1) comment

Jim Larimer

Les Demand agrees that California’s K-12 schools have fallen to the bottom in performance and that this is an issue for our concern. Public schools before Prop. 13 were primarily funded by property taxes. Mr. Demand does not dispute that Prop. 13 has significantly reduced property tax revenues.

Inflation measured by the cost-of-living index has increased annually by 3.5%. Today it takes $4.70 to buy what $1.00 purchased in 1976, the year Prop. 13 took effect. For every dollar paid in property taxes in 1976, the equivalent tax paid today is $2.44. That is a factor of two difference, property tax revenues have been cut in half relative to the cost of operating schools. Operating schools track the ordinary rate of inflation.

Mr. Demand claims that Prop. 13 protects homeowner wealth because a tax on wealth is “neither equitable nor efficient.” Property ownership for most Americans is the largest single asset of their personal wealth. Fourteen of the fifteen US states in 1796 funded government with a property tax, a tax on wealth. Taxes on wealth are not new or novel.

Most taxes are taxes on wealth. Income is wealth and it is taxed. Goods are assets, elements of wealth, and they are taxed when you buy them. Only taxes on services or fees for permits like a fishing license, would not be a tax directly related to wealth.

Perhaps what Mr. Demand meant to imply about equity and efficiency referred to the tax rate and not the idea of taxing wealth. What he has not revealed is why he thinks that the property taxes should shrink annually relative to ordinary inflation, the cost-of-living increases.

Our schools have been forced to reduce their budgets annually relative to the cost of operating schools. This caused California K-12 schools to go from the very top in performance to the very bottom. The reason school budgets have been forced to shrink is the revenue limits imposed by Prop. 13.

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