Thursday, February 11, 2010

Jarvis' California: Here you go...and go

REMEMBER HAROLD JARVIS? Hmmm...let's see. Harold Jarvis. Harold Jarvis. Was he one of the special effects in "Avatar"? Or maybe in the movie "Finding Shangri-La"? OK, that's awfully close. For those of you who loathe guessing games, I will tell you that Harold Jarvis was the brilliant conservative anti-tax guy who got the California voters in 1978 to pass a constitutional amendment to put a heavy lid on property taxes. It became widely famous as Proposition 13 and California hasn't been the same ever since.

Indeed, its financial misery, which is wiping out great chunks of the educational system as well as other tax- supported state services, has reached beyond a crises. Carly Fiorina (nee Cara Carlton Sneed), a Republican candidate for the U.S. Senate, has now gone so far as to conclude that the state should declare bankruptcy. Her understanding of the law reveals still one more flaw in her judgment, an ailment that got her booted out as Hewlett-Packard's top executive in 2005. Lest we forget: she was an economic advisor to John McCain in the last campaign.

The reality is that California is prohibited by federal law from declaring bankruptcy, which Fiorina describes as a mere technicality. At the same time, the state would find it quite difficult to change the picture. It would take a two-thirds vote in both houses of the legislature. A family source in California told me yesterday that, even the mere whisper that the system ought to change would mean sudden death - with no overtime - to the heretical politician.

Time magazine once observed that Prop 13 was so beloved that it "ignited the Reagan Revolution and the conservative era" - an unconditional stranglehold that is a fixture in the Republican delegation on Capitol Hill as well as with their ideological brethren in legislatures across the country. (In this context, Ohio gubernatorial candidate John Kasich's pledge to eliminate the state income tax is, to put it kindly, reckless political rhetoric.)

No matter that Jarvis' ill-conceived anti-tax curse on California has managed to haunt the state for 32 years, draining billions upon billions from that state's needs to serve its citizens. Even local governments were denied an opportunity to make up their losses, if possible. Want to know how inequitably drastic the effect? People who owned a home before Prop 13 were guaranteed a tax freeze forever. Pre-Prop tax on a ($700,000) home might be $600. A Post-Prop tax on a similar home next door that was purchased later without the amendment's protection: $10,000.

Fiorina: Meet Jarvis. Anybody else might want to take off for Hilton's Shangri-La . They say it's a peaceful paradise.



PJJinOregon said...

Prop 13 in California and, later, Measure 5 here in Oregon both implement the plan to "starve the beast." The authors of these measures don't want to eliminate services - they want to privatize them. Their goal is to remove government services and replace them with private, market based services. And you thought the banking meltdown hurt the country. Caveat emptor.

Anonymous said...

You have got to be kidding me. The reason California has such massive budget defecits is because their taxes are too low?!?!?!?!? California already has some of the highest individual income taxes, corporate income taxes, and sales taxes in the entire country. How much more do you want to drain from the private sector?

It is no coincidence that the low tax, low spending states such as Texas are in far better shape fiscally than the more free spending blue states. And people wonder why moderates and independents are fleeing the Democratic party.

Grumpy Abe said...

Don't get too attached to Texas, sir. Governor Perry is talking secession. Do you think he's kidding?