STEPHEN MOORE: Another Proposition 13 Tax Revolt May Be Right Around The Corner

Anyone old enough to have lived through the mayhem and economic decline of the 1970s probably will recall the Tax Cut Heard Round the World. That was the famous California ballot initiative Proposition 13 that slashed property taxes by more than 25% and then screwed on a tight cap on future rate increases.

This was the tax cut that saved California and helped ignite the go-go days of Silicon Valley and build what are now trillion-dollar companies. This was also the dawning of the Reagan era with lower tax rates, the conquering of runaway inflation and skepticism of big government at the state and local level.

Once Prop 13 passed in California a dozen more states slashed out-of-control property tax levies that were driving older Americans out of their homes. Sell the house to pay the taxes was a routine occurrence.

Now, even CNN reports “another property tax revolt is brewing.” Why? Because nationwide, property tax collections went up nearly 7% last year, easily outstripping inflation. Over the past five years property taxes are on average up 27%. Not only are soaring property values squeezing many people out of the housing market once again, but the accompanying tax increases are squeezing many families and retirees.

One of the major voices that is driving this upheaval is Arthur Laffer – the same economist who played a big part in the Proposition 13 tax revolt. “Almost everyone in both parties was against us back then,” Laffer recalls of Prop 13. “No one saw the tidal wave coming. But we won with more than 60% of the vote.” The tax cut “really came just in time to save California.”

Now Laffer is working in nearly a dozen states to cap property tax tyranny.

He’s already succeeding. Last year, voters in nine states approved referendums to cap or curb rising assessments, from tying bills to inflation in Georgia and New Mexico to expanding tax exemptions in Colorado. Florida Gov. Ron DeSantis is exploring a ballot measure to curb property taxes. It would be accompanied by state audits into how spendthrift local governments overcharge for roads, school construction and parks. Other measures may appear next year on the ballot in Colorado, Georgia, Michigan, North Dakota and Ohio. The Ohio measure would eliminate property taxes altogether.

The states with the highest property taxes are New Jersey, Illinois, Connecticut, and New York. New Hampshire has high property taxes, but that’s in part because the state has no income tax. What is New Jersey and New York’s excuse?

Anger over property taxes is especially strong in Blue States, and one reason those taxes stay high is that these are all states that deny citizens the right to put tax limits on the ballot. Citizen initiative and referendum rights should be expanded to all states.

The special interests in state capitals fight ferociously against property tax relief. The teacher unions say that the cuts will drain the schools of money, cause potholes in the roads, library closures, and less fire and police protection. These are the same stale and discredited arguments that were made against Proposition 13, and real-world events proved these blow-hard predictions to be false.

Over the past decade nearly 5 million Americans have moved from high-tax blue states to low-tax red states. If the blue states don’t start reducing their tax burdens, that outflow could turn into a stampede.

Stephen Moore is a senior fellow at the Heritage Foundation and a co-founder of Unleash Prosperity. His latest book is: “The Trump Economic Miracle.”

 The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

(Featured Image Media Credit: Screen Capture/CSPAN)