HomeMy WebLinkAboutExhibit 2•
Proposition 13: Some
Unintended Consequences
Jeffrey I. Chapman
Public
Policy
Institute of
California
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Preface
The Public Policy Institute of California commissioned this paper to provide an overview of
Proposition 13 and to motivate discussion of this initiative at the Tenth Annual Envisioning
California Conference. The author, Jeffrey I. Chapman, is a Professor of Public Administration in
the School of Policy, Planning, and Development at the University of Southern California. This
paper discusses the consequences of an initiative that may well be one of the most significant to be
passed in the history of the state. The paper reflects Professor Chapman's deep knowledge of the
subject and also presents his views about appropriate directions for policy. We believe it will
stimulate useful debate on the consequences of Proposition 13 and future policy directions. At the
same time, we should note that the views expressed in the paper are the author's and do not represent
positions taken by the Institute. PPIC's ongoing body of research in governance and public finance is
establishing an empirical basis for addressing many of the issues raised here. As in all of our work, we
aim to do so in a way that is consistent with PPIC's nonpartisan status.
Contents
Preface
Acknowledgments v
1. INTRODUCTION I
2. THE ADOPTION AND IMPLEMENTATION OF
PROPOSITION 13: A CHRONOLOGY
The Adoption of Proposition 13
implementing a New State -Local Finance System
The Changing World of City and County Finance 6
Counties 6
Cities
3, SOME UNANTICIPATED CONSEQUENCES OF 11
PROPOSITION 13 11
Consequence Number One: The Fiscalization of Land Use The Sales Tax and Land Use Choices 11
1 1
Redevelopment as a Municipal Revenue Generator
2
Development Fees: internalizing the Costs of Public Capital and Services13
Consequence Number Two: The Growth of Arcane Finance Techniques 15
Assembly Bill 8 and the Allocation of Property Tax 15
15
Education Finance 1 6
Financing Capital Facilities 18
Assessment Districts 19
Entrepreneurial Activities
Consequence Number Three: Increase in State Control aver County Finance 21
Control of the Property Tax 221
Sorting Out the State -County Relationship
4. CONCLUSION: DEALING WITH THE UNINTENDED CONSEQUENCES 25
Public Policy Reform Agenda Dealing with the Fiscalization of Land Use 25
26
Arcane Finance Questions and Options 26
State -Local Finance Questions and Options 26
Policy Research Agenda
Bibliography 29
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Acknowledgments
This work was funded by the Public Policy institute of California and uses some previous work
funded by the Lincoln institute of Land Policy. The author wishes to thank the many people at
PPIC for their comments and suggestions. In particular the author would like to thank Fred Silva,
Joyce Peterson, Mark Baldassare, Paul Lewis, and Michael Dardia at PPIC, Marianne O'Malley of the
Legislative Analyst's Office, Peter Detwiler, Consultant to the Senate Local Government Committee,
and Tim Hodson, Executive Director, Center for California Studies, California State University,
Sacramento, for their incisive comments. Any errors, of course, are attributable to the author.
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