We study the effects of California’s tax and expenditure limitations, especially Proposition 13. We ﬁnd that Proposition 13 was indeed effective at reducing both ad valorem property taxes per capita and total state and local taxes per capita, at least in the short run. We further argue that there have been unintended second- ary effects that have resulted in an increased tax burden, undermining the aims of Proposition 13. To circumvent the limits imposed by Proposition 13, the state has drastically increased nonguaranteed debt, has privatized the public ﬁsc, and has devolved the authority to lay and collect taxes and to spend the proceeds so gained. The devolution of authority has been among the swiftest growing aspects of government ﬁnance in California, to a far greater extent than in other states. Lastly, we argue that the new tax and spending authorities that have been created to circumvent Proposition 13 have led to a reduction in government transparency and accountability and pose an increasing threat to our democracy.
Colin H. McCubbins & Mathew D. McCubbins, Proposition 13 and the California Fiscal Shell Game, 2 California Journal of Politics and Policy 1-27 (2010)
Library of Congress Subject Headings
Tax expenditures, Taxation, California, Tax expenditures--Law and legislation, Real property tax, Tax collection