In my quest to better understand that life form known as Homo Republicanus I am repeatedly struck by that species’ revulsion to anything having to do with the State of California. But that being said I have noticed that members of this tribe — who can be readily identified by putting “Don’t California My Texas” bumper stickers on their vehicles — tend to demonstrate some decidedly California-like behavior when it comes to politics.
To set the stage for this I have to tell you that I argued against Proposition 4 (which passed). I realize now that a better argument would have been to compare it to a similar measure that passed in California back in 1978. My thesis for this column is the idea that Texas in 2019 is a lot like California was in 1978 and I think there are a few lessons we can learn from this comparison.
To set the stage it will be noted that California was experiencing rapid population and economic growth in the early ’70s but, like the rest of the country, there was also a rapid inflationary cycle driving prices up for everything from basic consumer goods to housing. Texas today is also experiencing the population and economic growth that California had but the inflationary cycle of the 1970s has been substituted with wage stagnation which, for all intents and purposes with regards to your bank account, is basically the same thing.
The 1960s and early ’70s also saw the birth of a political career that would have vast implications for the Republican Party and how that party would frame the relationship between the individual/taxpayer and the government for years to come. Ladies and gentlemen — meet Ronald Reagan.
Now whereas Reagan had campaigned for Barry Goldwater on the basis of hardcore conservative ideology, he did some decidedly un-Republican things by today’s standards once elected to the governorship: legalizing abortion, raising taxes and revoking the right to openly carry firearms. Naturally, the powers that be who put him in office supported a recall election to get him out. On that basis his second term saw a metamorphosis where Ronnie laid the groundwork for what came to known as Proposition 13. Prop 13 went on the ballot shortly after Reagan left office. It passed into law over the objections of Jerry Brown — a Democrat who was also known as being a fiscal conservative. Reagan went into national politics as the taxpayer’s champion. Jerry Brown had to clean up the mess.
Prop 13 limited property taxes in California to 1% of assessed values and indexed any increase to the rate of inflation. On this basis the state lost out on over half a trillion dollars in funding on property taxes since Prop 13 went into law. I’m sure that sounds like a great idea to all of you who recently received your tax bills from the county. But here’s the bad news — which can more objectively be labeled as a “fact” — things cost money.
Because “facts” are as much of an anathema to Homo Republicanus as California is let me spell this out for you. Firstly we’ll take a look at the idea that government should be run “like a business.” I will point out that whereas a business seeks to maximize profits, a government’s purpose is to provide services. Yes, some of the methods for achieving these goals are similar but they are two different goals.
Prop 13’s effects favored the established property-owning class at the expense of everybody else. The growth of the state economy slowed, housing prices soared, the quality of public education faltered, etc. The state income tax had to be raised and a host of new taxes had to be introduced to make up for the shortfall. As usual, Democrats got the blame for doing the responsible thing.
Whether the funds come from income tax, property tax, sales tax or whatever in the end the funds just have to be there — or you can adopt the Homo Republicanus economic theory and mortgage your grandchildren. And, no, I don’t like paying any more than absolutely necessary but I believe that paying my fair share is as much of a privilege as it is a duty.
I can guarantee you that some business group is going to challenge the state franchise tax based on the new wording in Prop 4 — my over/under on this is within 18 months. But don’t worry. We can always take another lesson from the GOP manual on economic theory and do what we always do to balance the budget — give education the shaft! Mark my words. It’s going to happen.