A 30-Year-Old Can of Worms

California Crackup cover imageNow that he’s back in the Governor’s office, Jerry Brown will have to revisit an issue he championed 30 years ago, but is now a major source of California’s budget woes: Proposition 13. In a recent story about Brown’s return to office, the New York Times interviewed Joe Mathews, co-author of California Crackup, on how the state will drive revenue to local governments, which have struggled financially ever since Prop 13 capped property taxes at 1 percent and required a two-thirds vote by the Legislature to raise taxes. Brown’s proposed plan to give local governments more authority to raise taxes to pay for their own programs makes Mathews hopeful. “The optimist in me thinks [Brown] is doing this as a way to open up the can of worms,” Mathews told the Times. “This is the politically wisest and politically easiest way to unwind this monstrous system. Everyone likes local government.”

In a recent editorial for The California Fix entitled “The road to budget hell,” Mathews’ co-author Mark Paul wrote about the “four big pieces that paved the road to budget damnation” and what makes this year’s fiscal crisis different from years past. Paul points out that it wasn’t simply the lost tax revenue that made Prop 13 so damaging, but the way it transformed how California governs itself. “Compared to other states, California local governments spend more than average, despite local revenues much lower than average,” he says. “The state has made up the difference, deepening its own budget problems and… skewing priorities.” Mathews and Paul will be watching closely to see how Brown untangles this mess. Stay up to date by visiting their website, www.californiacrackup.com, or following them on Twitter, @CalifCrackup.