Jarvis vs. Sumner Special: A Debate on Proposition 13
KOCO TV channel 50 now presents a special program for public television on what has become the most important issue before voters in the June primary election. Proposition 13 with the tax limitation constitutional amendment. Today's program presents Howard Jarvis co-author of the amendment and Superior Court Judge Bruce Sumner who opposes it now. Here's host Jim Cooper the Jarvis Gahn initiative constitutional amendment proposal has clearly emerged as the most important issue in the June 6th primary election. It has evoked more debate and more bitter arguments than any other ballot issue in the past 10 years. Voters should examine it carefully because it proposes to change the California state constitution and such changes are usually lasting ones. Supporters angered by rising taxes and the failure of the state legislature to deal with the problem say this is the right way to give relief to property owners and to cut government spending. Opponents say that they
care about rising taxes too but that the Jarvis initiative is the wrong way to solve the problem. They say it will cause chaos because of layoffs and drastic cutbacks in schools. Counties and cities. Today we have two major combatants in the continuing debate over the Jarvis initiative. Each will be asked to give a two minute overview of his position then each will be given a two minute rebuttal. After that we will ask each to come and without time limitations on some of the most hotly debated aspects of Proposition 13. Howard Jarvis was formerly the publisher of ten newspapers in Utah. He's lived in California since 1934 and engaged in an aircraft and appliance manufacturing business that grew to 13000 employees. Since 1962 he's been state chairman of the United organizations of taxpayers. He is co-author along with Howard again of Proposition 13. Bruce Sumner has been in Orange County Superior Court Judge since 1968. He served in the state legislature as an assemblyman from 19
56 to 1962. He holds three citations from the state legislature for work as chairman of the California Constitution revision commission. He led a statewide legal fight to have the Jarvis Gahn initiative declared unconstitutional and removed from the ballot. The jarv is again the amendment is only one page long. 442 words and all. It's been estimated that would cut taxes and tax revenues in California by $7 billion per year. A cutback of 58 percent. Those provisions can be very simply stated. It places a limit on all property taxes at 1 percent of the full cash value as shown on the 1975 76 tax bill. Second it allows for reassessment of property when it is sold and otherwise allows for a 2 percent increase in the fair market value each year. Third it would prohibit the state legislature from acting any new property taxes and require a two thirds vote of both
houses to enact any other kind of new taxation. Fourth it would prohibit any cities counties or special districts from enacting any new property taxes. It would allow other kinds of new local taxation. Only if two thirds of all the people who are registered to vote approve such taxation. Well first let's hear from Mr. Howard Jarvis for an opening statement on why voters should vote yes on Prop 13. Howard Well thank you very much Jim. Our purpose in sponsoring this amendment which was the is the fourth amendment we've sponsored in 15 years. We supported two by Philip Watson and one by Governor Reagan. And the purpose of this amendment is number one to reduce the amount of money that government takes in in taxes because we think the only way you can cut spending is to not give them the money in the first place. The second objective of the amendment is to enable elderly people on limited incomes which there are three or four million in this state
to be able to retain the homes that they have bought and paid for and who are in serious danger today because of the rapidly escalating property taxes of losing their homes. For instance a Los Angeles County Assessor announced just recently there's going to be a 50 to 100 percent property tax rates and lasagnas copy this year. Now this would force a great many people out of their homes. The second thing that we're endeavoring to do is to take the squeeze off the middle class. A great many people in the middle class are buying and paying for homes they've budgeted the principal on the interest and the beginning of property tax which are known as impounds they paid to the banks of the savings and loan. And those impounds have gone up very rapidly. And this amendment will cut those income payments for taxes. Two thirds. The third thing we want. We've wanted to do something to try make it possible for young people to buy a home in California. They can't do it today because 90 percent of them can't qualify because
of the excessive property tax. So we want a fair amendment an equal amount and one with the within the ability of the taxpayers to pay and that is the reason we have this proposition on the ballot that one million five hundred thousand Californians signed. Thank you very much Mr. Jarvis. Judge Sumner will you talk on why should voters vote no on Prop 13. Voters should vote no on Proposition 13 because of the provisions of Proposition 13 not because of the problem that exists as far as our tax structure is concerned. It's an interesting thing that the opponents of the measure want to talk about what their provisions are of Proposition 13 or the proponents continue to describe the problem. Proposition 13 would put an entire new article in our state Constitution dealing not only with property taxes but with taxation of all kinds and also with the right of the people at the local level
to have representative government and the right of the people in the legislature to have majority rule. The most important provisions of Proposition 13 in my opinion are those that take from local government the power to deal with local problems. It's an irony that the proponents of Proposition 13 seem to trust the members of the state legislature more than they trust the members of their of the city councils and and boards of supervisors. Why do I say this. Because if a city chooses to deal with its own problems by raising taxes even a few dollars the question must be submitted to the people in the city and a two thirds vote of the registered voters must vote for the measure not a two thirds vote of those that turn out. But a two thirds vote of the registered voters. The net result there'll never be any more taxes voted at the local level what will
happen then government at the state level and the national level will deal with local problems. So if you want all of your local problems dealt with from Sacramento I assume you would be for 13 if you believe in local control you would be against it. Now it's rebuttal time. Mr. Jarvis what about you. Well I I think that I ought to say that for about 10 years now the league of California cities which is made up of city councilman the mayors all over the state and the State Board of Supervisors are made up of all the supervisors over the state have been testified in the state legislature that 96 percent of their present costs are already mandated by state and federal mandates. These are not my words these are. This is their testimony if that be true. Local government only has control over 40 percent of its money. The only opposition I've had that one supervisor in this county I think it was said No
they only controlled 80 percent was mandated. But that means we don't really have any local control. And so in this amendment to try to do something about that we have another clause that says that the taxes shall be collected by the counties as they are now and distributed within the counties to the various districts according to law. Now the law can only be written by the legislature and I think it requires the legislature to write some law. Now we don't think that we have any legal problems with this amendment at all. It has been one to Per your court judge has dismissed the case against it and twice the state Supreme Court has refused to hear the case. Now this is amendment by the people of California. The judge is right. It will put a permanent law into the Constitution of the state of California. And that's what we want because we don't want any longer elected politicians to make a unilateral decision with no discussion with the people who pay the taxes on these tax raisers. So what we're doing in our view is to turn the control
of government and taxation back to the people. Now in the city if they want a new tax that they can get that two thirds vote that they're not supposed to have the tax. And I I just think that this is not a reduction of the majority control. And I'll answer the rest of that in the next little rebuttal. All right. Time for your rebuttal. Good summer. Well first of all the provisions of Proposition 13 will in no way increase the ability of young people to buy homes. The fact of taxes is a it has nothing to do with the ability of people to buy homes. To be sure after you buy the home you may have to pay taxes and the housing starts in Orange County have increased dramatically this last year. Secondly as far as any mandated expenditures at the local level Mr. Jarvis is confusing the obligations of local government
to deal with local problems such as police and fire protection with a mandate that certain amounts be spent. My best evidence of that the truthfulness of that statement is the varying tax rates in different cities and different localities. Some areas have to spend a great deal for fire protection because of fire hazards. Others do not. Some areas choose to develop parks and choose to engage in extensive library programs and other programs other areas do not. This is what local control is all about. Now the actual mandate at the local level runs somewhere around 65 percent. And this is of course state mandated programs for welfare and things of that nature. But local expenditures are controlled at the local level. That's what it's all about. And again we'd recently have read that different cities have chosen to take different approaches for example just this last week we read that the city of Manhattan Beach apparently has decided to use a different form of taxation. This was
decided by the elected representatives of that local community. After the passage of Proposition 13 if it does pass they will not have the power to make that decision. It will have to be done in Sacramento or by a two thirds vote of the entire registered voters. And that's impossible. All right gentlemen I'm going to mention some issues that have been the most frequently debated and most hotly contested issues in Jarvis and certainly the top of this list is the clash that continually goes on the dialogue continually goes on by the people who want Jarvis say that it won't be too drastic of a cut back. And by the opponents of the Jarvis Amendment who say it will be a terribly drastic cutback. So I'm going to read something I'm going to ask you both to react to this and it comes in two sectors the school sector and the other sector. Now we've researched that and found that California has 1047 school districts 1047. Here's
what Wilson Ryle's says. Who is the boss of all those school districts in the sense that he is the state superintendent of schools. The proposition passes it would be the most disastrous thing ever to happen to California education. The measure would result in a $2.5 billion cut in the $7 billion budget for the elementary and secondary schools all throughout California. Quote This would mean handing a 38 percent average cut back in education. I'll say that again this would mean handling a 38 percent average cutback in education. You can't do that by counting paper clips or pencils. It would mean cutting out programs increasing class size in short decimating education. Now the second sector there are many big headlines just last week in L.A. And of course we all know there are 58 counties. So let's just take one of them rather than burden both of you with going through many of them this was put out by a man by the name of Harry Harford who hold the title of chief administrative officer in Los Angeles County just this week. It has been presented to the supervisors.
He is saying that if Jarvis passes there will be a layoff of over thirty thousand employees in Los Angeles County alone. A 33 percent decrease will be required in the sheriff's department resulting in substantial curtailment of law enforcement services because of the program reductions a 71 percent decrease will be required and Fire Protection District. This is L.A. County. This will result in the elimination of all paramedic services and 51 of the deaths of the district's 88. Fire Station will be closed at forty four point six percent decrease will be required in health services this will result in closing of Olive View Harbert general Mira Loma and Long Beach hospitals and 57 health centers and sub centers. And in this very heavy book and I'm not going to burn it more. He also comes out with a statement there'll be ninety nine public libraries closed of varying size in one county alone. Now the question is are these facts or are these scare tactics. So let's start with Mr. Jarvis and respond to both of those the schools the cities and the counties.
Well in the first place what is in the employ of the Board of Supervisors and the second place this is an unpublished budget that no one can get to see in the third place and that budget is 25 times that uses the word dysfunction. And this is no official document whatsoever. And the Board of Supervisors after he submitted it said we have got to cut a billion and a half off of this budget. But I think the best answer is from Paul Prioleau and which he has secured an opinion from the Legislative Council that's incorporated and at the end of this property all is the minority leader of the land the Assembly and he says the plain fact is the big spenders and special interest groups that want to continue the status quo of supporting special privilege through government spending are using all sorts of scare tactics and creating all sorts of myths. In an effort to defeat Proposition 13 I repeat what I have said before the schools are not going to close. The police are not going to be fired.
The firefighters are not going to be dismissed and that community is not going to be left defenseless. Proposition 13 passes. And then he adds I hope that releasing this legislative councils report will restore some common sense and reason to the opposition debate on Proposition 13. The other thing that I would say when the when the attorney general of this state announced the other day that he was going to vote for this amendment. He said he did not think that it would adversely affect police our fire our schools in California. And that's a public statement made by a younger as the attorney general of the state of Georgia. I would just say he made that as a as a candidate for governor not as attorney general of the state because it you can start out with the old adage there's no such thing as a free lunch. You can't cut seven billion dollars out of the local revenues. You can't cut state wide 47 percent of the revenue that is received by schools and that's according to legislative analysts. And in
Orange County here it's two thirds of the revenue that is received by schools is received from property taxes. So if you cut property taxes drastically you are obviously 8 percent you are you are crippling the operation of the schools and there is no way that they can continue to function without funding. I'd like to comment on one thing and that is that it's been said that the state constitution requires that the legislature fund schools that is not true. The state constitution does provide that there is basic aid to schools and the amount of one hundred and twenty dollars for average daily attendance for students and it does provide for some equalization aid. But there is no requirement that the state legislature pass any laws concerning the financing of schools. And if there ever was. Certainly when you add a new article to the Constitution that takes away the present tax base
any responsibility is absolutely forgiven. So I don't know how local districts are going to function. Everyone that I've talked to that's involved in the police and fire protective responsibilities everyone that's involved in things like public libraries or the operation of school districts use this as an absolute disaster. What's going to happen. Sure. They'll probably be there'll be some police it's not as if tomorrow or the morning after it passes there'll be no police but the transfer of power will go to Sacramento. So if you want your police department run from Sacramento if you want your local planning department run from Sacramento if you want your libraries and your schools all more run from Sacramento than they are now. Why then I guess Proposition 13 is the answer. Well my answer in my immediate answer to that is they're all run from Sacramento now. Not so well then I kid you're going to have to say to me that all of the testimony
for 10 years by the League of California cities and the state association the board of supervisors is wrong. Now I don't have any better information they have. I can't make this statement myself. But I have the testimony and transcript for year after year. I would like to make a comment on schools. There is not a word in this amendment that says anything about schools. Not one word. And then second place they think that's going to determine the future of school finances is surrounded decision. The Serrano decision goes and is in effect and will go into effect in 1980 whether we ever have this amendment or not. Now this Serrano decision says that the state may no longer use the present property tax system and the money derived from it for schools after 1980. That's the time that the Supreme Court has said it goes and it doesn't say we may not use it. It says that the it says it says it the tax level has to be equal throughout the state. I understand that. But that doesn't say that you can't use property taxes to finance school.
I have never made the statement that you couldn't use property tax. Well it sounded like you just made it. Well you just didn't hear me. What I said Judge and I can play it back on the tape that the president property tax system as why TGM in the state of California violates the Equal Protection Clause of the 14th Amendment to the United States Constitution. Now that is superior to state law. Now there's no question that the that the plan is now in effect to create a statewide property tax of say six dollars or 100 take all the money to Sacramento and then have it distributed equally to every student in the state of California when the Serrano. But it will not meet the Equal Protection Clause of the 14th Amendment and the schools had better find out now that never again in the state of California will property taxes be available to schools. I think they're becoming to that. I think they're coming to that realization. How long before we leave that Mr. Jarvis. How then will the school be funded in your
judgment. Well it would only be my guess. Now I would like to add one thing Leon McCarthy who's the speaker of the assembly in the first debate with me on channel 2 last week finally admitted that the legislature was obligated to finance the schools in the amount of money that each district board district decide. Now my guess is because there's a little precedent for it. In 1935 they passed the Stuart Riley act in which they've put three cents and it was supposed it wasn't bound to be but it was supposed to be used for schools. They never used it for that. And my my thinking is that my best guess is that the state legislature will finance schools through a sales tax. So that's that's what I think. Now my judgment then is no better than anybody else. But before we leave this now I like to comment on what Speaker McCarthy said because I I watched the debate and that's certainly not the impression that I got. Well there when I said no it wasn't. There was a question that was asked concerning a provision of the Constitution and I think we ought to lay this to rest right now.
OK. August 13 Section 21. Right. Let's start with Section 20 or let's say from Section 20. Yes go ahead. I have read that all right fine. Can you read it to line. A short one line section 20 says the legislature may provide maximum property tax rates and binding limits for local government right then Section 21 starts right within such limits as May not required as may be provided under Section 20. The legislature shall provide for an annual Levy by county governing bodies of school districts sufficient to produce annual revenues for each district that the districts board determines are required for its schools and district functions. In other words the legislature first of all does not have to but may provide maximum property tax limits and then within those limits that it doesn't have to provide the. The legislature would provide for the income
but with Proposition 13 we have a constitutional limitation on the power of the legislature to set the maximum property tax breaks. Therefore this is if it does have any effect it's totally inoperative as a result of your amendment and to tell the people that because of a provision that you are changing as a result of Proposition 13 the schools are provided for is just. Well let me just them. You see one word judge in this. If this amendment the legislature shall know you you're talking about composition the board of equalization. I'm sorry I'm sorry here. All right. The legislature shall not May. Judge provide for an annual levels. Read the first sentence. What does this actually what it says may provided under Section 20. That's now Section 20 says this within the limits of section 2 the legislature may provide maximum maximum age. That's right. That's
right. That's right. They don't have to hear. So they don't have to do this either. Oh no I disagree with the judge that was this amendment that says shall provide is the law. Now I know there's been a disagreement on this but I know our attorneys and the attorney general says so. No the attorney general yesterday so I've ever heard. All right. I'll tell you we're never going to solve it. This might be a go to have to go to the Supreme Court for a decision on that. I don't think it have to go to the Supreme Court. There's just no question about it. We have a total disagreement. And even if you were right as to the wording of this provision even if you were right or proposition 13 changes no it doesn't because it changes the. Would you not agree that proposition 13 requires a two thirds vote. No no no changes what you mean by that. But he's right. It would it would prevent the state legislature from invoking any new property right. Is that right. However you don't have to do it or how well they don't have you support school. However on the other hand they could also use the full 1 percent for schools. I mean the sales tax and other property to all they could use then then then that would cut off other programs. Is that not
true. That is right now. There's no question in my mind about the meaning of that. And there's no question in my mind but the legislature is going to have to fund the schools from somewhere other than property. All right before we leave this I'm going to have to raise taxes right. I'd like to ask you before we go let's talk about what taxes they have to raise. Well we don't know. I don't judge it. I mean Mr. Jarvis has suggested he thinks it could be a sales tax. But let me before we leave this do you think Wilton Ryle's is lying to the people of California then when he says that there would be a 38 percent cutback in education or do you think he's being honest. I I. Well said. And Leo McCarthy who said I was lying about this on television. I didn't want to even dignify it with a reply. Wilson Ryle's is not an attorney. He's presiding over the worst school system in the history in the state of the United States today. Lou McCarthy is an opportunistic politician and he wants to retain the power that all he can now I
don't think they're lying. I just think they are stupid. I want to good. I think that's uncalled for. I don't care you they call me a liar. Well I don't think he's any more of a politician than you are. Well I'm not an office a politician a guy who gets his money from this from the taxpayer. But you're the one who is for the for. No I'm not a lobbyist and I am not a lobbyist where all the money's coming from. No it is not and that's an absolute false statement. The answer is No. All right Senator let me ask a question and I'll show you the record. Many people have said and people in Jarvis's have said that the schools are resorting to scare tactics by sending notices home by sending dismissal notices the teachers Mulet thing you think they're using scare tactics. I think they're relying on notifying teachers that immediately cut back. It's absolutely realistic and in fact in my this is just my personal view any any city county school district that doesn't prepare an alternative budget for the passage of this measure is really not acting in the best interest of their or the
people they represent because after the day after this measure passes if it passes they'll no longer have the power to present an alternative budget. The power then will go to Sacramento because by Proposition 13 it it's it's a measure to put power at the state and federal level. That's not to say I have to say that that the judge didn't answer the question but I asked him Do you think it's characterization. The question that I think you said what are the schools doing illegally and against the law. They are using taxpayer money for equipment supplies all kinds of propaganda on one side of a political issue. This is against the law of the state of California. Now as far as the budget is concerned the legislature ordered all of the cities and the schools to prepare another budget but it has nothing to do with their spending money and the police political use you take offense at that. Others sending dismissal those notices on to the dismissal notice. No I don't take offense at that Toby. But you don't want him notifying them. What I'm trying to say that they should run a big campaign scare tactics are
not on one side of any political problems because we're politicizing the schools which is the worst thing we could do. We have a number of issues here gentlemen and I want to move along to of them. This is a title and we'll try. Because we're going to have to move along them more rapidly and the rest of them. This is a title that has been dubbed. It's a nickname that had been leveled at this by Speaker McCarthy's speaker. McCarthy was right when he dubbed Proposition 13. This is from the Los Angeles Times on March 30th. He said Proposition 13 the apartment owner's enrichment act dry and the allegation is that it helps the renters helps the apartment owners and doesn't help the little guy. So my next question I'd like to hear you both address yourself. Does it help or hurt the renter. And let's start with Judge somebody. All right. The first thing is that this is a measure that as I have stated is being proposed by the apartment owners association in no way shape or form. I've never heard that nor was it ever discussed with them nor did they ever
write a word on it. And then the attention gathered they never put up a nickel and let me read the text of a letter to the apartment owners association from Howard Jarvis dated March 10th 1978 and where he's asking for money right and he says to win we must spend at least one third as much as our opponents. One million dollars and help us by sending your maximum contribution. And then he tells them how much to send. If you own two to five units I suggest a donation of $25 from five to 10 units. $50 would be appreciated 10 to 15 units demands a hundred dollars and then he goes on to say in addition convince your tenants that lower property taxes mean lower rents. Right. There's absolutely nothing in Proposition 13 that affects renters in any way other than to leave them out entirely. There is no provision in Proposition 13 for lowering rents. And it's just it's just sophistry to say that
it will in any way affect the current one or renters. Well in the first place are as much as I like the judge he's going to have to swallow those words. Why. Well I'll tell you in a minute. The next place the BEARUP bill provides 10 cents a day for the rent is 10 cents a day. And I think that was an attempt by the legislature to bribe the Rander for 10 cents a day to vote against their date. Well how much does Prop 13 have for the matter. You cannot write it into a constitution any phrase like that whatsoever. What what does that do. The way it is written in that the runners were going to get five dollars a month rent. Judge Some would have filed a suit that way that if they had more than one subject for yourself that question why don't you let me read it myself. The question now in the state of California there are a hundred and eighty five thousand apartment orders and they have the biggest investment in the state of California whether an industry they pay five times the taxes of the industry and they provide places to live at that at less expensive any other way
for 11 and a half million tenants in this state. So they have provided the biggest public service of any entity in the state of California. It's been very difficult for me to get an agreement out of a hundred and eighty five thousand owners because a lot of them are just as selfish and stink and as politicians a lot of and with their problems for us. But on the 11th of this month after a long blood sweat and tears we are going to announce a reduction in rent for tenants in this state and it's going to be published in large newspaper ads all over the state. And it's going to be a commitment but it's voluntary voluntarily. It's like everything else in a free country like everything you know when they had one judge on the bank saying don't they don't list how many cases he has to hire each to hear each day. All right. I'd like to move to a new area now. OK. We know that there's another proposition that's going to be on here. That gives people an alternative. Voters who wish
to lower their property taxes have another option in the June election. They can vote for Proposition 8. The bar bill the bar bill has already been passed by the legislature and signed by the governor. But in order for it to become law voters must pass Proposition 8. Proposition 8 would allow residential properties to be taxed at a lower rate than other property. However if Proposition 13 passes it will negate Proposition 8 even if Proposition 8 gets a majority vote. Well here's how Proposition 8 compares with Proposition 13 for the homeowner Proposition 8. Cuts taxes by 30 percent. Proposition 13 cuts taxes by 57 or 58 percent for commercial property. Prop 8 does nothing directly. Proposition 13 is the same as for homeowners for renters. Proposition 8 doubles the tax credit Proposition 13 does nothing directly impact on the state. Proposition 8 would be financed by a state surplus for four to five years. Proposition 13
would cut property tax revenues by seven billion dollars. That figure seven billion dollars has been estimated. Seventy eight billion dollars. OK so would you address yourselves on the voter who walks into that polling place on June 6th and have to decide what's he going to do about eight or 13. You start first first the most important question is what is he going to do about 13 Proposition 8. And I think it's important that we understand this is a very short constitutional amendment that provides that the legislature can. Set a different tax rate for homeowners as compared to owners of commercial property and other other owners. And pursuant to this in other words in anticipation of its passage the bear bill was passed Proposition 8 does these things that you've talked about but it's also important as to what it does not do. It does not take from city councils and from boards of supervisors and from school districts the rights to deal with local problems at the local level. It doesn't destroy
representative government at the local level. It doesn't take require that the legislature has to have a two thirds vote of each house which in my observation in the experience of most people let's watch the legislature is that that results in a lobby control of the legislature. So Proposition 8 is an alternative that the people have available if they choose to do so. Really the critical question is Proposition 13 because any changes that the legislature wants to make in the in Proposition 8 in the bear bill can be made in subsequent years. I know the opponents say well that's part of the bad part of it but and that can be modified can be modified by legislation as experience shows it's necessary. Are you saying then that you're favoring an 8 vote for Prop 8. Yes. Over. I personally am going to vote for it but I don't think that a person that some people could be opposed to both of them and that's fine. What I am here today to talk about is Proposition 13
because that is the critical measure. I think we should make it clear that if someone by conviction wants to have prop a path then they'd better know that they should vote no on 13 because 13 passes and it wipes out Prop 8 regardless baby wipes it out because it won't make any difference that you can have two different tax levels. Right. Because Proposition 13 establishes the tax level at 1 percent and the interest on $400 I think that's what all of us have that obligation to make clear to voters. How things work. I'd like could I say something to how things work. It is very important. And in our society in a republic such as ours or whether you call it a democracy or a republic how we do things is awfully important. That's the difference between our country and totalitarian countries. It's not just your tax bill. It's how we accomplish these things. And that is the critical issue in this whole discussion. Let's hear from Mr. Jarvis now about voters who walk in that are only in place and they've got to decide eight or 13 but I hope they all vote no on 1 2 and 8
1 and 2 are major bond issues that are on the ballot that proves the hypocrisy of the legislature to pretend that they're doing something for taxes and put two major bond issues on the ballot. Number one. Number two is the bare bill has now been abandoned and it's amended in 30000 words by an assembly by the name of Morri and on the back it says there were a number of oversights and errors in the bill and in order to effect effectively implement the programs by Senate bill number one that's the bar bill. It is necessary that this Act takes effect immediately. Now this is 30000 words of gobbledygook. Nobody has been able to understand the better bill and they had to make this major correction to it last week. Now the other thing about Proposition 8 that I think is a disaster for the state of California for 100 years the Constitution has provided that all property be taxed on the same basis. Residential commercial and Bert appraised tag
assets and tax on the same basis. So what the Proposition 8 is to give the legislature the authority to double the taxes if they want on all commercial property. In the state of California. Now when they do that and because no business pays any tax of any kind whatsoever. The Proposition 8 it sold won't be to raise all consumer product prices in the state of California. Now take it in Los Angeles County it gives a 30 percent only to owner occupied homes. However that's discriminatory. It gives a 30 percent property tax reduction but what Mr. Pope in Los Angeles County raises the assessed value. Seventy percent or 50 percent owner owner and still 20 percent behind the eight ball. And so this is a very bad bill deceptively written to really hoodwink hoodwink the public the state of California. I'd like to respond to that and read the text of Proposition 8 which is only one paragraph long it says the legislature may provide for the taxation of owner occupied
dwellings as defined by the legislature or any fraction of the value there of at a rate lower than that levied on other property. And then this is the critical point in no event may the tax rate levied on other property be increased as a result of lowering the tax rate levied on owner occupied buildings. So the intent and the text of Proposition 8 provides that it by giving owner occupied residence a 30 percent tax break. You may not pick up the loss by increasing taxes on a commercial property. That is part of the text. In fact that is the whole text of Proposition 8 that I just read to you. I think the explanation misstates it I think is a mistake entirely. Why. Because it says the legislature may not raise any other taxes for that specific purpose other than what they give to homes but they can raise it for any other
purpose in the world and any other purpose in the world. Yes. Now I'd like to direct this question on this to Judge Sumner right. Many people people who are even critics of Proposition 13 the Jarvis amendment such as governor Brown have said that the state legislature of this state has been so dilatory and so paralyzed in its legislative obligation to the people of California to institute property tax legislation that the state legislature itself is probably the biggest factor for putting the Prop 13 on the ballot even even getting a million people to sign for it. Is that an indictment against our system and against our legislative behavior for the last 10 years. Certainly that statement is an indictment. But the irony is that Proposition 13 gives the power to this legislature that you that critics say has been has failed has failed to act because it takes it away from the local level by taking away from city councils by taking away from boards of supervisors by taking away from school boards the power to do anything and forcing the decision to be made in the
legislature and then changing the rules in the legislature so that you can't reach a simple compromise by a majority vote. You've got to go to a two thirds vote. So if there is a problem with legislative I think there is a problem of legislative inaction that that has seen us fail to have that action for 10 years. I think for years there's no doubt that there has been very strong conflicts within the legislature is to just what should be done in the area of property tax relief. Personally I think that they should have done something simple some time ago. But I do know that they have worked at it that some measures have been passed contrary to what some of the proponents of Proposition 13 has said. But because there's been a problem in the legislature reaching a decision doesn't mean that you take away local governments power to deal with its problems at the city and county level that that mystifies me why that is the solution to legislative inaction. All right let's talk about legislative action. Do you as the author of co-author of
Jarvis can do you attribute that inaction that paralysis of the legislature to do something about property tax reductions something meaningful in the last 10 years as the biggest single impetus the fact that we were able to get it on the ballot. There is no question that not only the lack of action of the but the government at the legislative level but also at the local government level the insatiable appetite to raise taxes. There's no question I think Governor Brown said it and he's opposed it. I think he said it this morning. We were on Today show. He said if it hadn't been for Howard Jarvis and 13 I asked the governor would never have gotten a bill out of the legislature. Now you know last October when they get tried to prod the governor into call a special session to consider property taxes. He said that he didn't think it was an issue. I want to make one other point that we're trying to correct in this state which is disastrous. If let's say we have a district with 100
people in it and they have a bond issue for 10 million dollars under the law now if 70 of those hundred stay home and 30 vote and 60 vote yes and 14 vote no two votes puts a tax on the whole hundred. And I think that is the worst kind of unrepresentative government and discrimination that we have in this country. I'd like to respond to the judge's argument first of all right that the judge has made the case and that many people who are conservative and many people who are supporters of you are the first ones to say we want local control and home rule. You've heard those arguing right now. What about the indictment that the judge has said that your your legislation would by its very nature force any tax raising activity to come from the state legislature thereby removing it from the local government and putting it in the sacrament of the very people whom you have little confidence in. Well I don't have a confidence in much local government either. If you want to back home rule versus outsider I think that the thing that the judge said is is is
negated completely by the 10 year testimony of the cities and counties of this state I think is negated completely. And so they say we don't have any control now. Now I tried and I don't whether it will be successful or not. But honestly what I hope to do in that section that says the counties collect the money and distribute it I hope to try and improve the authority of local government. Now it is high because in the first place they have the right to collect the money. And it's in the Constitution and the legislature can take it away from them. Now unfortunately in this state and there's no other way as bad as it is that our legislature and they they're the only body that can enact laws to affect the entire state. You've got to put it somewhere and I don't like it. And I'll admit it. But would admit that you at least you admit the practical effect of 13 is going to be to put more power in Sacramento and less power. Well you see there's two arguments to that. Well I'm not sure that I will could I go that way let me answer that question. They say on one
side that I require a two thirds vote of the legislature and I tie up on the other side. They say the amendment puts more part of the legislature. I'd like to have that explained to. All right I'll be happy to explain it. Let's let's take an illustration. Let's assume that the city of Anaheim decides that because of the presence of Disneyland and the convention center and so on that they have to have increased police protection. Right. And therefore they're going to have to have some additional funds. And let's assume that they decide that they're going to do this by raising the tax on rental of motel rooms and tell rooms because those are the people that are helping to cause the problem. Right. The city council of City of Anaheim does not have that power and that's right. And third. Right. They've got to submit it to a vote of the people. Right. Let's assume we have a 65 percent turnout for that election. And that 100 percent of the people that turn out at that election vote for the proposal it fails. That's good. That's only a function of the sentiment that would happen that has systematically effect. So the function of the city council then will be to go to Sacramento hat in hand to ask
for some type of relief so that they can provide their citizens with the necessary police protection. What I'm saying is and I'm responding to your earlier comment is that the proponents of Proposition 13 apparently do not believe in representative government. Well I disagree with that. Well you just told me that you didn't think that the people that come out for an election and vote on the measure should have the power to saddle the community with a debt obligation. Well Judge that now now Judge overnight my in my mind a minority of voters is not representative of the people well that's not. Now we've had people who are afraid to vote and they choose not to and I understand why should there not voting be in fact you can't you can't take their citizenship away because they don't go to the polls and vote. Of course the reason that they don't go to the polls and vote because they say no matter what we do the government is so bad it doesn't make any difference. They don't want to have a voice. Well they should have a voice. They see that the political world it's got so rotten in this country and in this state that the people are totally disgusted with it.
You know judge our demands I mean to me is that I haven't given up on representing all right and I I I I you have I have I I haven't seen one representative government especially at the local first between you and I. Is that you think legislators and elected officials are representative government. And I don't I think the people in the government and not the temporary that's what I use traditionally don't believe in representative government. What I say. Yes but I think the people why are you taking that position. We are we are in the position where elected officials of this state and the crossing is cut don't represent the people anymore. But it is out of our system and representative government I think we can achieve. I hope this amendment takes us back. Represented. It forces them to put it to a vote of the people and that's what they that's what really kills them. They like to sit in a closed room and decide on my taxes and I have no choice. But the irony is that the person that stays home in effect casts a vote by not going to the polls. Which side does he catch it. Yes. It's a no vote. Yeah that's right that's right. And also as far as I'm concerned I'm an optimist about the future of this
country and I believe that the people that are opposed to Proposition 13 are those that do believe in local government that do believe in representative government and they believe that the system that began with the US Constitution and our federal system where we don't have such a thing is a referral to the people is a system that has made this country the miracle that it is. Oh I agree with that judge and until the last few years it work. But when we got one we created a new elite political society with words that the bulk of the money goes to the bureaucrats. We have changed this government from a government of the people by the people and for the people to a government by the bureaucrats of the bureaucrats and for the bureaucrats is what we do not agree that the most important part of Proposition 13 is how it affects the operation of government at the local level and at the state level. I think it's going to restructure the whole state. That's the purpose of. And that's what I would need people would talk about and think about it. I've said it all the time. You know we keep talking about the problem of property taxes when right probably the whole issue of
Proposition 13 is the function of local government welfare my and my answer to you on that judge is that Milton Friedman told me and will say so on television that that two thirds vote is the most important thing in our amendment. Mean the local and the local level that's right. And he says this is the only way left for the people to protect themselves against the bureaucrats. And you can see that it is virtually impossible. We won't say impossible but almost impossible for a local school district will say to get two thirds of all the people who are registered to vote to turn out on Election Day. And to get all of those two thirds to vote yes that has to happen for a little while. That's why is that the ground is going to be difficult. I don't think it ever happened. And the purposes that now don't the purposes of this amendment is to make it very difficult to raise taxes. Now they had in the legislature for a long time and judge nose's 50 percent plus one to raise the taxes and two thirds to reduce it. Now nobody cried about that. Because they was on the other side of the fence or that we finally got it changed after
100 years ago actually two years ago the people of this state decided that they wanted to change the answer corporation tax evasion so that they could be adopted by a majority vote right. So what are we going to talk about. What's going to have to happen to replace the taxes that will be lost as a result come in. I'd like to comment on that. All right let's do it first guys in the first place. This state is wallowing in money. The government has far too much money at every level. The state of California today and all of its agencies including property tax income tax sales tax licenses court filings business fees collects over 40 billion dollars a year. Now that's a thousand six hundred fifty dollars for every man woman and child all 22 million women in a state. Let's take Roy Belz. I don't think seven billion figures right. But he's an honorable guy. I'm going to use that. We think it's five but seven because you haven't from 40 you've got 33 billion dollars left that goes and is collected in the state. You have another 50 billion dollars in federal income that's collected
in this state and this and that money is enough to float this state in the Pacific Ocean on $100 bills. Now in the state of California every guy that worked for a living including the judge's shower in mine every nickel we make from January February March April to May 15th comes to pay taxes and that in itself will destroy what the judge liked and I like is a free country. There's no question it's going to destroy. We've got to stop this drain from productive people and to a non-productive government. All right. Let's hear from them. What you're going to have to do is to replace the lost revenue. It's always interesting to me when I hear that opponents of Proposition 13 talk they don't deal in specifics they deal in generalities with let's cut the fat let's cut we do this we don't have to but no where will they tell us specifically what programs have to be cut because they know that as far as the people are concerned the level of service will have to remain the same. So where is it going to come from. I don't agree. Let's say I don't agree with that at all. Don't the judge have to have to raise sales taxes to cover the
loss. You'd have to go to a fourteen point five cent sales tax to raise income taxes to cut to cover the loss you'd have to have a 150 percent surcharge and to pick up the loss from banks and corporations you'd have to have a 400 percent increase. This is the type of tax proposal that will have to be made to pick up the loss. And the irony is though and this is again the point that that is of most concern to me and to most of the opponents is that you put this at the state level and you take away the power of the local community to make decisions at the local level. You take away the power of that community to decide that they're going to have to spend their money in the form of a new library or they're going to spend their money or raise funds by a general obligation bond or that they're going to develop a new parts such as my community did recently which had strong community support. You're going to put all this in Sacramento. Talk about bureaucracy and let me ask you Judge the 30 percent property tax
reduction in the birther bill horrible our money come from to make up that loss. Now you're telling me it's all come out of Sacramento but you're telling me I'm not negate your argument as far as I'm concerned. No it doesn't because the author is sorry. All right. The authors of the bill and I am not as I say I was not one of the people that drafted the bill but they feel that that can be handled by the surplus that is in Sacramento the surplus amount of isn't it. That's correct. So Sacramento is going to have to bear Bill Sacramento's going to give them money to make up the lost and therefore the controls in Sacramento. And this is going to happen as a result of this state taking over all of the costs of welfare and some of the other programs that do that under this bill to under-13 to. Yes but you aren't going to take away the power of the of the local citizens and the local community to control their own destiny as to what kind of a sound idea. And you know judge if this is that bad in two years we can write a new one. We're going to try it because it's because we have to do something to straighten out the political world. We have to do something. In many in many
phases of of absolute extravagant stupidity and political spending. And isn't it funny that the three foremost economists in the United States Dr. Milton Friedman and Neil Jacoby and Arthur Laffer are all for this amendment. Well they because they say that it's vital to the economy of course. Mr. Laffer says it's unconstitutional. Well he's an economist not a lawyer. Well this is a good point. And he also said Read that we have a pamphlet right here. This is what he says. He says one other feature could well be in trouble because it seemingly violates the Equal Protection Clause of the Constitution. This feature maintains that market value is used for tax purposes cannot rise faster than some small percentage per year unless the House has been sold recently for the purpose of this analysis I'll assume the feature is removed. Well said. I tell you. I think he's right on that. You think it's unconstitutional. Well let me say this my language on Constitution. No I'm not short. Now let me say that. That's quite a thing to put to the people and I'll just laugh his opinion. Well
now you said that was right. Let me tell you. I'll tell you why. I think what I think today in this state if you and I have two houses here and they're both worth fifty thousand bucks and you own this when a guy comes over and pays you a thousand dollars for that house under a comparable sales ratio for me all the other houses in that area raised to the same amount. Now we think that's unconstitutional. Now the only difference between this thousand mistake thing and ours is that under this amendment these two houses fall comes and pays $80000. It raises it only on that on. But the reason the family pays the $80000 he determines is on market value. And as long as we have a property tax system in the state of California we can't get away. And the only thing I remember does it reduces a thousand mistakes to one. Do you think that you maybe you found unconstitutional. No I don't. Well of course this brings up an interesting point that the average home in California is sold once every seven years. And when that home is sold it will get a new tax. Correct. A new
tax base under Proposition 13 because once somebody buys it they establish the market. Why not just admit it. So they're going to say that even so corporations large companies that hold property over a long period of time they will be paying a small fraction of what the small homeowner will pay. And I would like to imagine that that's an absolutely misstatement. Well that's going to happen. No it isn't going to never be all right. How else are they going to resolve these questions are you let me go 30 second far right because that is true with respect to a few major corporations but most of the businesses in California are small and they turn over faster than homes. And so that is absolutely misleading because they're as a corporation it'll be owned by the corporation I don't make any different. It will because the corporation makes no difference. They'll sell the stock and they will not have a change in ownership and therefore they'll beat the tax. No guy that's going to pay it is the little guy who hasn't. I disagree with that. It's an absolute fact. It's no secret operation
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- PBS SoCal (Costa Mesa, California)
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- Episode Description
- A debate on Proposition 13, known as the People's Initiative to Limit Property Taxation. The initiative aims to limit all property tax, allow for reassessment of property when it is sold, and prohibit the State Legislature from enacting new property taxes. Howard Jarvis is one of the principle creators of the initiative and argues in favor of the initiative. Bruce Sumner argues in opposition to the initiative.
- Created Date
- Asset type
- Talk Show
- Copyright 1978 KOCE-TV
- Media type
- Moving Image
Guest: Jarvis, Howard
Guest: Sumner, Bruce
Host: Cooper, Jim
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Identifier: AACIP_0059 (AACIP 2011 Label #)
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- Chicago: “Jarvis vs. Sumner Special: A Debate on Proposition 13,” 1978-05-05, PBS SoCal, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed April 2, 2023, http://americanarchive.org/catalog/cpb-aacip-221-41mgqxdm.
- MLA: “Jarvis vs. Sumner Special: A Debate on Proposition 13.” 1978-05-05. PBS SoCal, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. April 2, 2023. <http://americanarchive.org/catalog/cpb-aacip-221-41mgqxdm>.
- APA: Jarvis vs. Sumner Special: A Debate on Proposition 13. Boston, MA: PBS SoCal, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-221-41mgqxdm