Close to Home: Prop 15 fills need for schools, public services
Proposition 13 provided benefits to homeowners and all businesses by restricting property taxes to 1% of market value and restricting any tax increases to 2% of the previous year’s taxes. Proposition 15 on the Nov. 3 ballot leaves this in place for all residential and agricultural properties. It continues all Proposition 13 protections for housing, both homeownership and rental. It would increase the tax obligation for commercial and industrial properties, with values over $3 million, by reassessing them to current market values, but it maintains the 1% of value cap on property taxes for all properties, including large industrial and commercial properties.
Proposition 15 would provide up to $12 billion per year to schools and local governments. This would benefit public services, infrastructure, housing and schools. California’s struggling school system was near the top in the nation at one time. Now it ranks No. 21, spending $12,143 per student annually. New York, at No. 1, spends $23,091. Public services and education need new resources. Proposition 15 would shift responsibility to big businesses, but they would still benefit from the 1% of value cap, something not provided by most other states.
A Press Democrat editorial opposed Proposition 15 in part because some of this new funding could be used to maintain unsustainable levels of public employee pensions. The original intention for pensions was that they would be paid from investment earnings, but that has been insufficient. So governments need to pay the shortfall, and this has become a significant burden. Governments are obligated to maintain the same benefit terms provided in employment agreements, and the courts have upheld this practice, known as the “California Rule.”
Pensions are based on an employee’s highest salary. Many retired public employees also receive Social Security benefits, and they cease making their pension fund copayments. As a result, many retirees, some of whom can retire in their 50s, have incomes greater than their highest salaries. It’s not fair, and The Press Democrat is right to criticize this practice. The right way to deal with it would be to put the question on the ballot and let the people decide if the California Rule should be eliminated.
However, our schools and public services are in desperate shape, and the need for increased funding to schools and services is essential. Proposition 15 deserves our support.
John Lowry, a former executive director of Burbank Housing Corp., is a resident of Sebastopol.
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