Former UCLA Chancellor Charles Young fighting to overturn Proposition 13 in court
Former UCLA Chancellor Charles E. Young is part of a lawsuit to overturn Proposition 13 on state constitutional grounds. Young was chancellor of UCLA from 1968 to 1997. (Daily Bruin file photo)
By Andra Lim
Jan. 11, 2012 12:51 a.m.
The year was 1978.
Voters re-elected Jerry Brown as governor; University of California students paid $671 in tuition; and Charles Young was UCLA’s chancellor.
That June, Proposition 13 passed with the primary aim of reducing and capping property taxes, which were dramatically increasing as the real estate market boomed. The initiative also required a two-thirds legislative vote for any new taxes.
Proposition 13 set in motion a restructuring of politics, power and funding that created the California Brown governs today ““ and defines the challenges the UC currently faces.
A lawsuit brought by Young in 2009, which recently began the appeals process, is rethinking the state system born from the passage of Proposition 13.
The suit argues that the supermajority vote is unconstitutional and that tax increases should only require majority approval from the legislature. The lawsuit does not oppose the property tax ceiling.
If the court voids the supermajority requirement, state Democrats, who are just shy of two-thirds control in the legislature, could more easily raise revenues and perhaps boost the UC budget, Young said in an interview.
The lawsuit follows a lengthy history of challenges against Proposition 13. None have succeeded in uprooting the measure, and Proposition 13 has gained a reputation as an untouchable, politically sensitive cornerstone of California government.
The argument by Young’s legal team, led by William Norris, a retired U.S. Ninth Circuit Court of Appeals judge, hinges on whether Proposition 13 is a constitutional revision or an amendment.
A revision alters the “fundamental structure” of government and needs the approval of both voters and the legislature. An amendment, an “addition or change within” the Constitution, can be passed through the initiative process.
Young’s suit argues that the two-thirds requirement overturned the basic lawmaking principle of majority rule. This portion of Proposition 13 constitutes a revision ““ not an amendment ““ and was improperly adopted through a ballot measure, according to the suit.
“Proposition 13 created minority rule,” Young said. “A minority prepared to stick together, stick by its guns, can stop (a tax increase).”
Proposition 13 has also made the governor’s veto power “irrelevant,” the lawsuit argues. Only tax increase bills with supermajority approval can reach the governor’s desk, but those same measures have enough support to override a veto.
The Howard Jarvis Taxpayers Association, a group named after Proposition 13’s main advocate, is defending the two-thirds requirement against the lawsuit in court.
Kris Vosburgh, executive director of the association, said there is a precedent for supermajority approval in the U.S. Constitution.
“In the case of taxes, you’re taking away property from people,” Vosburgh said. “It’s not unjust that it should require a two-thirds vote.”
Over the years, Proposition 13 has constructed a fiscal system that made the UC especially vulnerable to slashes from the state in the last 15 years, Young said.
Local governments and school districts, which relied on property taxes for funding before Proposition 13 capped this source of revenue, became more dependent on the state’s money, Young said.
“Large sections of what was available for the UC, prisons, welfare had to be set aside to fund public schools and other programs that could no longer be funded by local governments,” Young said.
Proposition 13 also fueled the passage of a spending ceiling in 1979. Under the Gann limit, local government and school districts had to return excess revenue to taxpayers.
In an effort to stabilize education funding, the California Teachers Association put Proposition 98 on the ballot. The law sets aside about 40 percent of the state’s general fund for K-14 education.
“The state became more and more unwieldy in terms of managing its budget, with large chunks of the budget being set by a formula,” said Daniel Mitchell, professor emeritus at the Anderson School of Management and Luskin School of Public Affairs.
“The one piece that was discretionary became spending for higher education. The legislature always knew that if they cut funds there, the university could make it back by raising tuition.”
Proposition 13 handed the state a financial burden and a web of restrictions, handicapping its ability to sufficiently fund public services such as the UC, Mitchell said.
And the obvious solution to this problem ““ raising taxes ““ became a dead end, especially as polarization between the parties made supermajority support harder to gather, Mitchell said.
This summer, Brown failed to build Republican backing for temporary tax extensions and enacted a budget that slashed millions from the UC. As a result, UC tuition went up 9.6 percent.
Without the supermajority requirement, Mitchell said Brown and the Democrats may have been able to push the tax extensions through, saving the UC from further budget cuts.
Instead, Brown is looking ahead to the November ballot with an initiative that would raise the sales tax and income taxes for the wealthy to support schools and add to the general fund.
This plan circumvents the legislature, as Brown would only need a majority of voters to approve the increases ““ and polls indicate that such support exists.
Though the initiative process has been used to pass many taxes, no measure has ever originated from the governor, said Lenny Goldberg, executive director of the California Tax Reform Association.
Brown’s move shows that California is “ungovernable” under Proposition 13’s supermajority requirement, Goldberg added.
If his lawsuit is successful, Young said he believes the legislature would act to raise revenues and ramp up support for the UC.
Vosburgh said that even in a post-supermajority scenario, the UC could lose out on funds to public programs that have stronger lobbies.
“There was a two-thirds vote in 2009 to raise taxes,” Vosburgh said. “Did it help the UC system?”
Young’s lawsuit could end up in the California Supreme Court, and a final decision will take months to reach. If that decision is to overturn part of Proposition 13, experts say it will represent a major shift from the way state government has operated in the last three decades.