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Viewpoint: Montanifornia or Calitana? Beware of ‘Prop 13’

Missoula County Clerk and Treasurer Tyler Gernant.

Recently, two wealthy Californians who moved to the Bozeman area decided that Montana should import California’s problems without bringing any of its great features.

CA-121 is a proposed Constitutional Amendment that is modeled on California’s Prop 13, which has been a disaster for California. It benefits rich property owners at the expense of everyone else. It cuts off funding for schools, police and fire. While CA-121 has some very simple language, its ramifications are unnervingly complex.

Presumptively, CA-121 would limit residential property taxes by capping the growth from the purchase/build value to 2% or inflation, whichever is lower. Your property taxes could not exceed 1% of this depressed value. While that sounds great for taxpayers, it has created some of California’s biggest problems.

The year Prop 13 was implemented in California, property tax receipts plummeted 60%. Police and fire stations closed, local education funding was slashed as control shifted from local school boards to the state, and roads fell into disrepair until toll roads became more palatable. Sales and income taxes increased.

Another insidious thing happened too; land use decisions began focusing more on potential government revenue than community need. In Brisbane, California, a 2,200 home development became mired in controversy after a report that a hotel would net $8 million more in tax revenue per year.

In a state that needs to build over 250,000 housing units per year to keep up with growth, imposing revenue requirements on every project has become the norm. Fremont, California, now charges more than $140,000 per home in impact fees alone. Because the carrying cost of bare land is much cheaper, weed infested lots stay fenced up for longer.

Renters find it much more difficult to transition into homeownership, and the next generation is forced to pursue their dreams far away from their parents who enjoy the benefits of Prop 13. If you think that Montana has an affordable housing problem now, CA-121 would only make it worse.

More awful is that the benefits of CA-121 skew sharply to the rich. In 2003, Warren Buffet paid $14,410 in property taxes on his primary home in Omaha, Nebraska. Conversely, he paid just $2,264 in property taxes on his California vacation getaway that was worth 800% more. Warren Buffet’s fair share of taxes were instead paid by new homebuyers, renters, and shoppers.

When we look to adopt California policies, we should ask if the impacts are what we want for our Montana future. CA-121 won’t bring the beach, warm weather, or the many other benefits of this wonderful coastal state; but it will exacerbate our housing crush, force us to find different ways to tax ourselves (ex. 10.75% sales tax in Alameda, CA), and destroy our schools (CA went from 14th in the nation prior to Prop 13 to 43rd in the nation by 2010).

When the well-meaning signature gatherer asks you to sign the petition for CA-121, I hope you’ll remember that California is not Montana and DECLINE TO SIGN.