People have to pay all these taxes, they don’t get nothing for it.
I feel like screaming.
It’s kinda like a Boston Tea Party, that we’re saying we’ve had it.
In the 1970’s, rising property taxes started a revolt in California.
Proposition 13, that’s what it was called
and it could take its place alongside "No Taxation without Representation."
California’s young governor and other officials tried to stop it.
I must say that the proposed initiative will do nothing short
of destroy education in California as we know it.
But there was no stopping the man who led it.
We the people – not the politicians – are still the boss.
More than 35 years later, tax cutting measure Prop 13 is still on the books,
but what has it really meant for California?
In the 1970’s, the nation’s economy had hit the skids.
An energy crisis meant long lines at gas stations and inflation was eating away at worker’s paychecks.
Then, Californians received their property tax bills.
Dolores McCormic last year had to pay $646. This year, its $1072.
The state has become an octopus, it’s just gobbling up all our little homes, that’s all.
Howard Jarvis said the reason he got involved in the tax revolt is he once was helping
a woman who was really afraid that her property taxes were going to force her out of her home.
Joel Fox started working with Jarvis in the 1970s.
When he went down to the county building with her, according to Howard,
she had a heart attack right there in the building.
And it really prompted his theme that he was going to follow.
And he says, “Death and taxes may be inevitable, but being taxed to death is not inevitable.”
California’s constitution allows anyone with enough popular support
to put a proposed law on the ballot.
Jarvis, a retired businessman, had tried tax-cutting measures before and gotten nowhere.
But with voter anger at a boil, Jarvis proposed a bold idea.
It would cut property taxes sixty percent on the average,
limit them to one percent of market value.
To the cities and counties of California it would mean a revenue loss of at least $7 billion.
For many, those cuts were too harsh.
California’s governor, Jerry Brown, said the tax cuts would benefit corporations
more than homeowners, because businesses would receive more of the tax savings.
Brown has campaigned hard against 13, calling it crazy,
a bonanza for large landholders and corporations who stand to get the biggest tax savings.
Opponents also pointed out that as a lobbyist for the Los Angeles Apartment Owners’ Association,
Jarvis represented one of the potential big winners.
But he countered criticism with a populist message.
After all, the basis of a free country is that government must be limited.
And now we got unlimited government.
That brings unlimited taxation.
That either brings you into bankruptcy or dictatorship.
So you could tell: this guy is not a Hollywood guy, this guy is not a bright and shiny guy.
Tom Hayden was part of a coalition that fought against Prop 13.
But he understood Jarvis’s appeal.
He was really not the elite.
He spoke for people who felt pinched, economically pinched.
I’m as mad as hell and I’m not going to take this any more!
Jarvis found inspiration for his Prop 13 campaign in the 1976 Academy Award-winning film Network.
The main character, Howard Beale, you know, becomes a television star
by getting on television and shouting, “I’m mad as hell. I’m not going to take it anymore.”
That was Howard Jarvis’s modus, he picked up that line and that persona.
I don't know what to do about the depression and the inflation
and the Russians and the crime in the street.
All I know is that first, you've got to get mad.
You've gotta say, "I'm a human being, goddammit!
My life has value!"
Howard Beale’s signature line from the movie, “I’m mad as hell,”
struck such a popular chord that Jarvis used it on the cover of his autobiography,
and it became a rallying cry for the Prop 13 movement.
They are talking revolution in California.
A revolution against taxes and government.
I feel that we just have to stop this excessive spending.
I just feel it’s getting out of hand.
Jarvis’s popularity soared after he started regularly appearing on a Los Angeles TV station
in a series of debates where he took on Prop 13 critics.
He is using this taxpayer revolt, “homeowner revolt” to really help not the homeowner really.
That’s phony.
Can I finish, Mr. Jarvis?
No.
It’s to help the big industrial property owners.
That is the biggest phony lie!
Opponents to Prop 13 argued that it would erode the local services
that property taxes helped pay for.
It takes too much out of the public sector, $7 billion,
which would jeopardize our bonds, our fire department, our police, our schools, our other programs.
But supporters of Prop 13, like former governor Ronald Reagan, reassured voters that it wouldn’t spell disaster
because the money saved would be spent generating other tax revenue.
The loss of revenue over any period of time,
it will not happen unless the people bury that seven billion dollars in a tin can in the backyard.
Prop 13 struck a nerve with voters.
They rolled the dice.
The elites told them that this would be a catastrophe, and people just didn’t care.
They want to see politicians punished and spending cut.
On June 6, 1978, Proposition 13 won in a landslide.
We, the taxpayers, have spoken.
We have made clear our goals.
Now, we are watching you.
It is your responsibility to make Prop 13 work.
The state got the message.
We have only three weeks to act.
Three weeks to decide multi-billion dollars of fiscal questions.
Most school districts have already announced there will be no summer school this year.
Not since the depression years of the '30s has summer school been cancelled in California.
Jarvis shrugged off the pending cuts.
Eliminating summer school? I mean, he said, "that’s just babysitting."
Art and music and the rest of it – he just said those were frills.
The most important thing in this country is not the school system, nor the police department
nor the fire department -- the right to preserve the right to have property in this country,
the right to have a home in this country, that’s important.
As California struggled to meet its bills, the architect of Prop 13
became a national sensation, spreading the gospel of tax-cutting.
Not many people of Howard Jarvis’ background
end up with their face on the cover of national magazines like Time.
It made him a celebrity.
Pigs could stretch their limbs out, if you check the box for yes.
Prop 13 also had another effect.
Whether it was this proposition sponsored by animal protection groups
to make farm animals less confined, (it passed)
or another initiative, backed by millions from Texas-based oil companies,
which aimed to roll back California’s pro green climate change law
(it failed)
voters have since used ballot initiatives like these
to amend California’s laws more than 75 times.
What Howard Jarvis and the taxpayers’ revolt showed us in the late 1970's was that you can
tap into that popular sentiment, that public revolt, and use it to change the law.
In California, anyone with a couple million dollars and an idea
can get a measure on the ballot with a chance of getting it passed.
While there have been scores of citizen’s initiatives in California,
nothing has had more lasting influence than Prop 13.
The tax-cutting measure has kept rates low, saving property owners billions
and allowing many to hold onto their homes.
But critics say it has also contributed to economic problems.
Today Governor Arnold Schwarzenegger came out with a budget plan
that cuts almost everything in sight to try to make up a staggering deficit there.
People that think elections don’t matter
have to weigh carefully what happened with Prop 13.
We’re still living with the consequences.
I’ve seen what it’s done to our schools.
We used to be in the top five in per pupil spending.
Today, we’re closer to the bottom.
We have hundreds of thousands and millions of parents whose children suffered
an inadequate education as a result of those schools being cut.
Jennifer Bestor, a mom and school volunteer who lives in Silicon Valley,
used 2014 property tax data to explore the impact of Prop 13.
This is a property that always interests me because we’ve got a Walgreens,
we've got an Unamas, we’ve got a Starbucks.
Under Prop 13, property owners who hold property for a long time
still pay taxes tied to the original purchase price, regardless of the current market value.
Bestor says that means owners with similar properties contribute disparate amounts,
with some paying much less tax.
We’ve got about 15,000 square feet of space.
And it’s only paying $9,337 a year in property tax.
I’m not an assessor, but I would expect it to pay about $75,000 or more a year in property taxes.
Essentially, they’re getting a $65,000 free ride. Which I tend to think of this in terms of school kids.
Wow, that's six and a half kids who could be educated for the amount of money that they’re escaping.
Property taxes are supposed to reset to market value when a property is sold.
But loopholes have allowed some commercial properties to keep these low tax rates regardless.
In 2011, when Jerry Brown became California’s governor again, 36 years after his first term,
he proposed a new tax on high earners as a temporary fix to help fund schools.
For California’s future, vote yes on 30.
He asked people, “I’ve got this idea. Rally around me.”
And he had a vehicle that allowed people to rally around him,
and he put it on the ballot and they got to vote. And they did rally around him.
But Prop 30’s wealth tax was only a band-aid, sunsetting in 2018, unless extended by voters.
Critics say an overhaul of Prop 13 that would limit its benefits to homeowners
remains part of the solution to California's budget woes.
What we have right now is broken and we have to fix it,
and we need leaders who have the courage to stand up and say,
“Hey, look. Why can’t we have a rational discussion? This isn’t working.”
Howard Jarvis died in 1986.
But Fox says that any attempt to roll back Prop 13
would still make his old boss, and most California homeowners, mad as hell.
We’d fly back into Los Angeles. And when you fly into Los Angeles, to LAX,
and you come down and there are thousands of homes,
and Howard would be looking out the window more than once,
and he said, “I saved a lot of people their homes.”