Proposition 13 was a political earthquake whose jolt was felt not just in Sacramento but all across the nation, including Washington, D.C. Jarvis’s initiative to cut California’s notoriously high property taxes by 30 percent and then cap the rate of increase in the future was the prelude to the Reagan income tax cuts in 1981. It also incited a nationwide tax revolt at the state and local levels. Within five years of Proposition 13’s passage, nearly half the states strapped a similar straitjacket on politicians’ tax‐raising capabilities. Almost all of those tax limitation measures remain the law of the land today.
Why was Proposition 13 so overwhelmingly approved in 1978? Few expected it to win. In fact, on two separate occasions, less draconian versions of Proposition 13 had failed. But by 1978 raging inflation had sent property tax bills in the Golden State soaring so high that many families had to sell their homes because they couldn’t afford to pay their taxes. Despite a torrent of horror stories from teachers’ unions, politicians, newspapers and corporate lobbyists in Sacramento about the potentially devastating effects of Proposition 13, more than 60 percent of the voters took a gamble and approved the ballot measure.
Then and now, Proposition 13 was and is the subject of relentless attack. Money ran a cover story back in 1994 by Richard Reeves titled “The Tax Revolt That Ruined California.” The article blamed the recession, the loss of 600,000 jobs and the decline in family incomes in the early 1990s on the cumulative effects of Proposition 13. No mention was made of the fact that in 1991 California passed the biggest tax increase ($7 billion) in the history of any state in the Union. The Pete Wilson tax increase negated many of the positive effects of Proposition 13.