What Prop 13 was really all about

Deathly afraid that sky-high property tax rates in Nevada will trigger an historic tax revolt, members of the state’s tax-consuming class are clearly in a dither.

Some of them are angry at Clark County Assessor Mark Schofield for suggesting that the 2005 Nevada Legislature cap property tax increases at a maximum of 6 percent.

Of course, Schofield, like many other observers, thinks that unless Nevada taxpayers get some relief, they’ll pass something like California’s Proposition 13. That could put Silver State government—both state and local—on a permanent diet.

But those who are angry at the Assessor can’t see that far. They would like to pocket the entire property tax increase as a windfall for government. For years they’ve been successfully expanding the public sector at the expense of taxpayers, and they have an infinite number of new schemes for spending your money. For them, too much is never enough.

Shrewder heads, while on board, are taking a different tack. They’re trotting out “solutions” that appear optimized for minimizing chances of real tax reform.

State Senator Dina Titus, for example, is suggesting a property tax freeze over the next year or two. That, she says, would allow lawmakers at the coming session to focus “on policy, not politics.” Yet, at the January 7 UNLV property tax conference, the senator’s own focus was entirely on the politics of blocking any significant change.

“We’ve got to look at what will keep something off the ballot,” she told the gathering. And when two other panelists began discussing which class of property owners should get priority attention, Titus reproved them.

“It’s not an issue of whom government needs to focus on helping,” she said. “It’s finding something that will affect the political reality that will drive the legislative process.”

The argument put forward by Guy Hobbs, who for 20 years in both public and private life has served Clark County as its financial point man, is that the situation currently facing Nevada homeowners is a temporary “aberration” that doesn’t require systemic reform. That was the line he took at the January 7 conference and in a recent white paper.

“We are not dealing with a fundamental flaw within our system of assessment and taxation,” wrote Hobbs. “For this reason, consideration of methods that would radically overhaul Nevada’s system—such as implementation of a California-style tax limitation system—would appear to be well beyond the scope of solving the problem at hand.”

But the real “problem at hand” for Nevada—as in California in 1978 when its voters limited taxes with Proposition 13—significantly transcends questions of exactly which assessment or taxation systems to use. Something much more fundamental is at stake.

Indeed, it is a systemic problem that both Titus and Hobbs, by their very prominence and political power, demonstrate—confirming that what Nevada’s emergency does, in fact, require is systemic, structural reform.

Government in the Silver State has become a sophisticated mechanism for the transfer of wealth from private sector citizens to those employed by the public sector. But this particular ongoing change in government is only the fruit of an earlier shift of political power and, indeed, fundamental sovereignty.

Public-employee collective bargaining laws, in both Nevada and California, have given government union bosses special rights, legally, over other government employees and other union members. Flowing naturally out of that is effective control of union treasuries, which in turn have become powerful war chests for funding political campaigns. Backed by these resources, tax-consumer interests have achieved political control over much state and local government—first in California and later in Nevada also.

Thus, when government union bosses were given special rights, legally, over other government employees and union members, they were also, in terms of effective constitutional structure, given special rights over all other citizens.

Throughout most of the 1960s and ’70s, as California homeowners sought relief from accelerating inflation, they repeatedly saw—up close and personal—their real loss of effective political sovereignty.

Repeatedly all the state’s political institutions—county assessors, state legislators, California Supreme Court justices and local county governing boards—failed the state’s homeowners. The growing lock on political power of the public-sector political machines had hamstrung the state’s political institutions. Some, like the state supreme court, were actively hostile. Others, like the state legislature, were simply paralyzed.

Finally, by 1978, California voters had had enough. Ignoring sky-will-fall wails from the tax-consuming establishment, they struck directly at its life blood: its river of taxes.

They passed Proposition 13.

Steven Miller is policy director for the Nevada Policy Research Institute.