It’s the good news that California’s political establishment — Democratic politicians and their allies in public-employee labor unions — prefer not to acknowledge.

Dan Walters

The official line from the establishment is that California’s schools, local governments, and state programs are being financially starved.

The drumbeat of impoverishment is clearly aimed at persuading Californians, particularly voters, that vital services can be rescued from imminent collapse only by raising taxes.

One such tax increase — making it easier to levy property taxes on commercial land and buildings — is already on the 2020 ballot. Another — raising income taxes again on those at the top of the economic ladder — is being drafted by education groups.

Hundreds of local tax increases — sales taxes, mostly — have been placed before voters in the past couple of election cycles, and more are being planned for 2020.

However, the reality is at odds with the propaganda.

California state and local coffers are bulging with additional revenue, thanks largely to a still-vibrant economy.

Per-Pupil Spending on K-12 Has Risen by at Least 50%

Last week, the state Department of Finance closed the books on 2018-19 revenue and reported that the state collected $144.8 billion, $1 billion more than it had anticipated just weeks earlier, and $2 billion-plus more than the 2018-19 budget had originally forecast.

It’s also a whopping 71.5% more than the state was collecting a decade ago, far outpacing both population growth and inflation.

The state has enough money to max out its reserve funds and provide several billion dollars in extra cash to offset schools’ rising pension costs.

Per-pupil spending on K-12 schools has risen by at least 50% in recent years as they collected their constitutionally mandated share of that rising revenue and benefited from ever-rising property-tax revenue.

Speaking of which, the official line goes something like this: When voters passed Proposition 13, the historic property-tax limit law, in 1978, they hammered schools and local governments unmercifully.

Once again, the reality is at odds with the propaganda.

By imposing a 1% cap on taxing real property values (plus voter-approved bonds), rolling back taxable values to 1976 levels and limiting future increases to 2% per year, Proposition 13 did immediately and sharply reduce revenue. In fact, the measure cut it from $10.3 billion a year to $5 billion.

Since then, however, property-tax revenue has steadily climbed, thanks to that automatic 2% annual raise, new construction and the reassessment of homes and commercial properties when they change hands.

Taxable Property Values Up by More Than 6%

California’s county tax assessors have just closed out their rolls of taxable property for the 2019-20 fiscal year, and once again they are sharply higher, led by soaring property values in the booming San Francisco Bay Area.

Local governments and schools are seeing their pension costs skyrocket, thanks to some really bad pension-fund management, while state officials are beset by demands from their political allies for higher spending.

Overall, taxable property values are up by more than 6% to about $6.5 trillion, which will translate into about $75 billion in revenue. On average, property-tax revenue has increased by more than 7% a year since 1978, and overall revenue has expanded 15-fold since then.

So if California’s state and local governments are enjoying sharp increases in revenue, why is the political establishment complaining about an income/outgo squeeze that must be relieved by taxing even more?

The answer is found on the outgo side. Local governments and schools are seeing their pension costs skyrocket, thanks to some really bad pension-fund management over the last couple of decades, while state officials are beset by demands from their political allies for higher spending on a wide variety of education and social welfare programs.

Politically, it’s easier to say yes to taxes than to say no to spending.

CalMatters is a public-interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to

One Response

  1. Monadnock Man

    Why is it soaring, simple, the 4-decades of control by liberals who never saw a tax, fee, regulations with fees, etc. should ever go to waste.

    However, at the Capital Mall, these minions are never at a loss, as they produce over 900 pieces of unmitigated dribbling legislation without an ounce of vetting – EVER!

    Thus, we as taxpayers spent to much time trying to figure out what is real and what is not; however, that will NEVER OCCUR IN MY LIFETIME!!!!

    Survival of the taxpayer who is in a severe crisis mode in CA today! For those that do not think so go then head off to the rat hole called LA, the sewers of San Diego, poop city USA SFO, liberal leadership has tanked these locations along with many vibrant cities large and small around the country as well!!!

    More important, due diligence will never be completed by these minions as they will never eliminate the crap of yesterday that is no longer functional today!!!

    The current paradigm of CA leadership is functioning on this mantra – if it feels good, it is free, therefore, voted it in regardless of the disastrous outcomes. There are one too many examples proving this statement absolutely true right now!!!

    Until business acumen with superior competencies requiring regular reviews of the old junk on the books that must be deleted, nothing changes!


Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

We've got issues, and we're willing to share
(but only if you want them in your inbox).