California Property Tax Revenue is way up Despite Prop 13

Would you be surprised to learn that, despite the horrible "straitjacket" of California's Prop 13, property tax revenue has increased at double the rate of inflation and population growth? National Review Online weighs in with some interesting facts.

The claim that Proposition 13 crippled California’s revenue stream also doesn’t hold up. Because assessments can be raised to current values when property changes hands, property-tax revenue went from $6.4 billion in 1980–81 to $43 billion in 2006–07. That’s a nearly 600 percent increase, which is far higher than the combined rate of population growth and inflation over the same period.

Now, population increase over that period was 23.8 to 37.3 million, or 1.57X. And inflation was 2.54X. So CPI+P was almost exactly 4x (a 300% increase). So, assuming that their figure of 600% for property tax increases is correct, that means that property taxes have outstripped inflation plus population increases by roughly a factor of 2X. Probably because the median price for a California house has increased from 100K to more than 450K over that time period. I found some data supporting this 2 times on this chart (look for Chart 2), showing that the assessed value of property, adjusted for inflation, has increased at double the rate of population growth.

So, whatever the cause of California's budget crisis, NRO is correct that Proposition 13's effects on property tax revenue is not the problem. Since that revenue, adjusted for inflation and population growth, is roughly double what is was before Prop 13.