Prop. 13’s unfair legacy

We can’t raise property taxes, so new-home buyers lose out

In most respects, the Chico City Council’s recent decision to tack on a development fee to help fund expansion of the county jail was a no-brainer. The expansion is desperately needed, and grant money for construction—up to $40 million—is potentially available if the various jurisdictions in the county raise $4 million in matching funds.

Prior to the council’s May 5 vote, Butte County’s supervisors and council members in Paradise and Oroville voted to levy development fees to fund the jail expansion. Now that Chico’s council has joined the effort, only Gridley and Biggs have yet to sign on.

Jail overcrowding is the result of AB 109, the so-called “realignment” legislation that seeks to reduce prison populations by directing lesser offenders into county jails, forcing the early release of some inmates.

County jails weren’t built to hold inmates for longer than a year, and they offer none of the rehabilitative services found in low- and medium-security prisons. And, because of the failure of public mental-health services, more and more mentally ill individuals are ending up in jail. The overcrowding makes it impossible to meet their needs.

So what’s not to like about a fee that can raise $4 million in order to snag a $40 million grant for a much needed jail expansion? A lot, as it turns out.

Some history is in order. With the passage of Proposition 13 in 1978, municipalities lost their ability to adjust the property tax rate to meet the demands for services—roads, schools, parks and so forth—resulting from growth. Then they discovered a loophole of sorts—they could use development fees instead, effectively requiring new-home buyers to pay for those services.

Are the fees fair? No. They require one group of people to pay for services everyone uses. As developer Pat Conroy told the Chico council, there’s no reason to believe new-home buyers are contributing to crime, and yet they are being asked to pay for the jail expansion.

As Sean Morgan, one of the three council members who voted against the fee, argued, “[T]he cost needs to be borne by a greater and more diverse group of people. … The entire city, the entire county is going to benefit.”

Morally, he’s absolutely right. Politically, he’s dead wrong. Among its other provisions, Prop. 13 requires that any special tax be approved by two-thirds of voters. Good luck with that. Unless Prop. 13 is reformed, new-home buyers, a tiny minority, will continue to pay fees nobody else has to pay.