As California faces another fiscal crisis, The state needs to take a hard look at Proposition 13. By hard look I mean destroy.

For those too lazy to look at the wikipedia article, proposition 13 was a brilliant plan by some anti-tax crusaders in orange county to completely thrash state finances. Prop 13 caps property taxes to a certain percentage point increase each year. Those taxes are also not reassessed each year. This has gutted the major revenue stream of California cities, forcing them to rely on state block grants, which in turn make it very hard for the state to make ends meet as so much state funding must go to finance local municipalities. Worse still cities like San Francisco must beg the state assembly (and the voters) for money to buy things like infrastructure. Not to mention the damage this system has done to the real estate market.

Repealing prop 13 will cause upheaval in the state real estate market, as massive increases in homeowner property taxes are certain to cause even more houses to go on the market. This would really cause a housing crash. But there is no choice, surely policy makers can figure out a way to get rid of this crippling problem for the state without too seriously damaging the state economy.