CALIFORNIA'S Proposition 13, the grandfather of the 1980s tax revolt, will be challenged before the United States Supreme Court Tuesday in a case with implications far beyond the Golden State.
A ruling could either buttress the landmark tax-limiting initiative or incite a political backlash of the kind unleashed when it was approved in 1978. The high court review comes at a time when anti-tax fervor remains strong throughout the country, including in California, and has injected itself into the 1992 presidential campaign.
If the justices were to overturn Proposition 13, they might hand anti-tax conservatives a potent issue for this year's campaigns.
At issue is whether it is constitutional for a state to tax newcomers more than longtime property owners. It stems from a suit brought by homeowner Stephanie Nordlinger against Los Angeles County Assessor James Hahn. Ms. Nordlinger is challenging the equity of the measure's assessment provision on the ground that neighbors with nearly identical properties are paying widely disparate property tax bills - in her case, 4.5 times more than nearby residents who have owned their homes since 1975.
The suit does not challenge the element of Proposition 13 that caps property taxes at 1 percent of the assessed value. It only challenges the portion that limits annual increases to 2 percent, except for new construction or when homes change hands. Those properties are appraised at fair market value.
Lawyers for Nordlinger contend the inequities between new and longtime homeowners discriminates against people who move frequently. Defenders counter that Proposition 13 promotes tax predictability and is fair because all homeowners are treated equally and know up front what they will be paying. They contend that the assessment system better reflects the ability of people to pay and still provides adequate income for local governments.
"We feel it is a rational, reasonable policy," says Joel Fox, president of the Howard Jarvis Taxpayers Association, which has helped in the defense.
A ruling is expected by July. If the Supreme Court were to overturn the measure taxes would become a dominant issue in California in 1992.
But even if they don't, questions of tax fairness will continue to surface. A lawsuit wending its way through the courts challenges the way state funding formulas put in place after Proposition 13 affect counties.