Thursday, July 24, 2008| As the county mulls a new property tax to pay for better firefighting, the natural question is: Why didn’t we do this earlier, before the devastating infernos? After all, San Diego County’s many fire protection districts have long assessed property owners for fire services on top of their regular property taxes, so why hasn’t the rest of the county, and its board of supervisors, followed suit?

The answer is probably not conservative ideology or lack of political courage but an unusual wrinkle in state law that traces its roots to California’s taxpayers’ revolt of the late 1970s, and provides a striking example of direct democracy’s unintended consequences.

To understand it, a quick history lesson is in order. In the 1970s, a hot real estate market drove property values through the roof — and took property taxes with them. Yet income didn’t keep up, fueling a taxpayer backlash that culminated in the 1978 Proposition 13. That ballot measure, approved overwhelmingly by voters, reduced ad valorem taxes to 1 percent of a property’s assessed value and required two-thirds voter approval for any new “special taxes,” a vague category that remained undefined.

Of course, though it reduced property taxes, Proposition 13 did little to reduce people’s thirst for government services. (Sorry, the popular idea that we can get all the services we need by simply reducing “fraud” and “waste” has never gotten us very far, because few people have ever identified any fraud or waste significant enough to truly make a dent in public finances). In response, local governments turned to alternative ways to finance themselves, including an unusual mechanism called the “special assessment.”

From the point of view of the taxpayers, special assessments aren’t all that different from property taxes: they appear on the property tax bill you get from the county, and are paid in the same way you pay your regular taxes. However, while property taxes are based on the value of your property, special assessments are calculated in proportion to the “special benefit” — a term as vague as “special tax” — that a particular property receives from a government project or service.

Before Proposition 13, special assessments were generally used to fund public infrastructure, but they’ve since grown to pay for an increasing amount of maintenance and traditional services. This rise has been driven, in no small part, by court rulings in the late 1970s that found special assessments to be exempt from Proposition 13’s 1 percent property tax cap and the two-thirds vote requirement required for traditional property taxes.

There is another difference, too: Unlike property taxes, special assessments generally require authorization from the state Legislature before they can be charged. In response to Proposition 13, California lawmakers dramatically increased the use of special assessments in the early 1980s, expanding both the number of assessments authorized and their allowed uses. In particular, San Diego Assemblyman Lawrence Kapiloff carried two bills in 1981 and 1982 establishing the legal structure for fire suppression assessments.

However, these the efforts to increase the use of special assessments ran into the opposition of Republican lawmakers. In particular, they were bothered by the fact that special assessments traditionally required no more than majority approval— less than the two-thirds vote required for special taxes by Proposition 13. So the Republicans and the Democrats made compromises. The law authorizing assessments for fire suppression, for example, allowed fire districts (probably located in rural, Republican-leaning areas) to charge property owners after a simple majority vote. However, the law said that if a city or county wanted to do the same, they needed two-thirds voter approval.

As the state Senate Local Government Committee wrote in a 1986 report, “This 1982 difference has its origins in legislative politics and not in any structural or constitutional distinctions. Because of this higher threshold, no city or county has ever levied a fire suppression assessment while at least 17 special districts have adopted them (as of 1986).”

Inadvertently, the higher vote threshold for cities and counties incentivized the fragmentation of fire services into small special districts, away from the centralized, and probably more efficient, coordination by municipal governments.

Special assessments created another potential problem, too, one that is becoming clear to the county: Voters who pay special assessments for specialized services are going to be reluctant to also raise their general property taxes for the same purpose, even if a general need exists. As The San Diego Union-Tribune‘s Anne Krueger reported recently, San Diego County property owners who already pay for their fire districts are not sympathetic to the county’s call to pay even more. From their perspective, they already pay higher taxes and already enjoy fire protection services.

This problem is bound to get worse. Imagine, for example, a day in the future when the city of San Diego decides it needs higher taxes to maintain and expand its park system. For the residents of Liberty Station, who pay thousands of dollars a year in special assessments for their own lush open spaces, it will be a hard sell to convince them that they should pay even higher taxes or that the city, as a whole, needs more parkland.

There are also other potentially odious aspects to special assessments. For example, while all voters get to vote on general parcel taxes, voting on special assessment is limited to property owners, and each vote is weighed by the amount of special assessment that a person would pay (a system codified by voters in Proposition 218). Additionally, unlike income taxes, special assessments do not take into account an individual’s ability to pay.

As the county’s current efforts make clear, voters in 1978 may have fixed one problem — only to create a different, more special one.

Vladimir Kogan is a doctoral student at UCSD’s Department of Political Science. He recently co-wrote, with Mathew D. McCubbins, “The Problem with Being Special: Democratic Values and Special Assessments,” an analysis of special assessment financing in California. His e-mail address is

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