"Christopher Palmeri's long feature at Bloomberg Businessweek attempts to trace U.S. decline to Californians' fateful decision in 1978 to cap the unchecked growth of property taxes...But Palmeri and his sources downplay or ignore two of the biggest reasons for California's perpetual budget crisis. Proposition 13 "effectively shifted the financing of portions of local government services and education from the property-tax base to the more volatile income- and sales-tax bases," Standard & Poor's said in a Sept. 8 report. True. Yet Palmeri fails to mention how the state ran budget surpluses until 2002, and local governments were so flush with revenue until 2007 that they would routinely vote to increase pension and health benefits for public employees, sometimes even retroactively..."
Bloomberg Businessweek's Weak Assault on Prop. 13 - Public Sector Inc. Forum
Click to go to PublicSectorInc to read this article by Ben Boychuk.