Who Broke the Economy? Presented at the Good Jobs LA 99% Spring

1. Part 1: The Golden Era
Once upon a time there was a great state called California. It was filled with natural
beauty, beautiful beaches, acres of orange groves and forests with magnificent
redwoods. The sun never stops shining in the great state.
People from all over came to California to experience its beauty and hope. Smart
government created jobs, built roads and a world-class free education. Because of
smart government’s investment in its people, California became a land where
dreams came true.

2. Part 2: Seeds of the revolt
In the 60s and 70s change was afoot. . Protests swept the nation as people of color,
women and students fought for justice, a better quality of life and for peace, not
war.
People kept coming to California, a beacon of hope, to realize their dreams.
Between 1950 and 1970, the population doubled. The face of California was
changing as more people of color moved to the great state. Some people accused
smart government of being a “welfare state.”
By the 1970’s, California was an expensive place to live. People couldn’t afford to
buy houses. Unregulated tax assessors began doubling or even tripling tax bills to
make more money. Homeowners saw their property taxes rise overnight. Local
government was slow to fix the problem. Across the state, homeowners grew
angrier and angrier.

3. Part 3: A wolf in sheep’s clothing
In 1978, a a lobbyist for landlords named Howard Jarvis, wanted lower taxes for
businesses and to shrink smart government, which he called the “welfare state.”
He took advantage of the anger that homeowners felt, and began an Anti-Tax
campaign. He launched Prop 13, which capped property taxes and made it nearly
impossible to raise money for government . Landlord associations and real estate
corporations backed prop 13 with $1.6 million. Voters across California, scared by
the changes they saw and angry about feeling squeezed, turned out in great
numbers to vote yes. Once it passed, homeowners were happy because they
thought it would bring an end to their problems .

4. Part 4: The real winners
Proposition 13 protected a generation of homeowners.
But even happier were business property owners. They
saw an immediate $3.5 billion drop in their taxes as a
result of proposition13 passing. The money they
invested to support the initiative paid off.
Business Bonanza: Saving in
Property Tax
Standard Oil of CA $47 million
Shell Oil $16 million
Getty Oil $12.3 million
Arco $10 million
Bank of America $7.2 million
Wells Fargo $1.2 million

5. Wall
St
Banks
and
Corpora0on
Avoid
Paying
Taxes
Taxes paid last year =
$0
Top 6 Banks
Average Tax Rate
in 2010 - 11%

6. Part 4: Unforseen Consequences
Since the proposition put a cap on property taxes, government was unable to invest
in all Califonian’s Dreams.
After 15 years, half of the state’s county hospitals closed. The public school
system that was once the envy of the world dropped to the bottom of the ranks.
Roads began to deteriorate. Everyone was worried that the great state was fast
heading in the wrong direction. The people most impacted were those who needed
smart government to achieve their California Dream – everyone but the very rich.

7. Part 5: Grinding Halt
Prop 13 required a 2/3s vote to raise state revenue. This allowed
a small minority of anti-tax legislators to block new money from
being collected for smart government. The legislature couldn’t
raise more money for schools, roads and hospitals. Government
in the great state was not able to work anymore.

8. Part 6: Grasping for straws
Once government stopped working, people in
the great state decided to take matters in their
own hands. They started collecting signatures
in front of stores and throughout their
neighborhoods to pass bonds and borrow
money for programs that they cared about like
housing, libraries, and schools. Many of these
initiatives passed, and government got money to
keep some programs running, but its debt grew
to $100 billion. The Anti-Tax leaders continued
to wage initiatives that made sure that the little
money government had didn’t benefit people of
color and immigrants. People grew confused,
angry at each other, and disenchanted with
government as they saw their dreams slip
farther away.

10. Part. 6. HOPE
In March 2011 the people came together across Los Angeles to
do something about the problem. They thought it was time to
tackle the problem that got them into the mess to begin with. It
was time to fight back. We formed an organization called Good
Jobs LA made up of unions and organizations that
represented poor people, the elderly, low-income families,
children and many more that were affected by the cuts. They
made a commitment to restore democracy and make CA a
better place to live again.