Rally ‘Round the Palm

Picture this: A man and his wife are sitting at their kitchen table. This particular table happens to be situated inside a shingled house above the Rose Bowl in Pasadena.

Not a bad house, and that’s why the man and his wife have lived there for 15 years. Let’s say it has three bedrooms and let’s say they paid $92,000 for it in 1976, a price they thought to be outrageous at the time.

Anyway, they’ve loved the house but now they are plotting a change. Three kids have come along and one of them has asthma. They need clean air and one more bedroom.

They start to pencil it out. Even with the recession, they figure the house will go for about $525,000. If they play their cards right, they could shop for a new place in the range of $600,000.

They look at each other and smile. Neither of them ever dreamed that, in their lifetimes, they would ever deal with numbers this large.

Then they get to property taxes. On the Pasadena house, they are paying about $975 a year. This is thanks to Proposition 13, of course, which has allowed only minuscule increases over their 1976 rate. They have been rewarded for staying put.

But the move will change all that. The new house will be taxed at its current value. Instead of $975, they will owe the county $6,000 a year.

Suddenly, this project no longer pencils out. A $5,000 increase in property taxes, year after year, is more than they can afford. One more bedroom is not worth it.

They are stuck. They are prisoners of Proposition 13.

Whether our couple stays stuck now depends, it seems, on the U.S. Supreme Court. This past Monday, the court announced that it would consider arguments that Proposition 13 be wiped off the books because of the way it doles out tax assessments.

The case was brought by Macy’s department store, which had its property taxes doubled after the store went through a management buyout in 1986. A similar suit, aimed at residential assessments, has been filed by Baldwin Hills resident Stephanie Nordlinger.

So the court will deal with the core of Proposition 13, both commercial and residential, all at once.

Let me say it for our hypothetical couple: oh, happy day. May the court be speedy in its work. May it smite Proposition 13 a mighty blow.

Proposition 13, see, was never what it seemed. We thought we were buying tax reform from a couple of old geezers who looked like grandpas and talked like country revivalists. To this day, it’s hard to accept that Paul Gann and Howard Jarvis were actually shilling for the corporate trusts.

Now if you’re a renter, this matters to you not a whit. So go ahead and turn the page. But if you’re an owner, dig it: Any law that demands one person pay three times as much tax as his neighbor simply because he showed up two years later is a law that invites cynicism.

Maybe you regard yourself as a winner under Proposition 13 because you bought in the mid-1980s. That means you’ve benefited from the last surge in property values.

But eventually, like our couple, you will face the prospect of becoming a loser simply because you want or need to move. And then you will pay.

The only strategy for avoiding this switch is to hunker down in your life-of-Riley house as the years pass and the banana palms grow huge and cover your windows in the deep shade of the jungle. Eventually the kids on the block will pass your house and refer to you as “old crazy so-and-so” who never peeps out of the gloom.

Few will do that, of course. On the average, we move every five years. And if my arithmetic is correct, that means there are now far more losers than winners under Proposition 13. Residentially speaking, of course.

For the corporate trusts, it’s a different matter. They sail on, rarely bought and rarely sold. Only the occasional takeover victim, like Macy’s, feels the Proposition 13 squeeze.

So why do we clutch Proposition 13 to our bosoms? Why does this old piece of treachery remain so dear? Perhaps it’s like religion, something beyond understanding.

Whatever the reason, it lives on. After the Supreme Court announced that it would hear the case on Monday, Gann’s son called for a boycott of Macy’s because the company had the gall to bring its lawsuit.

And, you know, I bet he got a few to rally around. Some true believers who wanted to burn the heretics.

And after it was over, wanna bet they slunk back to their houses with the big, big banana palms?