The Supreme Court Thursday upheld California's Proposition 13, the landmark 1978 voter initiative that placed a cap on taxes for existing property but has allowed new property to be taxed at much higher rates.
By an 8-1 vote, the court said the law - which has caused a massive disparity in taxes on nearly identical property based only on how long a person or company has resided in the state - does not violate the 14th Amendment's guarantee of equal protection.Proposition 13, part of a voter tax revolt, essentially froze taxes on existing property at 1975 property value levels. Newcomers, however, must pay current market rates.
Proposition 13 also has been the model for many similar tax initiatives nationwide, and the court Thursday gave locales wide berth to construct such taxing schemes.
"Certainly, California's grand experiment appears to vest benefits in a broad, powerful and entrenched segment of society," Justice Harry Blackmun wrote for the court. "Yet many wise and well-intentioned laws suffer from the same malady."
Proposition 13 - approved by nearly two-thirds of the electorate - "is not palpably arbitrary, and we must decline (the) request to upset the will of the people of California," he wrote.
Justice John Paul Stevens, in dissent, called existing California landowners "squires," and said Proposition 13 is "arbitrary and unreasonable."