Proposition 13--How California Governments Coped With a $6 Billion Revenue Loss

Although Proposition 13 in California reduced local government property tax revenues by an estimated $6 billion in fiscal year 1979, an analysis shows it did not have a material impact on local government programs. State and local government surpluses, a strong economic climate, and increased fees and user charges for things such as business permits and fire protection services, all contributed to local governments' ability to maintain and, in fact, increase their expenditures in fiscal year 1979. Because a recently enacted California law has provided for a multiyear replacement of funds to help offset revenues lost by local governments, the predicted dire consequences of Proposition 13 have basically been avoided.