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Chapter 24: The Tax Revolt
In 1978, Californians approved Proposition 13, a ballot initiative that slashed property taxes—the traditional mainstay of counties and school districts—and froze property tax rates at the level they had been in 1975, capping future increases at two percent annually. Following Proposition 13's passage, property tax revenue plummeted between six and seven billion dollars a year, a sum equivalent to 40 percent of the revenues of all California counties combined.19 As the state scrambled to help schools, cities, and counties make up some of the funding they had lost at the ballot box, it became clear that all publicly supported enterprises were at risk.
The University, Saxon told the Regents, must accelerate its planning for "an era of reallocation and consolidation."20 While the University's planners would not shrink from considering a wide range of potential actions, from encouraging more intercampus cooperation to phasing out certain programs, Saxon made it clear that closing a campus—a topic of much speculation—would not be among them.
Besides the fiscal effects of tax-limiting initiatives, there was also the long-term demographic picture to consider. The data projected a decline of 15 percent in the number of eighteen- to twenty-four-year-olds by the early 1990s. Although Saxon believed that the University's quality would continue to make it attractive to students and thus mitigate the dimensions of this potential decline, he also recognized that without careful planning the impact on the University's fiscal and academic vitality could be devastating. He wanted, above all, to avoid a series of ad hoc, across-the-board cuts that treated all programs—the outstanding and the ordinary—alike. Given the unrelenting budgetary pressures and the downward enrollment projections, the only way the University could control its own future was by rigorously protecting the best of its academic programs.
At the urging of several Chancellors, Saxon also encouraged vigorous private fund-raising at the campuses and provided the smaller campuses with seed money for development activities. This initial investment has brought billions of dollars into the University in the years since.
The battle to sustain the University's quality in an era of waning public investment was waged throughout the Saxon administration. The success of Proposition 13 spawned a host of tax-cutting initiatives, among them Proposition 9, a 1980 ballot measure that proposed to halve the state income tax, at an estimated cost of $4.8 billion in its first year.21 Given the public mood, the conventional wisdom went, any official who dared to oppose tax limitation was courting disaster. Saxon refused to be discouraged by this or by Proposition 9's enormous early lead in public opinion polls. He gave a series of speeches up and down the state documenting the harm the initiative would do to the University and other publicly funded activities; Saxon was one of only a handful of state leaders to speak out against it. In the end, Proposition 9 was defeated.
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The Regents of the University of California. All rights reserved.
Last updated 09/29/05.