LETTER
The
debate across Proposition 1 pros and cons has been heated, but healthy. As a
peacemaker "middle" kinda guy, here's my thought. The recent property
tax laws enacted since 2023 (7 total) have greatly helped ease the inflationary
pressures on our property taxes. However, the pinch on revenue-receiving
entities varies wildly. Whether Prop1 passes or not, the current tax exemptions
from the various Statutes now in place need backfill to ensure our locals
remain healthy long term. Prop1 just emphasizes this need even more.
Many companies provide a profit-sharing benefit to their employees. We can do the same via the State General Fund and the investment income component rocketing higher. For at least five years, this cash component averaged $375M. 2025 saw it launch to $800M+ as bond yields and market forces climb. 2026 will probably be another record-breaking year and an opportunity for clever folks to fairly harness these windfalls so everyone wins.
Example: if we need $125M/yr as dollar-for-dollar backfill, why not set a GF
investment revenue bar of, say, $500M. If the GF meets that target, then
backfill the local entities 100%. If the GF only reaches $400M in investment
cash, maybe weigh the backfill so 50% comes from the GF and the other 50% comes
from reducing exemption payouts. Everyone receiving an exemption still gets a
tax break while the State's GF doesn't get soaked either.
It's a strategy. Smart folks can work the details to provide the elegance
needed in the Legislature and LSO. Either way, we can work this out so everyone
wins. This solution allows modulation across good times and bad, keeps our
local entities consistently whole, and also allows everyone to participate
rather than the "I win, you lose" current mindset we seem stuck in.
Pete Fox
Casper