Supreme Court Agrees To Hear Challenge to Calif.'s Proposition 13

By Mark Walsh — October 16, 1991 6 min read
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The U.S. Supreme Court last week agreed to hear a challenge to a central provision of California’s Proposition 13 property-tax-limitation law, the overturn of which could throw funding of local government in the state, including school districts, into disarray.

“It would totally turn upside down the structure of property taxes in California” if the provision is found unconstitutional, said Kevin Gordon, director of governmental affairs for the California School Boards Association.

The High Court accepted the case on Oct. 7, the first day of its new term. The Justices added only 13 cases that day to the five dozen it had already agreed to review in the 1991-92 term. Among the approximately 1,300 petitions for review the Court declined to hear were several education cases.

Under Proposition 13, passed in 1978 during a wave of intense anti-tax sentiment as a ballot amendment to the state constitution, property taxes in California were rolled back to 1 percent of a property’s 1975 assessed value; annual increases were limited to 2 percent for inflation. Taxes on property sold since 1975 are based on the purchase price.

At issue in the case accepted by High Court, Nordlinger v. Hahn (Case No. 90-1912), is the constitutionality of the requirement that newly purchased property be reassessed based on its purchase price. Lawyers for the plaintiff, Stephanie Nordlinger, argue that the provision violates the 14th Amendment’s guarantee of equal protection of the laws.

Ms. Nordlinger, a Los Angeles lawyer who bought a house in 1988 for $170,000, says she pays about $1,700 a year in property taxes, while neighbors who have owned similar homes since before Proposition 13 went into effect pay only $350 to $400.

Other examples cited in her court papers indicate that some homeowners pay 12 to 17 times more in property taxes than owners of similar homes, due to rising real-estate prices and the benefit Proposition 13 provides to long-time property owners.

Ms. Nordlinger lost her challenge in state superior court and in a state appellate court. The California Supreme Court declined to review the appellate court’s decision that the provision does not violate the equal protection clause of the U.S. Constitution or the right to travel.

According to Mr. Gordon, the school-boards group has not explicitly backed the challenge, because an invalidation of the property-tax system would mean an unpredictable political resolution by state lawmakers.

“For a school district to assume that things would get better [if the provision were overturned] is not a good assumption,” he said.

The immediate effect of the adoption of Proposition 13 was to constrict the budgets of local governmental agencies, which were severely limited in their ability to increase property taxes.

The new system was challenged by a school district in 1978, but was upheld by the state supreme court. Subsequently, the rough equalization of education funding by the state has helped ease some of the budgetary concerns of local educators.

Sales-Tax, Voting-Rights Cases

The High Court also agreed last week to hear a case that could have a major impact on state sales-tax revenues.

In Quill Corporation v. North Dakota (No. 91-194), the Court will consider whether to overturn a 24-year-old precedent that bars state taxes on out-of-state mail-order sales.

North Dakota, with the backing of at least 22 other states, has argued that the Court’s 1967 decision in National Bellas Hess Inc. v. Department of Revenue has been made obsolete by the huge growth in catalogue sales, direct marketing, and other new sales technologies that deprive them of tax revenue. According to papers filed on behalf of state governments, the states lose at least $2.2 billion in taxes annually from mail-order and direct-marketing sales.

In other action, the High Court issued brief orders asking the Justice Department to comment on whether it should accept two cases from Mississippi dealing with the federal Voting Rights Act and changes in school-district boundaries.

In Greenville Public School District v. Western Line Consolidated School District (No. 90-1861), the Court has been asked to consider a dispute between two school districts over a Mississippi law that said district boundaries automatically change when a municipality annexes land served by another district.

The Greenville district argues that the 1986 education-reform law that repealed such automatic extensions was not adequately reviewed by the U.S. Attorney General as required under the Voting Rights Act.

The Mississippi Supreme Court said the Attorney General’s office acted too late when it objected to the change in 1989. The court rejected the Greenville district’s claim to land in the Western Line district.

The 1986 reform law’s repeal of automatic boundary extensions is also at issue in a related case, Dupree v. Moore (No. 90-1977). The case arose when voters in Hattiesburg objected to a city annexation that did not also include a change in school district boundaries. The repeal of the automatic extension constituted a voting change that was not adequately reviewed by the Attorney General, the voters said.

A federal district court ruled in April that the reform law was precleared by federal officials, notwithstanding their later objections.

Cases Turned Down

In other action, the Supreme Court last week:

  • Declined to review two decisions by the U.S. Court of Appeals for the Fourth Circuit that said two Virginia districts did not have to take additional steps to educate deaf students.

In Goodall v. Stafford County School Board (No. 91-163), the High Court let stand the Fourth Circuit’s ruling that the federal Education for All Handicapped Children Act does not require the school district to provide a cued-speech interpreter to a hearing-impaired child attending a private Christian school. In fact, providing a publicly funded educator on the premises of a sectarian school would violate the First Amendment’s ban on government establishment of religion, the appeals court ruled.

In Barnett v. Fairfax County School Board (No. 91-62), the Supreme Court refused to review the Fourth Circuit’s ruling that the district was not required under the Individuals with Disabilities Education Act or Section 504 of the 1973 Rehabilitation Act to provide a cued-speech program at the neighborhood school attended by a hearing-impaired student. The district may continue to require the student to commute to the one county school where the special program is offered, the lower court said.

  • Refused to review a lower court’s dismissal of a civil-rights lawsuit filed against the president of the San Francisco Board of Education and the board itself by a man who had been unsuccessfully sued for libel by the board president after the man criticized board policy at a public meeting. The case was Jungherr v. San Francisco Unified School District (No. 90-1612).
  • Let stand, in Boyd County Board of Education v. United States Fidelity & Guaranty Company (No. 90-1830), the dismissal of a complaint for recovery filed by a Kentucky school board against the bonding company for a building contractor that defaulted.
  • Declined to review a ruling by the Ohio Court of Appeals that a school board was immune from liability under state law for a complaint that a handicapped student was sexually assaulted by a cab driver working for a company under contract with the school district. The case was Jones v. Dayton Board of Education (No. 90-1982).
  • Refused to examine a ruling by the Indiana Supreme Court that said a school board’s decision to lay off a tenured psychometrist with only one professional certificate while keeping non-tenured psychometrists who held other certificates that qualified them for additional jobs did not violate state law or the board’s employment policies. The case was Stewart v. Fort Wayne Com munity Schools (No. 91-16).

A version of this article appeared in the October 16, 1991 edition of Education Week as Supreme Court Agrees To Hear Challenge to Calif.'s Proposition 13


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