A new analysis of the enduring impact of Proposition 13, the 1978 initiative that voters passed as a backlash against rising property taxes, concluded it has contributed to a widening wealth gap, a severe housing shortage and, for decades, inadequate funding for public schools. As the report noted, in 2019-20, California’s per-student funding, unadjusted for regional costs, reached the national average. And the Legislature is poised to pass a state budget in which per-student funding will likely well exceed the national average — with funding for low-income districts that receive extra money under the state’s Local Control Funding Formula even higher. At least for 2022-23. But the flip side of tax progressivity is volatility; a state tax structure dependent on revenue from capital gains follows stock market gyrations. During the Great Recession, state funding for schools fell $7 billion or about $1,200 per student. “It’s a reminder that the boom and bust cycle is real. Property taxes are a piece of the puzzle to smooth out volatility,” said Carrie Hahnel, senior director of policy and strategy with the Opportunity Institute. If a recession were to happen this year, as some forecasters predict, school districts are better poised than a decade ago to weather it, but the impact of a sizable recession would still be jarring. Revenue from property taxes has been more stable and predictable — and still could be, depending on how a Prop. 13 reform were structured. “I’ve always said school funding should be a three-legged stool, with local, federal and state participation for stable and growing funding,” said Kirst. “We need to get local districts back in a way that transcends parcel taxes and developers’ fees.”