Steven Greenhut Sr. editorial writer and columnist The Orange County Register [email protected]

As a longtime observer of government, I've come to realize that no matter how much public money one gives to any government agency or group of government workers, it will absolutely, positively not be enough. The unions representing the agency's workers will always cry poor-mouth, always find ways to shake down the taxpayer for more money.

California's public school system consumes more than 40 percent of the budget, guaranteed by constitutional decree, and the governor's budget would increase educationspending by more than 7 percent, yet we've all witnessed the California Teachers Association and its unceasing anti-Arnold rallies and overheated "you're starving the kids" rhetoric.

Under Gov. Gray Davis, the California Correctional Peace Officers Association - the prison guards - received a 37 percent pay raise, and these workers receive some of the most generous pension benefits in the nation. Yet they too are joining the fray, pleading poverty and whining.

Nor is either group stopping with their anti-Arnold rhetoric. They are also promoting a ballot initiative, now being circulated for the June 2006 ballot or later, that would obliterate Proposition 13 property-tax protections and earmark the new revenue for - you guessed it - the programs that they depend upon for their livelihoods.

Called the California Tax Fairness Act, this initiative would impose on California what is called "split rolls" for taxing property. There would be two separate tax rates - one for homeowners, who would retain Prop. 13 protections, and another for commercial property owners (businesses, stores, industrial land owners, etc.), who would pay taxes based on the latest assessed value and have their property reassessed every year. On the surface, it appears to exclude apartment buildings, but the Apartment Owners Association of Orange County believes that the language is so imprecise that it could possibly include multifamily properties. "Was it written poorly by accident?" asked Matt Petteruto, director of public affairs. "Or was it written poorly to leave future loopholes to broaden what can be reassessed and what can't be?"

Currently, all property, residential and commercial, is protected by the Prop. 13, the 1978 ballot initiative that limits tax increases to 1 percent of the value of the property with no more than a 2 percent increase in valuations each year. The result of its passage was to protect Californians, especially the elderly, from being priced out of their homes as spikes in value increased tax payments.

Supporters argue that businesses don't pay their "fair share" of taxes. To gain widespread public support, drafters of the initiative earmarked the potential windfall in new tax revenues, to be divided among teachers, law enforcement, firefighters, transportation and senior citizens.

It has all the makings of mom and apple pie, but in reality, if this initiative passes the whole state will feel the pain as businesses flee eastward. It will knock the first rung off the economic ladder, making small-business ownership harder to achieve.

This state has a notoriously hostile climate for those who invest, create jobs and operate rental units that house so many California residents. The majority Democrats in the Legislaturethink of business as barely a step above evil, and they always are looking to increase income taxes and regulations on them. Under Prop. 13, however, the state's businesses have one of their few competitive advantages with other states. Longtime businesses have relatively low property-tax rates and newer businesses have tax predictability. They know what the tax bill will be every year.

"There are job killers and business killers," said Rex Hime, president of the California Business Properties Association in Sacramento and a chief foe of the initiative. "But this one is an economy killer. It's so draconian. Proponents estimate that it will bring in $3.5 billion each year, but they can't even estimate the first-year proceeds because millions of commercial properties will be reassessed to 2006 levels. Small family businesses. They'll lose it. They will be wiped out."

It's nearly impossible to unravel the cascading impact of split-roll property taxes. But it's clear it would be a massive tax increase on every job-producing sector of the economy. Vacant land would be affected, which would mean that many projects would never get built. Cities would lose revenue. Rents could go up significantly. Small businesses would go bankrupt or flee. Prices for products would go up in this already-pricey state. And split rolls might be just the thing to bust our inflated real estate bubble, meaning the loss of equity for everyone, homeowners included.

No one knows for sure. What I do know is two public-sector unions are willing to push California to the economic brink for selfish purposes.

Which brings me to an initiative that will almost certainly be on the November ballot: Paycheck Protection. This would require unions to get consent from their members before simply hitting them with higher dues to pay for these kamikaze political campaigns.

Vote for that one, and maybe we'll put an end to split rolls and other economy-sapping, freedom-destroying union initiatives.