KTLA News: "Protest against Proposition 13" (1978)

[Reporter Mike Botula] Foes and supporters of the Jarvis Amendment are still slugging it out over the hottest issue in this election campaign. At Rancho Los Amigos Hospital staff people, volunteers and patients were demonstrating in an effort to show which vital services would be cut back if Proposition 13 is implemented. The people working with handicapped children say that the youngsters will be without daycare centers, adequate hospital facilities and emergency services. [Doctor Perry] If at the present time the current plan calls for closing of this hospital and should that happen there are literally thousands of handicapped children who are going to go without care. For the past three decades or more this hospital has gained a tremendous amount of expertise in the care of this children and all of this is going to be either wasted or dispersed or not available to those children. [Botula] Downtown, Howard Jarvis leveled another blast at his opposition by unveiling what he claims is a major flaw in the Behr measure, Proposition 8. Jarvis says if Proposition 8 beats 13 then California property taxes will not be deductible as they are now. on federal income tax returns. Jarvis says the IRS agrees with his interpretation but he won't say just who at the Internal Revenue Service made the evaluation. [Howard Jarvis] Someone in IRS told me this and they quoted me and they told me where to go to find it. I went and found...we went and found it. I had two firms of attorneys check it. The man at IRS told me that this was the law, this is the way they would interpret it and I, and he says, "Now don't take my word if you don't want to. Go have it checked out." So I did. [Reporter] Who is this at IRS? [Jarvis] I can't tell you. [Reporter] Well, why can't you tell us? [Jarvis] Because he wouldn't tell me. [Botula] With less than a week to go before the election "pro-13" and "anti-13" forces continue to blast away at each other while government officials try to figure out a way to implement Proposition 13, if it passes. Mike Botula...Channel 5 News Watch...reporting. [Protesters chanting] "Yes on 8, No on 13"..."Yes on 8, No on 13"... [Hospital room noise]. [Silence]. [Woman talking] If Proposition 13 passes the impact on the children of this community will be tragic. Dr. Perry? [Perry] Yes...uh... the quality and the quantity of care that is currently being delivered by this hospital is, at this time, totally unknown and unplanned for. [Reporter] What departments will be left? [Perry] That I can't speak to at this moment... uh... to the best of my knowledge the care of the children will not be among those provided in the future. [Silence]. [Protesters chanting] "Yes on 8, No on 13"..."Yes on 8, No on 13"... [Silence]. [Botula] What's the difference then in what Proposition 13 would do regard this as... as against proposition... [Jarvis] Proposition 13 has everybody taxed on the "like rate." [Reporter] Are you sure as the Governor is and other people that 13 is gonna pass? [Jarvis] Oh, I'm more sure, yes. Oh, yes. We're gonna to have a very big vote. I think it's going to be 65-35. [Reporter] And what do you think about the chaos you, they say you, are causing? [Jarvis] Well, I think, the only chaos there will be that the politicians will have to go back to work. [Reporter] Mr. Jarvis let's, let's go back over this? [Jarvis] Alright. [Reporter] Property taxes if 8 passes or is this... [Jarvis] Yes. [Reporter] Now wait a minute..or is this your interpretation of what you think by IRS will do? [Jarvis] No. What I'm saying is that the law seems to me very clear. That if you don't have a "like rate", so that all properties on a "like rate"... individual residents, owners may not deduct the property tax from the federal income tax. There is another section in the law that allows business to do it. It's 164...because that's a business expense. But it's my advice from the Internal Revenue that if this... taxes are different as to one class of business on, on property tax. On residences they may not be deducted as a deduction from federal income tax-the federal income tax. [Reporter] Let's be precise now, you say it's your advice from Internal Revenue. Now someone in IRS said that to you? [Jarvis] Yes. [Reporter]...or are you just reading this and interpreting it that way? [Jarvis] I can't use my name. [Reporter] Then it's some anonymous person who claims to be at IRS... [Jarvis]...at all. I, I have... I have solid information he works... at a high rating in IRS. And the reason for that Saul, as you know... ...was yes... [Jarvis] generally. Yes, I think, the answer is yes. You got to look a little history, they pass panic... ...after sitting there for 21 years and say, "We can't move fast," they passed the Behr bill in 24 days. They've already passed 30,000 words of ammendment to it, called the "Maury (?) Bill," number 1840. [Reporter] Okay but this is not, still not an official ruling. [Jarvis] Proposition 8 changes the system to an "unlike rate" and thought ought to be clear to anybody. It's clear to me, it's clear to good lawyers, it's clear to the IRS and I don't see what...I can't understand why there's any question about it? Now the fact...now I don't know whether anybody is, whether this has ever been applied or not... by anybody. I don't know of any state where has a split roll on property taxes. I don't know of any state. There may be that I don't know about. But even so that even if it hadn't been applied... that's irrelevant. That's irrelevant in this issue. This is the law. [Reporter] But doesn't it really mean when it says... [Silence]. [Jarvis]...that's exactly right and there's not a... [Reporter] Is that what you are trying to do... [Jarvis] It's not a cheap shot. I'm trying to educate the news media who have been using cheap shots in this whole campaign and especially Channel 2. And I just want to let them know who the hell they are. Okay. [Jarvis] See...you see it's all right if you guys use cheap shots at me and then to accuse me of a cheap shot at you. You see. Now, this is not my shot. This is Internal Revenue. If you guys don't like it, you call 'em and ask 'em and they'll tell ya. They'll tell ya and they'll read the law to you just like I did. And if you don't want to believe them, that's your problem, not mine. [Botula] Did your IRS man give you an interpretation though? I mean... what we're trying to establish is, did the IRS... [Jarvis] Yes, he did. Yes, he did. [Botula] And he read the law to you? [Jarvis] That's right. [Botula] This is what it means. [Jarvis] And he says it's a...says, "I want to let you know what the law is because you obviously don't know" and I didn't know. I didn't know what the law was, I never heard of it before. [Botula] Well, what will that mean in terms of dollars to the taxpayer? [Jarvis] Well, I'll tell you what it'll mean. It'll mean that if Proposition 8 pass probably 3 billion dollars of residential property tax will not be deductible from... from the Internal Revenue. [Reporter] Alright but isn't it possible if this is an employee of IRS who happens to favor 13 and oppose 8... [Jarvis] Well, yes, that makes an impact on me because in reality Saul... the black and the brown are the biggest beneficiaries of 13. Their the biggest beneficiaries of 13 because, unfortunately, they make less money than other people and it's harder for them to pay high rents and it's harder for them to pay, pay for houses and to pay taxes and uh... I, I believe that they are gonna be, from this standpoint, they're gonna be the biggest beneficiaries. Now if the County is going to do...take a position like that it would be, I would be quite unhappy about it myself. Uh...