Howard Jarvis and the Emerging Alliance Between Homeowners and Community Businesses

Howard Jarvis in 1971 seemed to be a radical, antiestablishment champion of the homeowner. He attacked tax-exempt foundations and trusts; he proposed taxes on oil corporations and insurance company headquarters; he was the defender of the average homeowner unable to take advantage of tax loopholes. Jarvis claimed that "there are 18,000 charitable trusts in California which are tax exempt and there are, at last count, some 66,000 tax-exempt organizations, including foundations. Many of these own a great deal of land," amounting to some $16 billion, which should "begin to pay a fair share of taxes. . . . [T]he property owner without enough influence pays most of the property taxes." In 1971 Jarvis authored an initiative that would have levied taxes on all previously exempt property. Any exemptions would need approval by a twothirds vote of each chamber of the state legislature.^[47]

Although Jarvis grew famous because of this populist political persona, Jarvis had spent his working career as a business owner and his political life as a conservative Republican. This helped him to obtain support from community business leaders, leading to the triumph of Proposition 13.

Jarvis's probusiness views stemmed from his colorful career as an entrepreneur. In 1925 he borrowed money to buy a small-town newspaper in Utah. In five years, Jarvis owned a chain of eleven papers with a combined circulation of 30,000 and was making around $35,000 a year. Jarvis was proud to be a probusiness conservative. Since the 1920s he had been active in the right wing of the Republican party. He traveled on Herbert Hoover's campaign train in 1932 and stood on the platform with a pillow to block the rotten eggs and tomatoes that the Depressionstruck partisans hurled at the incumbent president.

Despite the fact that Jarvis received government contracts during World War II, he concluded that the government was the adversary of business. It was the government that requisitioned his stock of latex during World War II, putting an end to his typewriter pad company even though the latex was never used later.

After the war somebody from the War Production Board gave me a tip that if I wanted to see my latex, he could tell me where it was. Just out of curiosity, I went. The latex was stored in a warehouse on Santa Fe Avenue near downtown Los Angeles. I knew it was mine because we were the only place in Los Angeles that used that much latex. Latex is a liquid. It came in barrels and looks like milk. But after sitting in that warehouse for a few years, my latex was just like a big ball of mush. All the water had evaporated out of it. And it took me about three or four years before the Government paid for it.^[48]

During the Korean War, the government set a fixed retail price for fiatirons which didn't allow Jarvis to make enough profit; Jarvis avoided the price controls by shipping his irons to Mexico and then back again. Then, government controls made nickel chromium wire unavailable for civilian uses and forced Jarvis's gas heater company to close.

Jarvis's wartime business experience convinced him of the evils of government regulation; Jarvis's business partner during World War II, an engineer named James A. McDonald, taught him a lesson about taxes. Jarvis recounts:

Then one day the IRS called me and said, "Mr. Jarvis, Mr. McDonald is going to be in our office tomorrow at ten o'clock to discuss his tax situation, and we thought you might want to be there." I hadn't seen Mac for a few years, so I decided to go.

At 10:00 we were all there, these Internal Revenue agents in their pinstripe suits, and me. And no Mac. A few minutes late, in breezes Mac, all 4'9" of him. There were some preliminaries, and then one of the agents said, "Mr. McDonald, you owe $42,366.79, and we'd like to know what you intend to do about it."

Mac said, "I'm not going to do anything about it. . . . I'll make it clear

for you. All you guys can go fly a kite, because I'm not going to do a damned thing about these taxes you say I owe. . . . "

And he got up and walked out.

That was the first time I saw a real tax revolt.^[49]

While he was living in California, Jarvis served as Republican party precinct chairman and president of the Republican Assembly in Los Angeles County. Jarvis happened to be serving on a committee in 1946 which ran newspaper ads in the hope of recruiting candidates to run on the Republican ticket. For the congressional race in Whittier, the ad was answered by a young sailor, Richard Nixon. In the 1960 presidential election, Jarvis was a campaign director for Nixon in eleven western states, as well as director of the campaigns of state legislators in southern California. Jarvis ran in a primary election "as a conservative" in 1962, hoping to unseat Republican Senator Thomas Kuchel, who Jarvis thought was cooperating too much with the Democrats. Meanwhile, he had started several compauies to manufacture car coolers, garbage disposers, and aircraft parts. At their peak, Jarvis's companies employed several thousand people; when he sold them to retire, he netted about $750,000.

With his background in business and conservative politics, Jarvis's inclination when he became active in the tax revolt in the 1960s was to recruit small- and medium-sized businesses. By 1971 Jarvis had gained some support from apartment owners. Charles Reynolds, the tax chairman for the Orange County Apartment House Association, confirmed that his group had gathered signatures for a Jarvis initiative in 1971. This initiative was also endorsed by the California Apartment House Owners Association.

In 1972, Jarvis became the executive director of the Apartment House Association of Los Angeles County. When he took over the association, it had 1,100 members; when he left in 1979, membership had risen to 5,000 owners, accounting for more than 50,000 units. As executive director, Jarvis engaged in much political activity, lobbying the state legislature against rent control. He fought against a Los Angeles City Council bill requiring the demolition of brick apartment buildings due to earthquake danger and against another bill that would have instituted garbage collection fees for large apartment buildings. During one of his drives to place a tax reduction initiative on the ballot, one newspaper announced that petitions were available at 551 South Oxford Avenue in Los Angeles, the headquarters of the Apartment Association.^[50]

Jarvis also believed that property tax cuts would produce a building boom and spur business growth throughout California. Property tax cuts would be good for apartment owners and business in general. "[W]e wanted to give a tax break to business as well as to everybody else. The people in California who hire other people are in business. We were losing

dozens of companies and thousands of jobs every year because business taxes were too high. And the property tax was one main reason."^[51]

Jarvis's work at the apartment association, combined with his position as state chair of the United Organizations of Taxpayers, placed him in a unique position to bring homeowners and community business leaders together. In 1976, one more wave of taxpayer protest gave Jarvis a unique opportunity to make that coalition between homeowners and business into a political force that could not be ignored. Jarvis himself had an appeal that captivated audiences of middle-income homeowners. In the town of Glendale (relative affluence index 1.07), Jarvis could emphasize the popular side of the tax revolt and raise the theme of unresponsive government power: "We are getting no relief from our legislators in Sacramento. . . . We want one million signatures on petitions by Christmas to shake the teeth of the politicians in Sacramento." One way that citizens could regain power over government was "not to give them the money in the first place." Jarvis urged homeowners to refuse to pay their property tax bills. "[T]his is the only action property owners can take in 1976 to protect themselves against the power of government to continue to levy extortionate property taxes." To this audience, Jarvis emphasized the apparently egalitarian features of his proposal. "There are no loopholes, no corruption. Everyone pays his share, 1 per cent." The initiative would restore taxes on much previously exempt property.^[52]

But the tax revolt would triumph not because of the support from Glendale or Alhambra or Covina, but because a very different type of community slowly began to stir.