I returned this afternoon from a 24-hour trip to San Diego, where my company, Headlight.com, held its official launch event. We sponsored the annual NDA conference, run by Red Herring, and formally announced http://www.headlight.com, the leading source of online training for small and medium-sized businesses (yup, that's our official tagline). Here's where I give a pitch for the company: for all your training needs -- from Microsoft Word to how to write a business plan -- Headlight.com is your one-stop solution. Our official press release is here: http://www.headlight.com/about/press_releases/release_110199.

The event was a blast, and I'll never forget it. It's not every day that one gets to be a part of the national unveiling of a new company. And seeing a story on the front page of today's San Francisco Chronicle business section just added to the excitement. While reading the story, I couldn't help but crack a wide smile of pride, knowing I'm part of the team that has made the dream of Headlight.com become a reality.

-Gabe

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But there is increasing talk in the Legislature to rewrite or replace Proposition 13, and it appears there will be a serious attempt to do so next year. Thus far, it's just talk: Politicians who publicly question the wisdom of Proposition 13 do so at their own peril. Even after more than two decades, Proposition 13 enjoys decisive support, according to a recent Field Poll.

Proposition 13, the brainchild of anti-tax activists Howard Jarvis and Paul Gann, slashed property taxes by 57 percent, rolled back assessed values to 1975 levels and sharply limited new increases. Equally important, the initiative required local entities to obtain a two-thirds majority to raise taxes and sell bonds -- a provision that dramatically cut into the ability of schools and others to obtain money.

At the time the initiative passed, the state had a multibillion-dollar surplus -- Jarvis and Gann dubbed it the "obscene surplus" -- and property tax bills were skyrocketing. Homeowners, fed up with high taxes, voted for Proposition 13 in droves.

But the quality of public services, especially the schools, deteriorated over time, the Legislature evolved into the fiscal manager of local governments and the intricate schemes the Legislature and succeeding governors crafted to replace the money were tortured and of dubious legality. Indeed, a Sonoma County court recently declared the state's recession-spawned 1992 attempt to shift some $3 billion in county revenues to the schools was unconstitutional, a decision that, if ultimately upheld on appeal, could cost the state billions in principal and penalties.

Moreover, as the reliance on property taxes was curtailed, counties began using the sales tax as a fundamental source of revenue. That meant that retail outlets -- strip malls are a perfect example -- began being approved with profound regularity, a trend that critics contend damaged the quality of life because, unlike manufacturers, the retail outlets provide few high-paying jobs.

One proponent of changing Proposition 13 is Sen. Steve Peace, a San Diego-area Democrat and a bright, voluble iconoclast, who has held hearings on revamping the fiscal relationship between the state and its counties. Peace has not said what his plan ultimately will look like, but whatever he comes up with is all but certain to send shock waves through the political community.

The successors to Gann and Jarvis already are girding for a major political fight, and have vowed to block the demise of Proposition 13 at all costs.

The ultimate decision on Proposition 13 will be made not by the Legislature, but by Gov. Gray Davis, a moderate well known for his aversion to tough, potentially unpopular decisions. Any decision the Legislature makes will have to go to Davis for approval or rejection, unless an independent move is made to place a Proposition 13 repeal on the state ballot. Clearly, Davis will be in a difficult political position if he is forced to decide the fate of Proposition 13.

Thus far, Davis hasn't given a hint of how he feels about the issue. But the time is coming when he will have to take a stand. What he does on this single issue may be the most significant act of his governorship.

A showdown is looming.

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