|Source: NBC News- NBC News's Don Harris-|
The mid and late 1970s was a very rough time for America economically and 1978 is a perfect example of that and with California being the largest state in the union, perhaps Californians felt the rough economy with the high interest rates, inflation, energy shortages, high employment perhaps California was hurt the worst by this economic period. The country had already started moving Right politically starting in the mid 1960s, and by the late 70s the country was already thinking, "maybe we need a different economic course and new political leadership in charge".
Property taxes were becoming unpopular in California and I'm sure in other states. The property tax is about as regressive, not progressive of a tax you can impose on someone, especially if they are struggling to just pay their bills and perhaps are looking for work. And when the economy is down like it was in 78 and you are struggling, you feel the pinch of the property tax a hell of a lot more than someone who's home is fully paid for and runs or owns a successful business.
So when California businessman Howard Jarvis comes around with a plan to cut property taxes in California by putting it on a state referendum because he knows that State Legislature won't approve of it being controlled by Progressive Democrats, both the Assembly and Senate and has the money and backers to fund the referendum, people take notice even in a state like California which is overwhelmingly Democratic politically.
NBC News: NBC Nightly News- Howard Jarvis, Jerry Brown & The 1978 Elections