WHAT IS PROP 13?
In 1978, California voters approved the People’s Initiative to Limit Property Taxation, or Proposition 13. Proposition 13 was the outcome of a revolt of California property owners against the subjective, roller-coaster rides that they had to deal with each year when their property values were assessed.
Stability for Property Owners
Tax rates will be initially set at 1% of market value and any annual increase will be capped at 2% to the lessor amount of market value or an inflation factor except when there is a change of ownership or new construction. No more arbitrary subjective evaluations that a County Assessor might come up with each year. This helps seniors, new homeowners and everyone in between.
Stability for Local Government
Prop 13 has acted as what CalTax calls a “circuit breaker” to stop the volatility of market values from affecting the flow of property tax revenues to cities to fund vital local services.
Voter Threshold for Increasing Taxes
Tax increases now require a two-thirds vote of the people to raise local taxes in California.
Legislature Threshold for Increasing Taxes
There is also a two-thirds vote requirement of the Legislature to raise California State taxes.
THREATS TO PROP 13
Split-roll would tax properties differently depending on their use.
Opponents of Prop 13 want to convince homeowners that they are being unfairly taxed and that commercial property owners are taking advantage of the system.
This is not true.
Studies show that the assessed value of business properties has actually grown at a higher rate than that of homeowners. Business properties pay the largest share of property tax under Prop 13.
A split roll is BAD for California's economy. It would increase the cost to do business in a state already ranked as one of the worst in the nation. Lastly, split roll would make it easy for Sacramento to come after homeowners.
Lowering Voter Threshold to Raise Taxes
The California State Legislature seems intent on eliminating the two-thirds vote requirement for additional add-on parcel taxes. Multiple bills have been, and will continue to be introduced to lower the voter threshold for school district per-parcel property taxes, transportation special taxes, library facility taxes, economic development taxes and taxes for many other purposes.
Lowering the voter threshold would, as the Howard Jarvis Taxpayers Association states, gut one of the most important provisions of Proposition 13.